§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]
9.48 pm§ Mr. Robert Jackson (Wantage)It is agreeable to have the penultimate word before the summer recess begins in this Session of Parliament.
A humorous story was current in my youth at Oxford about the attempts of his colleagues some time in the late 1950s to persuade the last of Oxford's professors with life tenure to retire from his chair. That was Canon Claude Jenkins, Professor of Ecclesiastical History. He was a self-confident nonagenarian, well known for his donnish wit. A great dinner was organised in his honour, at which lavish valedictory encomia were pronounced. But when the great man rose to his feet, he dashed the hopes of his friends with the opening phrase of his speech. He said he was
of a modest, but not of a retiring disposition".I have sought an Adjournment debate because I fear that if the Government and Parliament are not careful, scenes of that kind, entertaining but also a bit disturbing, will be a feature not just of the past but of the future.The Government are consulting on the implementation of a directive adopted by the European Union in November 2000
establishing a general framework for equal treatment in employment and occupation".That directive requires national legislation in each of the member states to give effect to its objectives, which include the imposition of legal penalties against discrimination in employment on a number of grounds, including age. The Government have said that they intend to proceed by way of regulations and guidance to give effect to that portion of the directive at some point before the end of 2006.As I hope to show, the directive has potentially profound and wide-ramifying implications for an important sector of our national life—our universities. It also has serious implications in many other areas such as the judiciary, the civil service, the military, and the medical profession. In these circumstances, the Government should think again about the way in which they propose to handle this legislation.
There is a serious case, which I shall draw to the attention of my right hon. and hon. Friends on the Opposition Front Bench, for its being treated as primary legislation. Certainly, it should be considered by the relevant Select Committees, and I shall write in that sense to their Chairmen. If it is to be treated as secondary legislation, to attempt to pass it by way of the negative resolution procedure would be an abuse of Parliament. Assurances from the Minister on those points would be very welcome at this stage.
My purpose in seeking this Adjournment debate is to draw the attention of the Minister for Lifelong Learning and Higher Education, at this very early stage to the serious implications that the regulations and guidance will have for the universities of the United Kingdom. My standpoint is not one of outright opposition to the abolition of mandatory retirement ages in academe, or to other age-based mechanisms that have been evolved in 1073 our universities to try to manage the process of academic succession. These are arrangements that it may be right and proper to review, but I want the Minister and her officials in the Department for Education and Skills to take the seriousness of this issue on board;, to reflect on the problems which may arise; to listen to the universities, and to ensure that their interests are properly taken into account alongside the myriad of other interests that will be affected by this far-reaching legislation, which will of course be handled by another Department with its own agenda.
My anecdote about Canon Claude Jenkins should remind us that this question has a long history. Mandatory retirement ages in the universities were a 20th-century phenomenon; Canon Claude's leaving dinner in the late 1950s was necessary because his appointment to his chair preceded their introduction.
At the beginning of this discussion, I want to make a fundamental point. The introduction of mandatory retirement was, I believe, closely bound up with the professionalisation of university life. In the early 20th century, professionalism and corporatism—a word that is somewhat discredited nowadays—went hand in hand. Professionals were understood, by themselves and by wider society, as having a shared responsibility for the future of their disciplines, and for the institutions in which they worked. They accepted that those wider collective or corporate interests might give rise to constraints on their personal interests. For example, they could be expected to retire at a time not of their choosing, in order to assist the timely renewal of the personnel of their profession.
Mandatory retirement was made possible by the introduction early in the 20th century of pensions for retired academics. In the United States, the first academic pension schemes were a private initiative. The great philanthropist Andrew Carnegie, who was responsible for this initiative, explained his purpose in these important words. In the absence of a mandatory retirement age,
able men hesitate to adopt teaching as a profession and many old professors whose places should be occupied by younger men cannot be retired".Thus there is at stake in this debate not only the question of whether a mandatory retirement age and other age-related discriminations are still necessary for the proper management of academic succession, but the more fundamental question of the future of the corporate professional ethos in university life.Over the past couple of decades, the corporatism of professional life in general—in the universities and elsewhere—has been challenged from many different directions. Thatcherism might be said to have been one such challenge. One other is the spread and intensification of the philosophy of individual human rights. This is the ideology which underlies the European directive whose effects we are considering tonight, which is aimed at protecting the right of individuals not to be discriminated against, inter alia, on the ground of age.
Let me say in passing that I believe that this directive ought to have raised questions of subsidiarity which the Government should have pressed harder in the Council of Ministers. But having made this point, I want to stress that the issue here is not essentially one of European intrusiveness. Legislation to protect the right of 1074 individuals not to be discriminated against on the ground of age is not a supposedly alien "continental" phenomenon. It originates in our Anglo-Saxon culture of fundamental rights. Germany and France have mandatory retirement policies which, like ours, will have to be modified as a result of this directive.
The true origin of this directive is to be found in the United States, in the Age Discrimination in Employment Act 1986. Similar legislation followed in Canada, and in Australia and New Zealand in the late 1990s. I want to urge the Minister to ensure that the experience of these other English-speaking countries is carefully evaluated as the Government proceed to implement this directive. In 1990, the Canadian Supreme Court found that it was constitutional in Canada to retain mandatory retirement for the university faculty. The arguments there repay closer study.
Above all, the Minister should reflect on the experience of the United States. There, a temporary exemption from the provisions of the 1986 anti-discrimination law was granted to post-secondary institutions so that a mandatory retirement age, raised to 70, was permitted. This exemption was reviewed by Congress in the early 1990s, and the exemption was dropped in 1994.
I have a copy of an important study published in November 2001 by Ashenfelter and Card—I would be happy to give it to the Minister—addressing the question,
Did the Elimination of Mandatory Retirement affect Faculty Retirement Flow?Among other findings, this study concluded that there has been a marked increase in the fraction of faculty who continue working into their seventies.In the mandatory era, the average retirement rate of 70-year-olds was about 75 per cent, while the rate for 71-year-olds was about 60 per cent. Immediately after the prohibition of mandatory retirement contracts both rates fell to under 30 per cent".The Minister should look at this study, and others. They will not, of course, tell us precisely how legislation of this kind might impact upon the particular circumstances of British universities. But she might like to reflect on the implications of this sentence in the study I have been quoting:consistent with simple models of retirement incentives … people with higher salaries or lower pension wealth are less likely to retire at any given age.As it developed in the 20th century, the regime of mandatory retirement ages was associated with the development of salary scales that rewarded older workers to help them prepare for retirement. When there was no mandatory retirement, academic pay was typically a fixed value emolument, or an entitlement to a variable dividend. I do not suppose that the universities or their staff would want to go back to those arrangements, but the fact is that under our current arrangements—developed as a consequence of mandatory retirement—older staff are more expensive and, if the American experience applies, will accordingly have a greater financial disincentive to retire if they have a free choice. This is a general point, applicable to both the UK and the US.
More particularly, in the UK, the academic profession is less well paid and endowed with less generous pension schemes than in the US. The disincentive here to retire will therefore be greater, and the incentives to carry on, in terms of pension access, will be less.
1075 I want briefly now to draw attention to the possible consequences for the Government, some way into the future, if this legislation and the current structure of economic incentives result in many more academics staying in post for rather longer. In my own time as Minister for Higher Education in the late 1980s I saw at close hand the expensive and painful consequences of trying to put right imbalances in the age structure of university employment. The financial rigours of the early 1980s impacted on universities which had recruited a large cohort of young staff in the early 1960s. Those were men and women who were growing older together and also becoming more and more expensive to employ. The result was a series of early retirement programmes, funded by the state. Those were clumsy in their application and perverse in their effects—
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ainger.]
Mr. JacksonAs I was saying, the best staff, those most capable of finding employment abroad, were often the ones who signed on for the packages. The programmes—and I stress this to the Minister, because her colleagues will be interested—were also very expensive for the Treasury. New blood had to be paid for, and it was not cheap. If the Government proceed with legislation that abolishes mandatory retirement ages in universities, I foresee a requirement for further and repeated new-blood schemes.
I hope that the Government will bear those points in mind as they reflect on the legislation that they are committed to bringing forward. The directive provides that discrimination may be acceptable, when it is
objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary".It also makes reference to justification on the basis of "legitimate employment policy" and in the light oflabour market and vocational training objectives".The Government may be tempted to leave the interpretation of those exemptions to the courts.I do not expect that the Minister tonight will be able to express a view on that point, but I want to counsel the Government against yielding to any such temptation. If the Government do not give legislative guidance to employers on those points—especially, I might add, to university employers—they will certainly be advised to minimise the risk of legal challenge, and maximise the changes proposed by the directive. Important socio-economic and political judgments are involved here, and it would be an abuse not only of Parliament but of the courts to remit those questions to unelected judges.
I therefore put it to the Minister, first, that it is for the Government and Parliament to determine whether mandatory retirement can have a "legitimate aim" in universities, which is "objectively justified" on grounds of "legitimate employment policy"; and, secondly, that it is for the Government and Parliament to consider whether that instrument, which has helped to realise that aim through most of the 20th century, remains "appropriate and necessary".
People today—especially middle-class people—are living longer and more productive lives. Quite apart from the application of ideologies of individual human rights, 1076 that is bound to present a challenge to the institution of mandatory retirement in every walk of life. We do not have mandatory retirement for Members of Parliament of course, but it may be an issue with our electorate.
I want to make just two final points before sitting down. Both of them have to do with the nature of intellectual work—the teaching and the research that are the business of universities. The first is that there is no reason why a compulsorily retired academic with an adequate pension and appropriate access to the necessary facilities should not continue to research and to write, and even to teach. The life of the mind does not have to be lived in and through a university job. A gentle separation from university employment does not entail a separation from one's discipline. The second and concluding point is that, more than in most walks of life, the work of universities requires that the wisdom and experience which often come with age should not be allowed to crowd out the innovativeness and flexibility of mind which is generally the prerogative of youth. Socrates needed his young companions, and let us not forget that one of those young companions was Plato.
§ 10.4 pm
§ The Minister for Lifelong Learning and Higher Education (Margaret Hodge)I congratulate the hon. Member for Wantage (Mr. Jackson) on giving the penultimate speech in the final debate before the recess, and it falls to me to respond to it. Both the hon. Gentleman and I—and perhaps you, too, Mr. Speaker—have a little bit of self-interest in the issue of age discrimination, in that we are of an age when we might suddenly start facing discrimination everywhere, probably, except in the House. However, I like to think that, as someone said to me when I reached my 50th year, the 40s are the old age of youth and the 50s are the youth of old age, which means that we have a long way to go.
Unfair discrimination is intolerable, as I hope the hon. Gentleman agrees. We need to tackle the unthinking prejudice that blights lives and is a cost to the economy. Older people form a major and growing section of the population, and our skills, talents and contributions needed if we are to create a successful society and economy. That applies as much to universities and other institutions of higher education as to manufacturers of widgets.
Although it is fair to say that the over-50s suffer the most from age discrimination, it is not the exclusive province of older people; younger people can also experience ageist practices. We have all heard of whiz kids doing well in the City, but we have also heard of people who cannot get jobs in IT at 30 because they are over the hill. Talented, qualified and ambitious young people are discriminated against in the labour market because they are deemed to be too young and too inexperienced. Thus age discrimination can hit the old and the young.
Employers who discriminate on the grounds of age not only miss out on the skills and experience of a diverse work force, but harm their bottom line. Government estimates of the annual cost to the economy range from £16 billion in the Cabinet Office report, "Winning the Generation Game", to £31 billion in a study by the Employers Forum on Age, "Ageism: Too costly to ignore".
1077 I hope that the hon. Gentleman will agree that ageism in the workplace is wrong. Fairness at work and productivity go hand in hand and the best employers already know that they need to use the skills of all sections of their work force, irrespective of age. Universities are not in a special bracket that puts them beyond the reach of good practice.
Too often in the past, older workers have been written off, even though they have much to offer. About 70 per cent. of people aged 50 or over are in employment, but the remaining 30 per cent.—which is a lot—find that getting and retaining a job can still be a serious problem.
The Government are committed to introducing legislation that will outlaw discrimination. In November 2000, the European Union Council of Ministers, together with the Government, adopted the employment equality directive. That will require all 15 EU member states to introduce legislation prohibiting direct and indirect discrimination at work on the grounds of age, sexual orientation, religion, belief and disability.
We welcomed that employment directive from the outset, partly because it reflected much of our legislation, and because we thought that it was an important step towards ensuring equal opportunities for further sections of our communities, whether in this country or elsewhere in the European Union. However, as the hon. Gentleman pointed out, legislating against age discrimination is not simple. There are many complex and sensitive issues, which we need to address and resolve so that the eventual legislation is practical and helpful to both employers and employees.
The directive recognises that differences of treatment on grounds of age can sometimes be justified. For example, it may sometimes be necessary to make special provisions for younger or older workers to protect their safety and welfare. Retirement age is another possible area of justification.
The challenge that we face on implementing that directive is to identify which types of differences or treatment are acceptable, and which are not. That obviously requires very sensitive consideration in the light of the responses that we are receiving to our consultation.
We in the United Kingdom have a fixed age for eligibility to the state pension, but that does not mean that we have a national mandatory retirement age. However, many sectors have established their own individual mandatory retirement ages, typically 60 or 65, but there are variations.
A mandatory retirement age is an example of direct discrimination, which is prohibited under the directive. Article 6 of the directive, however, allows member states to implement legislation to provide exceptions to the general principle of non-discrimination on grounds of age if they are justified by reference, as the hon. Gentleman said, to objective, reasonable and legitimate aims.
As the hon. Gentleman may know, we have already consulted on issues surrounding that difficult directive. We sought preliminary views on the retirement age, and the consultation was completed at the end of March. Analysis of some of the key responses to the consultation, which was called "Towards Equality and Diversity", showed, unsurprisingly, that opinion on retirement age 1078 was evenly split, with employers and employer organisations generally favouring the ability to set the retirement age, for many of the reasons that the hon. Gentleman set out in his speech, and organisations campaigning for age equality preferring no retirement ages. However, even in those two broad groups, opinion was divided within some organisations.
Some respondents thought that set retirement ages had advantages. As the hon. Gentleman said, they help personnel planning and create recruitment and promotion opportunities. But there were also disadvantages; they can contribute to creating a skills shortage, and they are unfair to competent staff who want to work beyond the normal retirement age.
By far the most significant emerging view was that retirement should be more flexible, and I hope that the hon. Gentleman agrees. That view was certainly shared by all sides and by those respondents with a more neutral position. Some thought that the retirement age should be raised—suggestions ranged from 65 to 75—with flexibility to retire before or after, depending on agreement between the employer and employee.
Fifteen universities responded to the consultation, a narrow majority of which were in favour of employers being able to require employees to retire at a certain age. The responses of those who were in favour reflect the responses from others: they said that retirement ages were necessary to manage their budgets and pension schemes, to help succession planning, and to avoid having to keep on poorly performing staff.
Universities that thought that mandatory retirement ages should be abolished recognised the need to value diversity and the benefits of having access to greater experience for longer. They also recognised the need to judge people on the basis of their performance, rather than arbitrarily on their age, and acknowledged the contribution that older people can make to the economy.
The responses suggest that these are complex issues, as the EU has recognised. For that reason, the directive allows member states up to 2006 to implement its provisions on age discrimination. The Government will take full advantage of the time available. That is the only way to do justice to the complex issues and to allow full consideration, in consultation, of the best way forward. We shall, therefore, bring legislation into force by December 2006, but we aim to have it in place in good time before then so that employers have sufficient time to make their preparations to comply.
We are addressing those complex issues through a two-stage consultation process. First, we had the consultation, "Towards Equality and Diversity", which finished at the end of March. From that consultation, we wanted to established what people thought about mandatory retirement ages, for example. As for justifications, we aimed to find out what practices employers have, why they need them and why they need to retain them.
Now that part of the consultation has ended, we are in the process of developing specific proposals in the light of the responses, and we shall consult on them early in 2003. Of course, we are continuing to talk to stakeholders as we consider the options on which we shall consult formally next year. Officials have a programme of seminars with key stakeholders, such as big and small employers and trade unions, and I have asked them to engage with the higher education sector.
1079 The hon. Gentleman asked that we take account of the experience of other countries, such as the United States of America and Australia. When I had some responsibility for this issue, I visited people in both those countries to talk to them about their legislation on discrimination. The Americans have a different set-up in their country, and their Age Discrimination in Employment Act has been on the statute book since 1967, with various subsequent laws amending it.
Although the American experience can provide us with useful lessons, experience from abroad also suggests that there are no easy off-the-peg solutions. The path to legislation, and the legislation itself, differs from country to country. Overseas experience suggests that age discrimination law is an evolving business. The case law in America bears that out. Although legislation introduced there in 1967 covered employment only, there have been several exceptions that restricted, for instance, the scope of the legislation to those aged 40 to 65. As I said at the beginning of my remarks, we want to tackle age discrimination against young people, too.
Another clear message from overseas is that we need to find the solutions that best fit our particular experience. That view is reflected in the EU directive itself. Recital 25 of the directive refers to the fact that provisions in respect of age discrimination may vary in accordance with the circumstances in member states. That is our view. This is complicated business, and we need to get it right for our particular circumstances.
We cannot tackle age discrimination through legislation alone, however. We must promote a change in the culture in the workplace. We need to get rid of those false stereotypes that characterise older workers as incapable of learning new skills, slow to adapt to change, and likely to take more sick leave—stereotypes that universities, I am sure, will not want to perpetuate. Such stereotypes would undermine the very professionalism that the hon. Gentleman says—rightly—that universities have striven to achieve and wish to maintain.
Other countries that have age legislation, such as the United States and Australia, have found that the effectiveness of legislation is greatly helped by operating it in conjunction with other policies that promote equal rights and educate employers about their obligations and rights. To help bring about that culture change, we introduced the code of practice on age diversity in employment, which was launched by what is now the 1080 Department for Work and Pensions in June 1999. It was produced in partnership with organisations such as Age Concern, the Trades Union Congress, the Confederation of British Industry and the Employers Forum on Age. It features practical guidance for employers, backed up by good case studies. It sets the standard for non-ageist approaches to recruitment, training, development, promotion, redundancy and retirement. I commend the code to universities and others.
This is not legislation that employers should fear. It will not require any employer, let alone universities, to recruit or keep on someone who cannot do the job. It does not replace competence with age. In fact, recital 17 of the directive says:
This Directive does not require the recruitment, promotion, maintenance in employment or training of an individual who is not competent, capable and available to perform the essential functions of the post concerned or to undergo the relevant training".I reassure the hon. Gentleman that I shall consider carefully all the points that he has made. We shall ensure that the higher education sector is fully engaged in the consultation process as we develop our proposals. Like all stakeholders, it will be able to let us have its views when responding to the next consultation exercise.