My Lords, it gives me enormous pleasure to have the opportunity and privilege to introduce this Bill today. Equal treatment, equal pay and family-friendly working practices are issues that I care passionately about, as they are to all noble Lords taking part in today's debate. I am enormously grateful that so many of your Lordships, with a wealth of experience and often a lifetime of dedication to these causes, are speaking.

At its heart this is an issue of social justice. Equal pay is not just for high-flying women in the City, in law or industry, who are often earning hundreds of thousands of pounds a year. It is just as much about ensuring proper protection for women at the bottom of the pay scale who are working hard to provide for their families, day and night, and who do not have the voice or the confidence to fight for fairness.

The Bill was born from the excellent work carried out by the Conservative Women's Policy Group, which outlines the opportunities and challenges that women face today. It spent months of hard work travelling around the country, speaking to many women and tackling some difficult and disturbing issues. It was left in no doubt that, by all measures, the gender pay gap, its existence and extent, is beyond doubt. They suggested as a remedy the measures included in the Bill.

My right honourable friend Theresa May wrote to Harriet Harman to say that these are such important issues that we would be happy for them to be included in the forthcoming equalities Bill. Although the Government are undoubtedly sympathetic, our offer was declined so I decided to introduce a Private Member’s Bill to bring this debate to your Lordships’ House. I am not seeking to do anything revolutionary, simply to ensure that the Equal Pay Act 1970, which arrived on the statute book while I was still at school, is properly observed. I also wish to build on the current flexible working practices that the Conservative Party has warmly supported.

The purpose of the Bill is twofold. First, it would strengthen existing pay legislation to make it more effective in the face of unfair treatment. It would do so in two ways. First, it would change the “material factor” defence to include a test of reasonableness. The Equal Pay Act currently provides for the “material factor” defence for cases where the variation is genuinely due to a material factor which is not the difference of sex. However, tribunals are not presently required to agree that such a material factor is reasonable, only that it was the cause of the pay difference and that it was not discriminatory. For example, an employer could say that it was reasonable to pay a woman working in Manchester less than a man doing an equivalent job in Leeds, without having to prove that the cost of living in Leeds was greater than in Manchester.

Clause 1(2) introduces such a reasonableness test for the “material factor” defence, which would make it easier to identify cases where pay discrimination is indirect and not just direct. Employers do not currently have to give a justifiable reason for pay inequalities. While I acknowledge that this can be a complicated area, and employers have every right to pay different amounts where a woman genuinely wishes to vary her contract, there is clearly room for abuse and the Bill would close that loophole.

I must apologise for a drafting error. Those who have worked with me on Bills will know that I could never aspire to be a parliamentary draftsman. In my defence, however, this was looked at by a number of people. I am most grateful to the noble Lord, Lord Lester, whose eagle eyes spotted the mistake. Clause 1(2) should read, “In Section 1(3) … before paragraph (a)”. This will be amended at a later stage of the Bill.

Clause 1(3) of this Bill covers equal pay audits, the use of which must be strengthened to make them more effective. At the moment, if an employee takes their employer to a tribunal and that employer is found guilty of discrimination, the appropriate action is taken and the case ends there. If another employee suspects that they are also a victim of such discrimination they would have to bring their own action, effectively starting the whole process from scratch. Subsection (3) would introduce the requirement that employers found guilty at tribunal would have to undertake an equal pay audit, thereby benefiting all other employees and identifying and rectifying any further abuse.

Pay audits are costly, time consuming and demand that organisations publish their findings. That is why I agree with the CBI that it would not be sensible to overburden business or for all employers to undertake a pay audit, although my proposed change would go a long way to deter discriminatory practices in the first place. However, companies and organisations that have undertaken voluntary pay audits, such as the Inland Revenue, have found that the process improves employee morale, loyalty and relations, which in turn have a beneficial effect on productivity—although I hesitated to mention the Inland Revenue and “productivity” with 31 January looming.

The thinking behind subsections (2) and (3) in Clause 1 is to promote good practice and encourage employers to adopt a fair and sensible approach to rewarding their staff. The majority of this country’s employers are good and caring, and are exemplary in this regard. Apart from a small number of bad employers, I genuinely believe that the others have not set out intentionally to discriminate, but have drifted there unknowingly. Over the years, they have paid a little more here and there, especially when bonuses are taken into account. However, unintentional action is no defence.

The second purpose of the Bill is to extend the right to request flexible working to all parents with children under the age of 18. Clause 2 amends the Employment Rights Act 1986 to this effect by removing the legislation that currently limits the right to request flexible working to parents with children aged six and under and carers, which came in with the Work and Families Act.

I think it is legitimate to ask why I am introducing the Bill now, in a period of such economic uncertainty and turmoil. I agree that the last thing that we should be doing at this time is subjecting businesses to more red tape and regulation, but this is not an extra regulation. Many companies operate flexible working practices already, with enormous success. Many companies strive to pay all their employees fairly and according to their talent and experience rather than their gender. The Bill therefore imposes absolutely no extra burden on them.

However, pay inequality is not acceptable whatever the economic times are. We must ensure a culture of equality and fairness in the workplace, to motivate women, who will play a crucial part as the economy recovers. I am sure that noble Lords around the Chamber will share my dismay that, in the 21st century, women are still paid on average 17 per cent less than men. That figure rises to 36.3 per cent for part-time work, and 45 per cent of women who work in the UK do so on a part-time basis.

These are often women who are supporting children, elderly parents or, in the current climate, unemployed partners. They deserve to be treated fairly and to be protected by the law. The Government have made some admirable pledges in this area but, unfortunately, to little avail. The pay gap actually widened last year. That is why I am bringing this legislation before your Lordships’ House today, in this time of financial uncertainty for so many British women, so that we can give them the help and support they need now.

A report from the TUC last summer made a direct link between low levels of women’s pay and child poverty. I ask your Lordships to consider these proposals in that light. Half of all children living in poverty are being raised in households where one or both parents work. If the working mother is trapped in a low-paid job, or one which affords her precious little quality time with her family, that will have a direct effect on the welfare of her children.

The issue of flexible working goes hand in hand with this. In order to balance family commitments, women often return to work, after having their children, to lower paid and lower level jobs than they previously held, as that is the only employment available to them. If flexible working were available to all parents—crucially, that means fathers as well—the burden of childcare could be shared and work could fit more easily around family commitments.

Flexible working does not have to be a burden on business. Working Families says that,

“flexible working is a resounding success, bringing benefits to employers and families”.

In fact, many companies operate flexible working practices already, some without even realising it. Flexible work does not necessarily mean part-time work but can incorporate a variety of working practices, including flexi-time, home working or job sharing. It has been proven to increase staff commitment, productivity and retention. It can save on office costs, rehiring and retraining and enables companies to build a viable, committed team who feel immense loyalty towards their employer for respecting their right to family and other commitments outside work.

I am very pleased that the noble Baroness, Lady Vadera, will respond to the debate on behalf of the Government and very much look forward to hearing her comments. I am sure that, as a former banker, many of the issues I have raised will have particular meaning for her. Personally, I am in favour of extending the right to request flexible working as widely as possible, although I hesitated to go so far as to say that the right should be extended to all workers under the Bill because I care about not overburdening businesses, especially small businesses, and a total right would need careful and detailed discussion. But the companies that have made it a general policy have reported greater productivity, better staff retention levels and an ability to adapt to the 24-hour culture that the modern business world demands.

At the end of last year I had the privilege of attending a gathering at Manchester Town Hall organised by the Lord Lieutenant of Greater Manchester for all the women of Greater Manchester who had served so valiantly in the Land Army and Timber Corps during the Second World War. We had a great afternoon. We had a thanksgiving service, sang all the old wartime songs and then had tea. One of these remarkable women, to whom we owe so much, told me how back-breakingly hard the work had been and how the women had to do the same work as the men. “Mind you”, she said, “we didn’t get paid as much”. I beg to move.

My Lords, the aim of the Bill is straightforward, succinct and, indeed, necessary. I thank the noble Baroness, Lady Morris of Bolton, for bringing it forward. As we have just heard, the Bill has three clear aims. First, it establishes a new test of reasonableness as a defence in an equal pay claim. Secondly, it provides for a compulsory pay audit where employers are found guilty of gender pay discrimination. Thirdly, it extends the right to request flexible working to parents of children up to 17.

I want to say a few words about these principles before I offer a general comment on the social and economic case for supporting the Bill. Currently, all that an employer has to prove is that the difference in pay between a man and a woman is not caused by direct or unjustifiable indirect sex discrimination. Under the Bill, any difference in pay between a man and a woman in equivalent jobs must be objectively justified and reasonable. My worry here is that “justification” could become a legal paradise in which lawyers play. Under the Bill, where employers are found not to be meeting the statutory requirements of the Equal Pay Act, they will be obliged to institute a pay audit, as we have heard. As the pay audit will be a statutory requirement, we should be told what form it will take, its methodology and who will carry it out. Will the results be published and, if so, where and by whom?

While I welcome the Bill, I can already hear the echoes of the backwoodsmen from the CBI and every other employers’ organisation in the land asking how anyone can promote these measures at a time like this, and saying, “You will bring the economy to its knees”. For good measure, they will think of a number, double it and claim the result as the number of jobs that will be lost if the Bill becomes law. I only hope that this time they will not have the support of the party opposite, as we saw in the debate on the minimum wage a few years ago.

Let me look at the evidence on why the Bill is needed. We have heard the noble Baroness, Lady Morris, mention some of the figures, which are substantiated. The evidence shows a 17 per cent pay gap between a man and a woman doing the same full-time work: for every pound that a man earns, a woman earns only 83p. In the private sector that gap widens: a woman earns 78p—a 38 per cent gap. It is no wonder that last year 44,000 equal pay claims were brought before the courts, which means that all of us as taxpayers are meeting the cost of pay discrimination.

Throughout history the women of this country have always had to fight to get pay justice, from the match girls in the East End of London to the gallant sewing machinists at Ford in Dagenham in 1968, who discovered that they were being paid 15 per cent less than their male colleagues for doing exactly the same job. After three weeks on strike, with the mediation of the late Barbara Castle, the Ford sewing machinists took a giant step towards pay justice, which established the case for the Equal Pay Act 1970.

On the last leg of this Bill on the right to flexible working, history does not guide me. However, I will say this: in the busy world of today’s labour market, flexible working can be a liberating experience in balancing the demands of home and work. Ironically, at a time of economic recession, flexible working is exactly what the economy needs. One thing is clear—as the social order within families is rebalanced, the essential ingredients of work will be when we work, how long we work and how we balance working time and family time. The Bill is an idea whose time has really come. It is morally right and socially just and on that basis I wish it well.

My Lords, I warmly congratulate the noble Baroness, Lady Morris of Bolton, on introducing the Bill. I also congratulate all her Conservative female companions who did all the footwork in gathering the statistics to back it.

The Bill may not be perfect—indeed the noble Baroness admitted as much—but, above all, it keeps the issue of equal pay for men and women, and flexible working, firmly in the public eye. Certainly there is a need for all employers, not least at this time of critical economic uncertainty, to keep both issues high on their priority agenda.

Progress towards equal pay for work of equal value for full-time employees has undoubtedly been appallingly slow, given that the Equal Pay Act was passed nearly 40 years ago in 1970. The 2008 figures show that the gap has increased slightly this year—we have already heard that from the noble Baroness. However, given that the UK was among the first nations to introduce equal opportunity laws, it would be interesting to know where we stand in the world league table on progress towards equal pay. Perhaps the Minister can answer that.

However, even more worrying is the pay gap for part-time workers, which stands at as high as 36.3 per cent. As noble Lords will know, the majority of part-time workers are women, mainly due to family responsibilities. Today, no fewer than 45 per cent of all women employees work part-time, despite the fact that more fathers are beginning to take some share of family responsibilities.

On the equal pay front, the Bill, as I understand it, will only require companies that have been found by a court or tribunal to be in breach of the Act to undertake a company-wide equality audit. I, too, have read what the CBI and others have said, and there are some reservations. We must pay particular attention to the problems of SMEs; perhaps that can be looked at later. However, there are, surely, substantial benefits. The Bill would certainly simplify the whole process and cost taxpayers less, as the noble Lord, Lord Morris, said. It was my experience as the first deputy chairman of the EOC that, once a clearer legal requirement was in force, companies made far more effort to obey it.

However, I want to concentrate on the flexible working aspects of this Bill. The younger generation of company executives know that it is in their own and their companies’ best interests if they can hold on to the talent that they have recruited and trained, but there are still too many employers of the old school who have not realised how expensive it is to keep on recruiting, retraining and churning employees, rather than investing further in those that they have already spent money on.

This Government have done a great deal to promote a better work/life balance, and I congratulate them on the initiatives they have taken, even if those initiatives have not always delivered as fully as other noble Lords and I would have hoped. More nursery provision is not enough. Encouragement of flexible working allows many more mothers to combine caring for their children. We also know that often they may be caring for their own ageing or disabled family members. Flexible working helps women not only to continue in employment but, of course, to contribute to a retirement pension. The Government’s recent Pensions Act—for which congratulations are also due—has helped considerably with its better pension opportunities for women, and particularly the extra buy-back options which enable those who qualify to purchase a higher pension. It is no longer acceptable for there to be a 40 per cent gap, which still exists, between men’s and women’s pensions, nor is it even remotely acceptable that women’s potential remains undeveloped, when competition in today’s global market requires employment of the nation’s best talents, whether they are in men or women.

Women will continue to be the majority of those who live in poverty at the end of their lives, unless more drastic action is taken to make flexible working at relevant times of their lives the norm for both sexes. I thoroughly underline what the noble Baroness said about both sexes. There is clear evidence, too, that more fathers want to take a more active and responsible role in bringing up their children. Yet, although some 14 million employees now work flexibly, the vast majority are still women.

Some months ago an Oral Question was asked about how many women had used the right to request flexible working under recent European and domestic laws and to how many women it had been granted. The answer for women was quite encouraging, given that we were at the start of the process. Yet, when I followed with a supplementary question, asking how many men had asked for and been granted the same flexibility, the Minister who replied had not even been briefed on that.

Research shows a positive relationship between flexible working, lower stress and improved health and well-being, and there are many varied ways in which flexible working can be achieved—working term-time only, working from home or job sharing, for example. Almost invariably, the employer gets value for money.

The Cranfield School of Management is quoted by Working Families as having demonstrated that the cost to employers of making such adjustments was £68 million, while the benefits from higher productivity, lower turnover and reduced absenteeism were £91 million. All that this Bill proposes is an extension of the hours already available from April of this year for 16 to 18 year-olds, by sensibly anticipating the raising of the school-leaving age in a year or two to the same level. The Bill would also bring some uniformity to other groups that need the same ability to combine employment with caring—those caring for children with disabilities or special learning needs, and disabled adults. Carers play a vital role and save the state huge sums. We also know that there is high support for this right to be extended to all employees. I hope that the Bill’s proposals will be a firm step in that direction. It already happens in Holland and Germany, where employees have the right to request flexible working from all employers. We also know from research that 58 per cent of men and 63 per cent of women in this country support the move for this right to be available to all employees.

I end by stressing that given the horrendous economic situation and considerable job losses already being recorded throughout the economy, there are forecasts that women will be the first and the most to suffer and lose their jobs. Yet a wider ability to request flexible working would be invaluable to women, as well as a valuable tool for employers to help them keep their companies and their employees in work. I wish the Bill well and, again, I congratulate the noble Baroness on introducing it.

My Lords, I wish to focus on the Bill’s second part, which concerns flexible working. The right reverend Prelate the Bishop of Southwell and Nottingham sponsored a debate on this subject in March 2008. Even in the current difficult economic climate, from these Benches we urge the Government to keep to their strategy of encouraging the right to request flexible working and to close the age loopholes.

We recognise that a major part of current government policy in combating poverty and reducing benefit dependency is maximising the number of people in work. On the other hand, the Government increasingly emphasise the responsibility of good parenting, and we support that. Therefore, we have two policies. We agree that work is good. It provides not only economic opportunities but important personal and social benefits, enabling individuals to develop their skills and talents, enhancing self-worth, encouraging a sense of responsibility and enabling individuals to make economic and social contributions to society. However, flexible working is the essential link that would help to make those two policies compatible. We need to continue to address the negative impact on employees’ family life of long hours, inflexible working and atypical working patterns. It is those in employment on the lowest incomes who work the most atypical hours without being able to control them.

Having a parent see-sawing between work and benefits because of the time demands of the work will do nothing for the security of the family income or to help combat child poverty. Nor will it help to build stability in the family. For the Government it is particularly important that, when encouraging lone parents to return to work, that work should not create such stress that those parents end up taking time off or abandoning the work because they cannot fit it in with the responsibility of looking after their children. Giving parents good, affordable childcare, a decent wage and the right to work flexibly will make a huge difference to the family’s well-being, contribute positively to relationships within the family and encourage the social, emotional and educational well-being of the children.

Flexible working arrangements can work for employers, too. There is little evidence that long hours bring increased productivity. The organisation Working Families says that its recent research with Cranfield School of Management shows a positive relationship between flexible working hours and individual performance. It argues that in the current economic climate maximising productivity and performance will have to be a priority. Many employers now recognise the link between flexibility and organisational requirements, even for low-income employees, with higher productivity, lower turnover and reduced absenteeism.

We congratulate the noble Baroness, Lady Morris, on sponsoring the Bill, and we hope that it meets with every success.

My Lords, I start by declaring an interest as the chair of the Women’s National Commission, which is currently discussing these issues at great length.

Although I have reservations about the proposals in the Bill, I have no reservations about the principles of the noble Baroness or the intent behind the Bill to eliminate inequalities in the workplace and provide greater support for working families. It is that latter point on which I wish to start my comments.

Supporting families in balancing work and home has been a key plank of the Government’s employment policies since the establishment of the Work and Parents Task Force in 2001, followed by the Employment Act, which, I regret to say, at that time the Opposition opposed, the extension to carers in 2007 and the Walsh review in 2008. The aim of all those actions has been to support families in finding working hours to match their caring responsibilities, whether for children or for adults in need of care or, all too often, for both. Families must have genuine choices about how they balance work and caring responsibilities, which are now more complex with the many changes in family structures and the development of more intricate family arrangements, which have shaped income, living standards and working patterns.

Alongside supporting families, it has been important to enable businesses to plan and manage their workforces effectively, and there is no question that employers have benefited. As the noble Baroness rightly said, employers who have adopted flexible working have benefited not only from lower levels of sickness and absenteeism but from improved retention performance. There is clear evidence of a positive relationship between flexible working and individual performance—a view that is endorsed by the British Chambers of Commerce in its briefing on the Bill, although at the same time it opposes the detailed proposals before us. However, more needs to be done to raise awareness of the right to request flexible working among employees and employers.

The Government’s regulatory impact assessment, which accompanied the recent Walsh review, showed that extending flexible working to parents of older children could lead to savings for employers. As the noble Baroness, Lady Howe, said, the annual cost to employers of making adjustments to working patterns stood at £69 million, compared with the benefit from higher productivity, lower turnover and reduced absenteeism of £91 million. Therefore, I think that the argument for extending this right to parents of older children is made.

The in-depth Walsh review, after consultation with a wide range of stakeholders, recommended that parents with children up to the age of 16 should be able to apply for flexible working, a view which the Government accepted and which is due for implementation in April this year. The amendment before us was considered by Imelda Walsh but rejected on the grounds that over the age of 16 a child is a young adult and is therefore of an age to take personal responsibility and show a good measure of independence. I also think it is not appropriate to suggest a further change at this time, when employers have been adjusting their working patterns to implement the Walsh recommendations. Again, as the CBI said, consideration of a further extension so quickly seems premature. The British Chambers of Commerce put it more strongly, saying that it would damage business and send the wrong message to businesses at this time.

On the question of equal pay, while there has been a reduction in the median overall gender pay gap since 1997 from 27.5 per cent to 22.6 per cent in 2008, in accord with other speakers, I am stating the obvious by saying that progress has been slow. There are many factors in the continuing pay gap which have to be overcome. The gender pay gap is complex and encompasses many factors besides pay discrimination: differences in men’s and women’s labour market experiences; skills and education; occupational segregation; lack of quality of part-time work; historical culture; and gender stereotyping.

An analysis by the Women and Work Commission, chaired by my noble friend Lady Prosser, suggested that, if more women moved into higher-skilled, higher-paid occupations and if more moved into the labour force or increased their hours, the potential benefits for the UK economy could be worth £15 billion to £23 billion or 1.3 to 2 per cent of GDP. That shows that no country can afford to ignore the skills and talents of half its population. So, clearly, this historic inequality has to be tackled.

The Conservative policy document, Women in the World Today, says that these amendments to the Equal Pay Act would tighten the law by introducing a “reasonableness test” into the Act, but all the evidence from those who work on the ground on these issues suggests that in reality that would not be the case. A “reasonableness test” implies a subjective test, with courts required to view the justification of the factor giving rise to the pay gap from the perspective of the employer—for example, knowing what the employer knew and how it operated in those particular circumstances—and it could be considered reasonable to use that factor as a determinant of pay, regardless of the discriminatory effect it has on women.

It is also difficult to decipher what an “objectively justified as reasonable” test means, as it becomes jumbled up with “objective justification”, which is the standard defence for indirect discrimination. That might add further to the already complex and labyrinthine case law, lead to further confusion in the tribunals and courts and delay further the already very slow process of equal pay claims. That is certainly not what women with equal pay claims need. Therefore, it is helpful that the Government intend to simplify equal pay legislation in the equality Bill. The amendment might also give the impression that a weaker standard of justification was required than was actually the case under EU law.

The TUC and others, such as the Fawcett Society, have campaigned for many years for mandatory equal pay audits, and the Equality and Human Rights Commission, in its briefing on the equality Bill, states that equal pay audits can be a useful mechanism in testing how organisations approach equal pay issues. Equal pay audits were also recommended in the code of practice on equal pay, which received parliamentary approval in 2002. However, views are divided on the value of pay audits, and no doubt there will be considerable further discussion on the issue. I have doubts about the particular conclusion that is suggested in the Bill. I doubt that it is the responsibility of the courts or the industrial tribunals in the manner suggested in this Bill.

It is clear, however, that we cannot tackle inequality if it is hidden. If you cannot see the problem, you cannot solve it. I appreciate that, if equal pay audits are to be taken forward in the equality Bill, they will only resolve part of the problem, but it is an important part. They will have to be combined with sensible transitional arrangements, taking into account the cost of the process. If pay audits are not pursued, other measures will need to be put in place to increase transparency of pay and remove this long-term discrimination against women. For instance, procurement offers significant potential as a way of promoting equality and good equal pay practice. It is therefore encouraging that the Government have signalled that they intend to use procurement positively to promote equality. This follows the positive approach to procurement in Northern Ireland under the Northern Ireland equality of opportunity contract condition, and by the GLA in respect of the Olympics.

Other measures might include strengthening the role of equality representatives and allowing hypothetical comparators, rather than the current requirement for actual comparators. Equal pay is the only area of discrimination law where claimants have to identify an actual comparator in the same employment who is treated differently from them. These and other preventive, positive and pragmatic reforms will make a much-needed shift in approach to gender pay.

Recent polling by UNISON and the Fawcett Society showed that 83 per cent of women and 74 per cent of men maintained that pay difference must be closed regardless of the credit crunch. I support the noble Baroness: even in difficult economic times equality should not be put on the back burner. We need a positive pay policy, and we need radical measures that will eradicate pay discrimination and illegal pay practices and, ultimately, prevent pay discrimination in the first place. I am afraid—I regret to say this to the noble Baroness—that I do not believe that this Bill will achieve that aim.

My Lords, I declare an interest as the deputy chair of the Equality and Human Rights Commission, a body which is closely involved with the Government Equalities Office in discussions on the forthcoming equality Bill. I thank the noble Baroness, Lady Morris of Bolton, for introducing this Second Reading debate. It is a good opportunity for those of us in the Chamber to raise issues about which we are concerned. Sometimes, those of us who are involved in this day-to-day begin to wonder if anybody else is particularly interested. It is a fine opportunity, which I particularly welcome.

The proposed Bill is like a curate’s egg; it is good in parts, but some parts may be either unnecessary or lead to what we might describe as unintended consequences. The first of those is the reasonableness test. I dread to think how many hours have been spent over many years by many lawyers discussing the meaning of “reasonable”. Many fine houses have probably been built and bought on the income from such discussions. If we introduce another test into this part of the legislation, it will not make life easier and may well make life more difficult. We would not, I think, want to widen the circumstances under which an employer would be able to find a material-factor defence. In any case, this all has to comply with European legislation. All in all, we may find ourselves in more difficulty, rather than a better place, by agreeing to that part of Bill.

On flexible working, it is interesting that the British Chambers of Commerce is anxious about this proposal. It conducted a survey in 2007, in which 89 per cent of those companies surveyed said that they provide some kind of flexibility. I spent yesterday evening in the lovely area of Tunbridge Wells, addressing a range of employers about the likely impact on women’s employment of the current recession. It was interesting that these employers, mostly small and medium-sized enterprises, were very much in favour of flexibility. We have all discovered that flexibility suits many people. We could not possibly go back to the previous situation, before these various terms and opportunities for employment were available.

The Government’s proposals for 16 year-olds are probably sensible and appropriate. I left school aged 15. At 15 I was taking the bus and Underground from Surrey into central London to work and home again in the evening. For parents to be able to organise their work around their young people, up to the age of 16, is a move far enough.

On flexibility, I would also say that all who have the opportunity should encourage employers and trade union negotiators to try to ensure that flexibility is available to everybody. In many companies that already happens, and in many companies flexibility that is available only to parents is resented by some. The Equal Opportunities Commission, before it closed in October 2007, received its largest percentage of requests for information on the right to flexibility from men who did not want to commute on the most crowded trains. Many people would like to work in different ways for different reasons. We should all try to bear that in mind.

I turn now to the question of pay audits, which is probably the nub of this Bill. I am not against the proposals, and I do not think that the Equality and Human Rights Commission would be against them. We would only say that they are unlikely to make much difference. There are very few equal pay cases which succeed at tribunal. Many are settled before reaching court; many more are lost. I will come to that in a moment, when talking about the Equal Pay Act itself. The much bigger problem that we need to look at is not whether an extension of the legislation or a new piece of legislation will help. We need to look at the real reasons for the gender pay gap and what role is currently played by the Equal Pay Act.

On the gender pay gap, the Women and Work Commission report has already been mentioned by my noble friend Lady Gould. I chaired that commission between 2004 and 2006. We discovered that there were three major reasons for the gender, pay and opportunities gap. First, there are the educational choices made by girls and a lack of quality guidance for girls on what those educational choices will lead them to in the world of work. Secondly, there is occupational segregation, both in workplaces and across the labour market. Thirdly, there is the poor quality of part-time employment. There is an enormous lack of good-quality part-time employment available. One of the pay gap statistics which is most telling is the gap between women who work part-time and women who work full-time, which is currently around 33 per cent. That tells you something about the nature of available part-time employment.

We need social policy programmes to improve these things and we need flexibility, as has already been mentioned. I am grateful to the Government for agreeing to extend the right to request. I am pleased that in recent years our Government have extended and improved rights to maternity and paternity leave and I appreciate the efforts to make childcare more available. The cost of childcare is still a major problem and one of the big reasons why many women turn to part-time, local employment. The nature of their skills does not allow them to earn sufficient money to be able to work full time and pay childcare costs.

We also need what I call second-chance education. Much more effort needs to be put into programmes to upskill and retrain those women who have gone from doing what we might term decent-quality jobs to working in jobs much below their capabilities. My noble friend Lady Gould mentioned the loss of earning power of the women who go from decent jobs to lower-skilled and lower-paid jobs. The Women and Work Commission has estimated the cost of that to the Exchequer to be between £15 billion and £23 billion a year. We made those arguments when the Women and Work Commission produced its report. In the following Budget, in March 2006, the then Chancellor of the Exchequer, Gordon Brown, allocated £40 million to be spent on specific retraining and upskilling programmes for women. That money has been used effectively and those programmes are being continued.

The Equal Pay Act, to use the vernacular, is a busted flush; it does not work. Anyone involved in negotiations or working within the legal area will say that we need to start again. It is almost 40 years since the Act was introduced and during that time we have had a complete change of pattern within the labour market: local authorities have contracted-out services, most of which are sex segregated; the Act does not allow women to compare themselves with men in a different employment; central government departments have been divided into agencies; and people employed in those separate agencies are not deemed by the courts to have a single source of employer. The way in which labour is organised these days means that the legislation just does not match what is required. We need a root-and-branch change to current legislation.

I and the Equality and Human Rights Commission welcome the opportunity brought about by the equality Bill. We welcome many of the proposals, particularly the banning of secrecy clauses and the introduction of positive action. I end by thanking the noble Baroness, Lady Morris, for introducing the Bill. It brings the issue onto the agenda in a very necessary, helpful and welcome way.

My Lords, I applaud the personal commitment of the noble Baroness, Lady Morris of Bolton, to the goals of equal pay and flexible working. All of us here share those goals and I welcome the chance to join in the debate.

However, I have some concerns about the specific contents of parts of the Private Member’s Bill and about the overall approach. In recent years, we have made great strides on this agenda, but it is important to understand that that has been the result of combining a clear commitment to the goals of equality and fairness at work and working to build a consensus wherever possible for each and every policy change. It is tempting, and in some ways easier, to strike out with a seemingly bold gesture and even to put it into legislation, but without broad-based support, it may not deliver the real change in practice and outcomes being sought. Legislation is only part of the process.

A range of matters interlock the issues affecting women's pay and their ability to stay in work after the birth of children. There is no easy answer. Frankly, if there were, we would have tried it by now. As my noble friend Lady Prosser has outlined, the reality for women at work is very complex, starting, of course, with low pay. The effect of the national minimum wage was much more marked for women than for men and is probably the most crucial factor affecting women in work. It was introduced in a detailed and consensual way, save for the Conservatives opposing the idea, although I recognise and welcome their change of view. It pulled in support from employers, unions and many other groups in the Low Pay Commission. It was a detailed and long piece of work.

The effect of the minimum wage, together with working family tax credits and childcare assistance, has made it financially possibly and sensible for many women to work, whereas previously they would have been better off on benefits and so denied the role in the workplace which they wanted. Then there were fair rights for part-time workers, introduced in 2000 after long consultation on the practicalities of the changes for employers in all sectors. The majority of those benefiting from those new rights are women.

The right to four weeks’ paid holiday was particularly important for women, who were often denied that until it became a legal right, and the more recent increase to 4.8 weeks has primarily affected low-paid women who were, in effect, being cheated by having bank holidays included in their four weeks. Again, one could argue that it was introduced more slowly than many would have wished, for understandable reasons—of course, people want speedy progress—but that legislation and the way it was done has led to a manageable change for employers and real progress for many women who are in part-time, low-paid jobs.

The extension of maternity leave and pay and the extension of paternity rights have contributed to a change in attitudes, as well as a change in reality, to the needs of parents of young children and to the well-being of children. Each step has demanded huge negotiation and persuasion.

I turn to an issue in the Private Member’s Bill, the introduction of the right to request flexible working. That was developed through the Work and Parents Taskforce which painstakingly, and sometimes painfully, pulled together those with different views to produce a workable outcome. It agreed that the right would extend to parents with children up to the age of six and disabled children up to the age of 14. Of course, many people then and now wanted a stronger right and, of course, many employers did not want any change at all. I remember very clearly, as I am sure many noble Lords do, that when the Bill was introduced in 2003, some said it would achieve absolutely nothing. It was then extended to carers of adults. In all, that change has introduced the right to request flexible working to over 6 million parents. Many parents have exercised that right and crucially it has assisted to bring about a change in attitude in many companies. Nearly 80 per cent of women entitled to request flexibility have done so. So a measure which was both ridiculed and opposed has been a dramatic step forward.

I turn to the specifics in the Bill. First, on the proposal to remove the upper age limit of a child for the right to request flexible working, it sounds great to go even faster and further, but the current age limit is six. The Work and Parents Taskforce, which produced the original policy of age six, argued that legislation should be linked to a significant point in a child's schooling. The recent Walsh review also thought that approach was sensible, so the next natural break after six would be 12 to cover the transition to secondary school, a major event in all children's lives, or 16 to cover GCSE year. The review recommended 16 but rejected 18. The Government have announced that they are going for the bolder move of 16. I probably would have gone for 12 and then built up support for 16, although I understand that the legal position for 12 year-olds is somewhat ambiguous. The NSPCC recommends not leaving children under 13 alone except for a short time. However, crucially the Walsh proposal has been fully consulted on, and employers' organisations think its rollout is challenging but manageable. Perhaps I am pushed towards a more measured rollout because, over the years, I have spent too many hours in too many long and detailed negotiations. If we have broad-based agreement for age 16, we should move forward on that. The CBI points out that over 90 per cent of requests are currently met, but over 20 per cent of employers feel that there has been a negative effect on productivity. Many employers are largely positive, but there is a particular challenge for small firms. The CBI opposes the extension to 18 as being likely to have a negative effect on business, but accepts and will work with the recommendations of the Walsh report.

On equal pay, I understand the temptation to seize a simple-sounding solution. We feel somewhat desperate at times about making progress in this area, but I question the content of the Bill on it. There is a danger that the addition of the test of reasonableness could make the law unnecessarily complicated. After all, an employer already must point to a genuine, significant, material factor to explain any difference in pay for a man and a woman doing the same work or work of an equal value. I am also somewhat concerned about the proposal to have mandatory equal pay audits where a breach of equal pay is found by a court or tribunal. It is a blunt instrument. Employment tribunals can find a range of issues that need addressing, and equal pay audits, which can be expensive, time-consuming and burdensome, often will not be an answer. The threat is that that may damage the credibility of tribunals. I am uneasy about pay audits being used in this punitive manner, although we have to look at other ways to make progress on equal pay, and I recognise that at times they have been found helpful. I strongly believe that secrecy clauses must be banned in the workplace, and I hope that will be addressed properly in the Government’s forthcoming equality legislation.

Finally, I confess that I am a bit puzzled about why the Bill is being introduced now. Most of the measures I outlined earlier were opposed by the Opposition. I shall not bore the House with the many prize quotes from the Opposition in another place outlining why most of these policies were crazy and/or dangerous. Indeed, David Cameron voted against the introduction of the right to request flexible working for parents with children up to the age of six, so this is something of a Damascene conversion on his part. If there is a genuine change of heart, that is to be welcomed, but rather than propose measures in a way that, frankly, could be described as gestures, why not approach this agenda in a genuinely collaborative way? All the crucial measures introduced since 1997 have been done by forging sensible alliances to introduce practical, progressive moves forward and, especially, changes in culture. I strongly recommend this approach to the noble Baroness, who I know is seeking the changes in the workplace that we all want.

My Lords, we are all grateful to the noble Baroness, Lady Morris of Bolton, for introducing the Bill and we share her aims. I am sorry to say that there are some fundamental flaws in the Bill, which I shall explain later, but we hope it will act as a spur to a new, reforming equality Bill to be introduced by the Government. The debate has been greatly enriched by well informed, powerful contributions by Members of the House of both sexes with great experience, to whom I pay tribute. If I do not refer to all their speeches, it is simply because of the time factor.

We all agree that the principle of equal pay between men and women must at last be achieved in this country to avoid women being exploited as a source of cheap labour. We need to use the skill and talent of the entire workforce, including women and men who combine motherhood or fatherhood and childrearing with paid work. Those are the values underpinning the Bill. Barbara Castle’s Equal Pay Act was unsatisfactory from its birth. As the noble Baroness, Lady Prosser, said, it was a busted flush, and there is a need for root-and-branch reform. When I helped Roy Jenkins to create the Sex Discrimination Act 1975, we were not allowed to strengthen the Equal Pay Act because a deal had been done between employers and trade unions by which Harold Wilson’s Government regarded themselves bound.

Although the noble Baroness, Lady Thatcher, made her maiden speech on equal pay, her Government did nothing at all until they were obliged by the European Court of Justice to provide for equal pay for work of equal value. The regulations that were introduced in the Commons by a drunken Alan Clark were strongly criticised by the Equal Opportunities Commission, on my legal advice, as being incompatible with European Community law. The noble Baroness, Lady Howe, will remember that when the regulations were debated in this House, the noble Lord, Lord McCarthy, remarkably moved an amendment declaring,

“that this House believes that the regulations do not adequately reflect the 1982 decision of the European Court of Justice and Article 1 of the EEC Equal Pay Directive of 1975”.—[Official Report, 5/12/83; col. 886.]

Apart from the Conservative Minister—I say Conservative so that we will remember who was on which side—no one spoke in support of the regulations, and the amendment was carried against the Government by four votes.

Lord Denning, who decided key cases on equal pay in the Court of Appeal, referred to Barbara Castle’s Act as “deplorable” because:

“Its tortuosity and complexity is beyond compare”.—[Official Report, 5/12/83; col. 901.]

He pointed out that the regulations were not clear, intelligible or capable of being understood by ordinary people and ordinary tribunals. Since then, no Government have introduced legislation that would provide effective remedies for sex discrimination in pay.

I was instructed by the noble Baroness, Lady Kingsmill, and others in the speech therapists’ case. It took 11 years for a group of speech therapists to compare their work and pay with those of hospital pharmacists and clinical psychologists. By the time the case was finally decided, all the documents had been lost, the women and men concerned had died, retired or changed their work, and the remedies that were awarded were of no practical value. The poor old union had had to accumulate thousands of individual claim forms because the procedure is ludicrous and it is not possible to make a collective claim on behalf of a group of people. It was indeed a busted flush.

Women still earn significantly less than men; they face substantial penalties for doing part-time work, for taking time out of the labour market and for reducing their hours to care for relatives. As the noble Baroness, Lady Morris, noted, men are paid 17.1 per cent more than women for full-time work. The pay gap is even wider in the private sector, at 21.7 per cent. The disparity in part-time wages is 36.6 per cent and, to answer the question asked by the noble Baroness, Lady Howe, Britain has been placed 81st in the world on progress on equal pay for equal work.

Women's educational attainment is higher than that of men, but that success is not properly reflected in their pay. We are squandering women's skills and talents, resulting in the inefficient use of human capital at a time of severe economic crisis. As the noble Baroness, Lady Morris, pointed out, the gender pay gap actually increased last year.

I have great admiration for the Minister. Indeed, I have wanted for some time to talk to her about all this. I hope that she does not share the lukewarm approach to reform of equal pay taken by some of her colleagues and advisers. The Government have not yet shown signs of recognising that the Equality Bill must replace the 1970 Act with equal pay provisions that work in practice. So far, there has been a minimalist approach; they wrongly believe that that is in the interests of business enterprise. That is profoundly mistaken. Equal treatment without discrimination furthers the aims of business enterprise by tackling unfairness and inefficiency in the marketplace.

Clause 1 of the Bill would amend the employer’s defence under Section 1(3) of the Equal Pay Act by making it a defence to an equal pay claim that a pay difference between a man and a woman is,

“objectively justified as reasonable”.

Under Section 1(3), read in isolation from European law, where employers seek to explain the difference in pay between a man and a woman who are doing like work, equivalent work or work of equal value, they must show that the difference in pay is genuinely due to a factor that is not the difference of sex and that the factor is material—that is, significant and relevant. An employer cannot explain the difference by relying on a factor that is directly discriminatory, in that women are treated less favourably than men. Under the present law, employers are not permitted to argue that a directly discriminatory factor is objectively justified.

If the difference in pay is indirectly discriminatory, because it has an adverse disparate impact on workers of one sex, it cannot be relied on by the employer unless it is objectively justified. That means under European law that it must be shown to be appropriate and necessary in accordance with the well known European principle of proportionality. In other words, the employer must show, because of European law, that the means employed are proportionate to the employer's aim.

Clause 1(2) is fundamentally flawed for at least three main reasons. If the Minister disagrees with me, I hope that she will explain why. First, it would in some circumstances place an increased burden on employers, because they would be required to satisfy the test of reasonableness even in relation to factors that are not discriminatory. Ironically, that would add to the employer's burden quite unnecessarily. Secondly, it suggests that factors that are directly discriminatory would become open to justification as being reasonable, yet it is quite clear that under EC directives and as a fundamental tenet of our domestic discrimination law, you cannot justify direct discrimination. Thirdly, and perhaps most importantly, it would substitute a weaker test of “reasonableness” for that of objective justification in cases of indirect discrimination. As the noble Baroness, Lady Prosser, and others have said, that would clearly be incompatible with Article 141 of the treaty and the equal pay directive.

In other words, Clause 1(2) would not simplify but undermine the effective enjoyment of equal pay for equal work. Therefore, I agree with the noble Baroness, Lady Gould of Potternewton.

Clause 1(3) proposes that, where employers are found to have breached the Equal Pay Act, they should be required to conduct and publish a pay audit. I agree with the noble Baroness, Lady Prosser, that that would not be of any great practical value. The case for mandatory equal pay audits recommended in the Hepple report and included in my Equality Bill has, I hope, been made out, provided that it is applied in a flexible and sensible way and only to large and medium-sized employers, and provided, as the noble Baroness, Lady Gould—I think—said, there are transitional measures to allow employers and the trade unions in good faith to move towards equal pay, where the audit discloses problems that need to be dealt with in an orderly way.

The current law’s reliance on individuals bringing equal pay claims to bring about widespread equal pay has not succeeded in achieving its objective, as several noble Lords have pointed out. Not only does the system fail to bring about equal pay, it clogs up the tribunal system with hundreds, perhaps thousands, of women lodging complaints about the same employer and the same set of facts, as in the speech therapists’ case. Pay systems are just that: they are systemic. Only a comprehensive pay review based on an audit of the entire pay system will bring about the necessary change.

I remember, in one of the early equal pay cases in the House of Lords, one of the Law Lords saying to employers that that case should warn employers to look at their pay systems properly, identify where there are clusters of women in particular parts of the sector and make sure that they eliminate direct and indirect discrimination in pay. That has not happened and, because of that, local government employers, for example, have accumulated vast liabilities for damages, which now put them at serious risk of not being able to do their other jobs properly. The use of the audit is so that the employer knows what is happening and can take remedial steps rather than accumulating vast liabilities. It also keeps the lawyers away, one hopes.

The voluntary approach to equal pay reviews has had little impact during the 38 years since the Equal Pay Act was enacted. A survey published last year by the Equality and Human Rights Commission found that only 23 per cent of private sector organisations had completed or were planning an equal pay review, compared with 43 per cent in the public sector. Successful equal pay claims are notoriously difficult to bring and require employer and employee to go through a tortuous and lengthy procedure. Requiring only those employers who have lost in an employment tribunal to undertake an equal pay audit is punitive and is not an effective means of bringing about the necessary change, as several noble Lords have pointed out.

Press reports suggest that the Government are now proposing to require public sector employers to publish the gender pay gap within their organisations; that is, to compare the average pay of men and the average pay of women. I hope that that is incorrect—it seems to me to be dotty; it would be a crude measure and of little practical value to address the underlying problems of the pay gap. In the first place, it would not reveal the causes of pay discrepancies between comparable groups of male and female workers. With access only to those crude figures, employees would remain in the dark about whether the pay gap is caused by undervaluing female-dominated jobs, a glass ceiling that prevents career progression for women or overt discrimination. Moreover, any such measure that excluded large and medium-sized firms in the private sector, in which the vast majority of people are employed, would not be a serious attempt to address the pay gap. I hope that that rumour is incorrect.

Like all other noble Lords who have spoken, including the right reverend Prelate the Bishop of Southwark, who made a powerful speech, we strongly support the principle of flexible working for the reasons expressed by, in particular, the noble Baroness, Lady Morgan of Huyton. She made me think about whether we need to consider age limits much more carefully. I therefore cannot say that we give unequivocal support to this proposal, although we obviously support the principle of flexible pay.

We look forward to learning from the Minister the Government’s views of the Bill and whether she is authorised to tell us what the Government think is the best way forward to secure equal pay and eliminate sex discrimination in the workplace. The noble Baroness, Lady Vadera, has been unfairly attacked for observing green shoots in the economy; I hope that she will be able to share her vision of springtime in Whitehall in this important area.

My Lords, I begin by declaring the interests shown in the Register.

I rise enthusiastically to support this Bill. I am delighted to do so from the opposition Front Bench. My colleagues and I want to see such legislation on the statute book as soon as possible. I congratulate my noble friend on introducing this measure, which seeks to strengthen existing equal pay legislation—to give it more teeth in the face of continuing unfair treatment. My noble friend has a remarkably impressive record of taking up the issues of equal pay for working women as a Member of this House, in her political career outside this place and as a working woman and mother.

I was very pleased when my friend and colleague, Theresa May, launched her campaign for equal pay for women. We have had a very important debate. Many constructive points have been raised and must now be carefully considered. I strongly support the bid to obtain cross-party support for such a measure. I was delighted to hear from the noble Lord, Lord Morris of Handsworth, a rather impressive social and economic case for supporting the Bill. I reflected that when I was invited to the TUC summer reception, several of our colleagues in the trade union movement were getting very concerned about the legal side to this and the way in which it was becoming a bit of a paradise for lawyers. But we are now reassured by the noble Lord, Lord Lester of Herne Hill, that we are going to keep lawyers away. We look forward to his assistance in ensuring that.

There were a number of concerns about the detailed provisions of the Bill. Three successive speakers, the noble Baronesses, Lady Gould, Lady Prosser and Lady Morgan of Huyton, raised some important points. Although I disagree with some of the perhaps political elements of what they said, we should carefully reflect on a number of those concerns about detailed provisions. Perhaps I may say that the noble Lord, Lord Lester of Herne Hill, painted a rather partisan picture of the past. However, it is important that I remind the House that when I was Secretary of State for employment, I said:

“Discrimination against women is not only inefficient, it is clearly wrong”.—[Official Report, Commons, 10/3/94; col. 434.]

I believe that so strongly. Equality of opportunity is a vital principle, so is equality of treatment and remuneration. Whether one terms it as equality, diversity or just fair play, women must be given every opportunity to fulfil their potential. The points raised by the noble Baronesses, Lady Prosser and Lady Gould, about upskilling and ensuring that our education and training process gives an equal opportunity to women were so important.

The words “fair play” are the English translation of the title of the “chwarae teg” programme I introduced when I was Secretary of State for Wales, in combination—I reflect on the presence of the noble Baroness, Lady Howe of Idlicote—with Opportunity 2000 and the Equal Opportunities Commission. I strongly agree, as I agreed then with the noble Baroness, that progress seems to be appallingly slow. We have to do something about that.

Fifteen years ago, I was able to point to both real and relative growth in the hourly rate for the female working population. Over the previous 15 years, it had risen by 55.9 per cent, as compared with 40.4 per cent for the male population. But we have seen too little progress in the right direction since. As several noble Lords reminded us, men still get paid more than 17 per cent more than women, meaning that over an average working life a woman will lose or forgo a massive £300,000. This pay gap exists not only in low-paid, part-time jobs: women working in full-time jobs also earn less than men, as was also pointed out.

I was concerned when I read that, recently, Catherine Rake, director of the Fawcett Society, the women’s campaign group, said:

“After years of painfully slow progress in closing the pay gap, we have now actually gone into reverse gear, with the pay gap widening for women working full and part-time”.

These are worrying facts and we have to reflect on how we will overcome them. It is important that we tackle the pay gap not only by passing a law, but also by raising awareness, particularly among young people.

Some important points have been made about flexible working.

My Lords, perhaps I may make clear that I am not politically partisan on this issue and that I fully recognise that previous Conservative Governments have been as derelict as the present Labour Government in not tackling this issue. In the past, there have been green shoots; for example, in Northern Ireland a progressive law was introduced in Margaret Thatcher’s time and the noble Lord’s record is also notable. I said nothing to suggest that the Liberal Democrats are superior on any of these questions. As the appointment in 1976 of the noble Baronesses, Lady Howe and Lady Lockwood, as chair and deputy-chair of the EOC indicated, it is vital that we are cross-party on these issues. I hope that that is clear.

My Lords, I agree with the last words of the noble Lord and I hope that the whole debate has reflected a cross-party and non-partisan approach. However, I felt that I had to put the record straight, and indeed I welcome the opportunity to do so.

I note the comments of the right reverend Prelate the Bishop of Southwark on flexible working, which were absolutely on the ball. Flexible working can make a huge difference to family well-being. As the noble Baroness, Lady Gould of Potternewton, reminded us, individual performance improves when there is flexibility in the working environment. However, I fear that many UK businesses will struggle to survive the next 12 to 18 difficult months. There will be other occasions on which we can discuss why that has happened and what needs to happen now. I have listened carefully to the concerns of the CBI and British Chambers of Commerce and was pleased to note in the CBI’s briefing on the Bill a reminder of its view that discrimination is inexcusable. Although both organisations have concerns about the detailed provisions, they support flexible working practices and recognise that they can be particularly useful to businesses during a downturn.

As we proceed to the Committee stage, we must reflect on how this legislation can be improved. However, as businesses struggle to survive, they will greatly enhance their chances of success if they truly embrace fairness, allowing each and every individual to realise his or her full potential and then receiving full and fair recompense in return. I support the Bill.

My Lords, I join other noble Lords in thanking the noble Baroness, Lady Morris, for giving us the opportunity to discuss the issues addressed in this Bill, and for her passion for and the contribution she makes to this area. From the Government’s perspective, we believe that the House ought to consider some of the points in the Bill. It proposes two changes to the Equal Pay Act 1970, but as other noble Lords have remarked, these proposals come before us just as the Government are preparing their own equality Bill to bring together all existing equality legislation, including equal pay. That Bill was promised in our manifesto and included in the Queen’s Speech as a sign of our commitment to these issues. We will be bringing it forward as soon as practicable. We are of course grateful to the noble Lord, Lord Lester, for his work on our Bill and I can assure the noble Lord of our enthusiasm for equal pay not just as an issue of social justice, but in terms of economic productivity.

My Lords, in welcoming the noble Baroness’s reply to this debate, it would help if she were able to offer a little more clarity on when the equality Bill is to be introduced.

My Lords, we believe that the Bill will be published in the spring. When further details become available, I shall write to the noble Lord. We are carefully considering how the law on equal pay will be framed in the new legislation. This will include the grounds on which differences in pay for equal work can be justified, a subject also addressed by the noble Baroness’s Bill. Under existing law, for a difference in pay between a man and a woman doing the same work or work of equal value to be justifiable, the employer must be able to point to a genuine material factor that is unrelated to gender. As has been said, London weighting is such a material factor, and must be both significant and related to the difference between the contractual terms of the female and the male comparator. The employer therefore has to show that this is the reason for the disparity in pay. I therefore wholeheartedly agree with the three reasons sharply articulated by the noble Lord, Lord Lester, as to why adding a reasonableness element to this test would not be helpful. It would potentially require an employer to be ready objectively to justify as reasonable any reason for a difference in pay between a man and a woman doing equal work even where the reason for it is not discriminatory, whereas at the moment it is necessary to do so only where the fact in question is tainted by indirect discrimination. This could increase the number of potential claims and the burdens on business, and could lead to extra, unnecessary complexity without adding to the protection provided to women.

In our Bill, we intend to clarify the way in which the current law works. I cannot better the compelling arguments made by my noble friends Lady Gould and Lady Prosser, based on their lifetime experience in this area, about the unintended consequences in relation to this and the second element in the Bill, which requires that when there is a breach of an equal pay requirement an employment tribunal should be required to order an equal pay audit. Under this proposal employers would be required to carry out an equal pay audit even if they had recently undertaken one or if the case did not have implications for the majority of employees in the organisation. The impact of this proposal would therefore be disproportionate in most cases.

A study carried out for the Equal Opportunities Commission in 2005 found that a typical audit in the private sector cost the equivalent of three to six months of a full-time member of staff time. Nor would it have a significant impact on the gender pay gap. It would have applied to only 125 equal pay cases in 2006-07, the latest year for which figures are available. This equates to only 2 per cent of the total number of equal pay cases in that period.

In preparing our equality Bill, the Government have carefully considered the case for all employers to carry out mandatory equal pay audits. We have concluded that while equal pay audits can be useful as a way of exploring unfair pay practices in some circumstances, they can also be expensive, time-consuming and burdensome. The purpose of the Government’s equality Bill is therefore focused on preventing discrimination and closing the gender pay gap, not just closing the stable door after the horse has bolted. I agree with the insightful analysis of my noble friend Lady Morgan that not all elements of this problem can be legislated for.

The Government’s equality Bill will therefore increase transparency by banning secrecy clauses that prevent people discussing their own pay; by ensuring that public bodies report on equality issues, which will enable targeted and effective action; and by extending the scope for positive action, which will give employers a chance to make their workforce more diverse when choosing between two equally suitable candidates.

Our Bill will strengthen the law in a way that will have a real impact on the gender pay gap without imposing unnecessary burdens on business. We therefore look forward to the support for the Bill of the noble Lord, Lord Hunt, in the light of the comments he has made.

My Lords, will the Minister reflect afterwards on the value of equal pay audits of a non-heavy and non-bureaucratic kind as a preventive measure in order that employers understand the problems they have and take remedial measures in advance? She has presented it so far on the basis of what the Opposition have put forward, but there is a preventive way of doing it which is much better than measures leading to law suits. Will she reflect on that?

My Lords, noble Lords will be aware that discussions are ongoing. I am sure that the noble Lord will not only be consulted but will have the chance to debate this issue during the course of the Bill.

We are proud of our record on family-friendly policies and the flexible working policy, which is founded on careful evaluation and thorough consultation. It balances the needs of employees and employers; it contains the right to request, not the right to have, but with the employer having the obligation to consider all requests seriously. Evidence suggests that they do so: 91 per cent of all requests are accepted, and 95 per cent of workplaces say that at least one flexible-working arrangement is available to employees. Some 56 per cent of employees say they have worked flexibly in the past 12 months.

Businesses recognise the benefits that flexible working can bring. The Institute of Directors said in its 2008 report that all the measured impacts of flexible working were deemed positive, including productivity, profitability, customer service, recruitment, retention, absenteeism, overhead costs, morale, teamworking and knowledge sharing. Working with business on our flexible working policy has underpinned our success so far, and noble Lords have commented on the CBI’s position in that regard.

The noble Baroness asked about the number of fathers requesting flexible working. I am pleased to say that it has broadly doubled. The figures are available and we would be happy to provide them.

We will continue to work closely with employers as we embark on this next phase. As my noble friend Lady Morgan has explained, we had a review last year by Imelda Walsh, the HR director of Tesco, who considered evidence from a wide range of sources including interviews with business organisations, unions and family groups.

My Lords, I am sorry to interrupt but, just as a matter of record, Imelda Walsh is the HR director of Sainsbury’s.

My Lords, I apologise for getting my retailers mixed up. I am glad to be corrected on that point because I am sure she would not have been happy.

The review was well received after full consultation and it concluded that extending the right to request to parents of children up to the age of 16 would allow them to support their children through their GCSEs. It stressed the growing importance of exams and highlighted that some parents will want to work more flexibly, on either a permanent or a temporary basis, to help their children prepare for them.

Imelda Walsh rejected a smaller extension to the age of 12 because of the importance of enabling parents to support their children through their early teenage years. She also rejected a wider increase to 18; representations to the review suggested that parental need for flexible working at this time is weaker. She recognised that young adults aged 16 to 18 can be expected to take greater personal responsibility than younger teenagers, whether in education, training or a first job.

She highlighted that the increase to 16 would be sizeable and the single biggest increase in the number of employees entitled to the right to request, from over 6 million now to over 10 million from April. Furthermore, official data show that the labour outcomes for mothers aged 16 and under in particular can be compromised by trying to balance their work/life commitments. Female employment rates rise steadily by age of youngest child. By 15 they are still only around 50 per cent, but when the youngest child reaches 17 almost 70 per cent of mothers are at work. It is therefore right that we focus on parents of children up to the age of 16 where there is a real need to be met.

I recognise that some wish us to go further than that amount, but I hope the noble Baroness will recognise the representations that have been made from all sides. There are also others who would prefer us to delay. The Government have carefully considered all the arguments but continue to believe that the extension to 16 balances parental need with business requirements and is a fair outcome for both parties.

We have recently consulted on how to implement the extension and our response is due to be published shortly. The extension to flexible working will be introduced from April 2009, and an extra 4.5 million parents in Britain will gain new rights to request flexible working. This is a significant achievement and, we believe, the right way forward. The noble Baroness, Lady Morris, will no doubt recognise that there are some serious considerations of elements of her Bill but that we have to take a balanced view.

We look forward to building cross-party support for our equality Bill. I am very proud of this Government’s achievements. We are a party with three times as many female MPs as all the rest put together. We have introduced longer maternity leave, paid paternity leave, the right to flexible working and other measures, including the national minimum wage and tax credits, that make a huge difference to the lives of millions of women. Those measures have been opposed by the Opposition.

I assure the House that we will show the report of the debate to all the relevant Ministers across government. I shall also ensure that relevant officials follow the progress of the Bill through the House.

My Lords, I am most grateful to everybody for taking part. It has been a wonderful debate and I look forward to reading all your Lordships’ contributions in Hansard, because they merit it. I thank the Minister for her comments. I, too, applaud all that the Government have done for women and for families—I think that we can now take that as a given. I thank her also for alerting us to the fact that the equality Bill will be published in the spring. We had been led to believe that it would not be before the summer, so it is welcome that we will see it sooner rather than later. I look forward to working alongside my noble friend Lady Warsi on it.

The Minister went into great detail, for which I am most grateful. As this is a complex area, as many noble Lords have said, I look forward to reading exactly what she said. Although we may not agree on the detail of my Bill, I found myself agreeing with much of what the Minister said.

I thank my noble friend Lord Hunt of Wirral for his fulsome support for the Bill. I am grateful to him for pointing out that equal pay and fairness have long been part of the lexicon of the Conservative Party, even though there seems to be collective amnesia in some areas. However, I agree with the noble Lord, Lord Lester, that these issues should not be partisan.

I thank the noble Lord, Lord Lester, for his support for the aims of the Bill and take on board his comments about it being fundamentally flawed—although I am not quite sure how he accommodates both those sentiments so well. I am not a lawyer; I am simply married to one, although he had nothing whatever to do with the Bill—being a judge, he has to be very much above party politics. I look forward to the assistance of the noble Lord, Lord Lester, in later stages, especially with regard to light-touch audits. That is an interesting area that we could explore.

On reasonableness, I can say only that various lawyers have helped on the drafting, which I am told is used in countless legal situations and arguments, including the Unfair Contract Terms Act 1977 and other parts of employment law. I would be most grateful if the noble Lord, Lord Lester, did not intervene on those points, because I would not have an answer to give him, but I am told that reasonableness is expected there.

I take on board the point made by the noble Lord, Lord Morris of Handsworth, however, that the test of reasonableness could be a lawyers’ paradise, although I do not think it would be half as much a legal paradise as the proposals to place a burden on employers regarding social mobility will be. My proposals will encourage future parents, because they will enable parents to be in work that they can afford to do.

When the noble Lord, Lord Morris, said that he agreed with everything, I thought of how, in these difficult times, people sometimes seem to be on different sides of the argument. We had a wonderful supper together the other night, when as a good Tory I bemoaned the fact that I banked with the RBS, which is now almost entirely owned by the Government, and that my mortgage is with the Britannia, which has now merged with the Co-operative society. The noble Lord, Lord Morris, said that for all his life he had been campaigning for a mixed economy, but he never thought that it would be the banks that were legalised and the Post Office that was privatised. It just goes to show that, in these times, arguments really are all over the place.

I congratulate the noble Baroness, Lady Prosser, on the tremendous work that she undertook with the Women and Work Commission, culminating in the excellent report, Shaping a Fairer Future. It is a brilliant document and I recommend it to anyone who has not read it. I agree with her that flexibility is welcomed by many employers; small companies are the original flexible employers. Often they are ahead of legislation. My parents had a small cake shop in Farnworth where they employed eight people and, if they had not operated flexible working practices, they simply would not have had a business. I agree, too, on enhancing the skills of women. I shall read again with care her views on the Equal Pay Act possibly needing to be ripped up and started again.

The noble Baroness, Lady Gould of Potternewton, had reservations about the details of the Bill but no reservations regarding the principles, and I thank her for that. Along with the noble Baronesses, Lady Prosser and Lady Morgan of Huyton, she mentioned the Walsh review, which we will welcome as a step in the right direction. Anyone with a child of 17 or 18 knows that they have their own needs. In today’s world, strengthening and supporting families should be one of our key concerns. I remind your Lordships that the Government are introducing a duty on young people of 17 or 18 to stay in education or training. They are still legally regarded as children until the age of 18.

I agree with the noble Baroness, Lady Morgan of Huyton, that legislation is only part of the process and that the issue of women at work is complex, but at least this Bill is an attempt to address it. The majority of women’s groups that we spoke to thought that the way in the Bill was the best way forward. The noble Baroness had a catalogue of why maybe in the past we had not agreed with things—but we need to work on this in a collaborative way, which is exactly what I am trying to do. I rather liked the idea of a redhead from Bolton following in the footsteps of a redhead from Blackburn.

I am most grateful to the noble Baroness, Lady Howe of Idlicote, with her vast experience in this area, who said that the Bill may not be perfect—and I am getting that message loud and clear now—but it does try to address the issues. It has found genuine support in its aims around your Lordships' House. Again, I agree with her that women’s potential remains so underdeveloped.

I thank the right reverend Prelate the Bishop of Southwark for taking part and for mentioning the right reverend Prelate the Bishop of Nottingham and Southwell, with whom I have enjoyed debating the issue of flexible working on numerous occasions. The remarks of the right reverend Prelate about benefit families bring up one of my main concerns in this area.

The pay gap is a silent but far reaching problem. As the CBI said, discrimination is inexcusable. I leave noble Lords with a simple request—to think about the issues that I have raised here today and which I hope this Bill goes some way to addressing, beyond the confines of party allegiance. These are pressing concerns which affect countless women in the country. Rather than wait for a big government Bill to go through—although I look forward to it—with all the delays that Bills and false starts may entail, in this Bill we have an opportunity to make changes that will strengthen our families and promote fairness.