To ask the Minister for Women if she will make a statement on Government action to close the gender pay gap.
I am delighted that this urgent question has been called today because we are only a few hours away from the deadline landing for private sector employers to publish their gender pay gap results.
Last year, the Government introduced groundbreaking regulations that required large employers to publish, for the first time, the difference between what they pay their male and female staff in average salaries and bonuses. For the first time in this country’s history, the boards of large employers have had to have conversations about how they treat their female staff. By making this information publicly available, we have empowered employees to see the scale of the pay gap where they work, and hold their bosses to account. The vast majority of companies are eager to tackle the gender pay gap themselves. That is why the Government have provided guidance to help employers to develop action plans to close their pay gap.
Reporting is just the start. It is crucial that all employers use this data to identify the barriers that women face and take action to break down those barriers. We are supporting business in doing that by publishing evidence-based guidance on how employers can diagnose the cause of their gap, and the practical actions that they can take to close it. We recognise, though, that overturning structural inequalities in women’s pay cannot be done overnight. Most companies will not see a dramatic reduction this year, but what matters is that they are taking the right action to drive change in the right direction, and progress is being made.
Beyond reporting, this Government are actively working to support women in the workplace and to close the gender pay gap. We are supporting both women and men who have caring responsibilities, through increased childcare entitlements, promoting flexible working and shared parental leave. We are working with business to support and increase women’s progression to senior positions. We are leading by example, and aiming to make the civil service the country’s most equal and inclusive employer by 2020. We are helping women to access every profession, by working to increase the number of women taking qualifications in science, technology, engineering and maths.
Change will not be easy, but we have only to compare where we are now with even 10 years ago to see that a future of fair and equal pay is now within reach. That should be a source of pride for us all.
I am not sure whether the Minister has been reading the same statistics as me, but analysis so far has shown that the median pay gap has actually got bigger than it was last year. The companies that have been reporting this morning show that, on average, 78% reported a pay gap that favours men.
The Government and public sector should lead by example. As we know, the public sector deadline was 31 March, and initial analysis of this year’s public sector report shows that the pay gap has not narrowed. Shockingly, the Department for Digital, Culture, Media and Sport reported a 22.9% pay gap, compared with just 8.2% in 2017. The gender pay gap in the Department for Exiting the European Union increased from 8.9% to 14.5% in 2018—I could go on to mention the Department for International Development and the health service. Basically, the pay gap is getting worse, and I am sure that once we start looking at the race pay gap, we will find that even more distressing.
The Minister must stand at the Dispatch Box and say not only that improvements must be made, but that we must take the next steps to ensure that companies have action plans as part of their reporting procedures, and that if they do not try to close their gender pay gap, they will face additional fines. That is what a Labour Government would commit to do, because at the moment this is unfortunately just a tick-box exercise. I hope that the Equality and Human Rights Commission will be given more funding to issue sanctions.
I am pleased that the hon. Lady asked this urgent question, but she has fallen into the trap of citing figures before the deadline has passed. That deadline passes at midnight, and as she will know—we had the same conversation last year—the last day of reporting is the day on which everybody suddenly realises that the deadline has arrived, and they send in their reports. Overnight we have already seen a 2% increase in private sector employers reporting, so we must not, and I will not, speak about the figures for private sector employers until the deadline has passed.
I am delighted that the hon. Lady mentioned the public sector gender pay gap, and I join her in admonishing those who have not yet reported. It is disgraceful that public sector bodies have not complied with the law in meeting the deadline on Saturday last week, and I am sure that after this urgent question, she will be straight on the phone to the chief executive of Brent Council which, as of this morning, had not reported. The deadline was Saturday and it has had some time to realise that it has passed, but it has not yet reported, so I hope the hon. Lady will communicate to her council the strong message that she communicated at the Dispatch Box.
Let me reassure the hon. Lady that after the deadline has passed I will write to every public sector employer to remind them not only that they must comply with the law, but that I expect them to issue action plans. If we are to tackle the gender pay gap, we must lead by example in the public sector. Once Brent Council has realised that it is acting outside the law, I am sure it will publish its gender pay gap figures and ensure that its action plan is as detailed as the hon. Lady would expect.
In other news, more than 10,500 businesses are having a conversation about the gender pay gap and how they treat their female staff, and it is a delight to see so many hon. Members present today, keen to ensure that women are paid fairly and properly in their employment.
Order. Several Members wish to catch my eye, but the Backbench Business Committee debates are heavily subscribed, and there is a business question to follow. There is a premium on brevity from Back and Front Benchers alike, and I want to move to the business question no later than 11 o’clock. People should take their cue from the right hon. Member for New Forest West (Sir Desmond Swayne), whose succinctness is exemplary. I call Mr Philip Hollobone.
As I said, at the moment it would not be right for me to comment on the pay gap because the figures are still coming in. We know that half of women are employed in the education, health and retail sectors, so we are concentrating on those sectors when providing employers with guidance on how to address their gender pay gaps. We want action as quickly as possible to ensure that women are paid properly.
Women are key to improving the economy—we already know that. As a member of the Select Committee on Women and Equalities, I, along with the right hon. Member for Basingstoke (Mrs Miller) and many others across the House, have sought to hold this Government to account.
The women in work index has found that closing the gender pay gap could boost the economy by £2 trillion, yet the UK Government have only shifted from 14th to 13th place on the index. Scotland has been a top performer on the gender pay gap in the UK. However, there is still a great deal more to do, including on greater pay transparency, increasing early years and childcare provision, and representation on public boards. The Scottish National party Government have committed to narrowing the gender pay gap by the end of this Scottish parliamentary term, and to tackling labour market inequalities. That is a bold aim and it must be matched by this Government. I call on the UK Government to go further than just auditing larger companies. Real action needs to be taken to ensure that those larger companies are taking the charge. Will the Minister support the SNP’s aim to lower the threshold to 150 employees and to introduce sanctions for employers who do not comply with the current law? Will she match the commitment made by the Scottish Government?
The hon. Lady knows that last year was the first year for reporting gender pay gap figures and this is the second. Although I am impatient to get the gap closed, we have to acknowledge that it will take time for businesses and employers to close it. I would therefore like the data to settle, perhaps for another year or so, before we start looking at reducing the number of employees at which companies and businesses have to start reporting. We acknowledge that it is an extra bureaucratic responsibility for businesses. We want to make sure that the large employers are doing their best before we move it down, but I look forward to that work.
I am very grateful to my hon. Friend for her question. At this time in our nation’s great history, where the public expect us to collaborate and get on with our business and to perhaps lower the heat and anger in some of our debates, I very much hope that colleagues across the House will welcome the fact that 10,500 employers are complying with the law and meeting the expectation that they treat their female staff properly. I hope for more joy and collaboration across the House.
I lay on the record my thanks to the EHRC, which did an excellent job last year of pulling in those employers who missed the deadline and ensuring that they reported—some businesses had just made a mistake or did not quite understand what they were supposed to do—and that is how we had 100% compliance by 1 August.
Does my hon. Friend agree that it is important to check the gender pay gap right across the workforce, not just the boardroom? From my 11 years in industry, the biggest gaps often appeared at senior management level, but also among junior managers below boardroom level. We must have a range of information.
My hon. Friend makes an excellent point. This is not just about board level, although of course that is important; it is also about ensuring that women are paid properly and fairly when they start their career. Work on the gender pay gap will help address that, because it forces employers to look at how they treat women throughout the entire structure of the business.
The Minister talks of a future of equal pay, but she knows that that cannot happen as long as well-paid sectors such as engineering and science are dominated by men and low-paid sectors such as care are dominated by women. Will she therefore adopt Labour’s policy of sector-specific diversity charters, so that we can start to address the structural issues in some sectors?
It starts much earlier than that. We must give girls the confidence to carry on with science, technology, engineering and maths in school. That is why we are doing so much work to ensure that girls are encouraged to continue studying those subjects. The hon. Lady is absolutely right to point to industries such as engineering. In fairness, many businesses in those very male-dominated industries are beginning to get more women in at the lower end of the pipeline, but this will take time and, as I have said, I want to bring business with us rather than dictate from on high how society should view female employees. This is as much about cultural shift as it is about structures and legislation.
I must not comment on individual cases at the Dispatch Box, but I would certainly be happy to discuss that with my hon. Friend in due course. The message to academia is that we expect our universities to reflect the society that they serve. We have a wonderful diversity of students now, and one would hope that our universities will reflect that.
Of course, that is a matter for the House, but I make this observation. I spend a great deal of my time persuading women to take the big step of coming into public life. I think the attitude and atmosphere in Parliament at the moment is putting a lot of women off—it is pretty toxic. The predictability, or unpredictability, of Commons hours can also cause problems—my little boy started his holidays this week, and I had a bit of an “about-to” this morning trying to sort out childcare—but we will address this. We have to ensure that the Commons is more flexible in how it works so that we can encourage people from across our society to join us.
First, I think businesses realise that if they do not do as the public expect them to, they will face a great deal of public scrutiny and reputational damage. One employer, for example, did not include its partnership figures in its return. The public spotted that and called it out; and, in fairness to that employer, it revised its figures to include the partnerships. That sort of transparency and scrutiny will help businesses to comply with the law.
I share the hon. Gentleman’s concern about that. As I say, I will be writing shortly to every public sector employer reminding them of their duty to meet the deadline but also to set out their action plans. I do not think there is any excuse, frankly, for public sector employers, who want to lead the world in the way that we conduct our business, not to have an idea of how they are going to address the sorts of gaps that he has described.
Very much so: drawing on a diverse pool of people for a business or organisational structure makes great business sense. The McKinsey report recently showed that having a diverse workforce can add as much as 15% to a company’s success compared with its competitors.
The Minister might not be aware, but I have a vested interest: I have three daughters and four granddaughters. Progress has been made, but we need to accelerate it. This is a week of celebration: 20 years since the introduction of the minimum wage. Can I encourage the Minister to use the B-word? Tony Blair and the Labour Government introduced the minimum wage and did so much to bring more women into this place, so will she use the “Blair” word when she goes on the media?
The Select Committee on Business, Energy and Industrial Strategy looked at the gender pay gap immediately after the first round of reporting last year and drew attention to the improvement in economic performance that could be achieved by fully utilising the talents of women in the workplace. The Minister has already spoken about the challenges that some businesses have faced in calculating the figures. We called for improved guidance for businesses to enable this round to be more easily undertaken by businesses. What progress has been made on that?
My hon. Friend has raised an important point. My officials consult businesses regularly to ensure that our guidance is up to date and practical. We review it constantly, but if they are unhappy with any parts of it, I ask them please to let me know. We are very conscious that the calculations can be difficult and confusing, especially for businesses that do not have human resources departments.
This is exactly the challenge that we are facing. We know that healthcare is one of the three sectors that employ 50% of the total number of working women. The NHS trusts themselves should be looking into why those gaps have increased. As I have said, I shall be writing to all public sector employers asking for their action plans. We can help them to draw up those plans to ensure that they make a real difference.
Next year is the 50th anniversary of the Equal Pay Act 1970, yet the gender pay gap is still too large. The Business, Energy and Industrial Strategy Committee recommended that employers should have mandatory action plans to show how they were going to close their pay gaps, but the Government refused to adopt its recommendation. Will the Minister say why, and whether she will look at the recommendation again?
Thus far, just under 50% of employers who fall within the gender pay gap reporting regime have issued their own action plans voluntarily. Because we want to bring business with us, I would much prefer employers to ask themselves questions about the way in which they treat their female staff rather than conducting a tick-box exercise, as is alleged to have happened. I will of course keep the position under review, and if we do not think that employers are making enough progress, we will act.
The Minister correctly observed that good-quality childcare is essential for women going back to work, but the number of nurseries closing has risen by 66% in the last year, and only just over 50% of local areas have enough childcare services for parents who wish to work full time. Will the Minister speak to the Secretary of State for Education about the impact that the state of our early years sector is having on women who want to work?
The hon. Lady is right to raise this issue. That is why we were so keen to introduce free childcare for children aged three and above. I will happily raise the point about local nurseries with the Secretary of State, but we are trying to encourage businesses and employers to think more imaginatively about how they can retain the talent from which they benefit. They may have spent many years training and developing female employers through schemes such as flexible working and shared parental leave—bold schemes that will make a cultural as well as a practical difference.
I expect them to look at the variety of diagnostic tools that are available on the gov.uk website, and to seek advice about how to better diagnose and then deal with their gender pay gaps. This is not an insurmountable problem, and health trusts need to understand that the gender pay gap expectation applies to them just as it applies to any large multinational company.
On a point of order, Mr Speaker. I have just contacted the chief executive of Brent Council, Carolyn Downs, and she has informed me that Brent Council submitted the gender pay gap report on Friday 29 March via the Government’s own portal. I wonder whether the Minister would like to stand and make an apology to Brent Council.
Further to that point of order, Mr Speaker. That was not the information I had just before I walked into the Chamber. I am advised that it was not on the gender pay gap portal. Of course if Carolyn Downs has done what she should have done and followed the law I am not sure I will congratulate her; I am just pleased that she is following the law.