EU sex directive to hit insurance

THE Government appears ready to accept a controversial European 'gender directive' that would force women to pay higher car insurance premiums and men to lose out on their pensions.

Ministers had promised to fight the proposals, but insurers fear they will give way in return for keeping Britain's opt-out from the 48-hour working week.

The draft directive, produced by Europe's social affairs commissioner Anna Diamantopoulou, has provoked outrage. Insurance companies and pension funds say the directive would outlaw one of the most important factors in risk calculation - the sex of the insured party.

For women, who are statistically much less likely than men to be involved in car accidents, motor insurance rates would rise by between ten and 15%.

For men, whose lifespan is on average five years shorter than women's, annual income from a £100,000 retirement annuity would shrink by £221 to £7,178.

And for insurers and pension funds, the administrative costs of complying with the directive would be enormous.

But Diamantopoulou has described the practice of charging and paying different rates for men and women as 'abhorrent' and dismissed the 'Cassandra cries' of industry representatives.

The Department of Trade and Industry said: 'We recognise the concerns raised by insurers and are talking with them and others to achieve an outcome in the best interests of the UK.'

But the DTI is under fire from Diamantopoulou on another front - her attempt to end Britain's eleven-year opt-out from the 48-hour week.

She claimed this month that 'British workers want to work fewer hours' and she started a three-month consultation on curbing or ending the opt-out.

The Government, however, is determined to maintain it, with Tony Blair and Gordon Brown insisting it is essential for flexibility and competitiveness. Ministers add that it is a basic right for employees to work more than 48 hours if they wish to do so.