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Gender Pay Gap

Volume 777: debated on Tuesday 20 December 2016


Asked by

To ask Her Majesty’s Government, in the light of findings by the Fawcett Society that at the current rate of progress it will take over 60 years to close the gender pay gap, what steps they are taking to achieve pay parity more quickly.

My Lords, at 18.1% the gender pay gap is the lowest on record, but no gap is acceptable. Increasing transparency will accelerate progress. Delivering on our manifesto commitment, we recently laid regulations requiring large employers to publish their gender pay gap annually. The government-commissioned and independently led Hampton-Alexander review has set challenging targets to ensure that by 2020, 33% of senior leadership positions in the FTSE 100 and 33% of FTSE 350 board directors are women.

I am very grateful for that Answer. I am sure it is true to say that every Government over the last 40 years have sought to tackle this problem, and the gender pay gap regulations referred to by the Minister and published this month are no exception. The notes to the regulations specify that failure to comply with these regulations constitutes an unlawful act. What sanction do the Government have in mind for the EHRC to impose? Will it be a gentle slap on the wrist or should transgressors be hit where it hurts—in their pockets?

My Lords, we do not intend to create additional civil penalties at this time but we can review that if levels of compliance are not satisfactory. As the noble Baroness said, non-compliance will constitute an unlawful act and will fall within the Equality and Human Rights Commission’s existing enforcement powers under the Equality Act 2006. I am grateful to the noble Baroness for bringing up this question and I am pleased to say that the trajectory is heading in a very positive direction.

My Lords, I started working in 1970, when the Minister was just three years old. Of course, that was also the year of the Equal Pay Act. I would have been devastated had I discovered that, almost half a century later, I would be standing here still with an 18% pay gap. I ask the Minister to do two things. First, will she make sure that government investment is geared towards getting women into the highest-paid professions and industries, because, at the moment, women are mostly in low-paid industry? Secondly, could she possibly tell her Treasury colleagues that, through almost 90% of their tax and benefits changes relating to women, they are only adding insult to injury?

My Lords, the Government, starting with the previous Prime Minister, are most certainly committed to the very ends that the noble Baroness seeks. Not only are women contributing to tax, but they also bring the huge benefit of increasing GDP in this country.

My Lords, recent reports by Deloitte and the British Computer Society have underscored that where women are educated in STEM subjects and then pursue careers in that field, the gender pay gap is at its narrowest. Does the Minister agree that there are still huge cultural, social and other barriers that discourage many women from pursuing those opportunities and avenues? Would the Government be willing to put some resources behind trying to break down those barriers in an effective way, because leadership is surely required in this area?

My daughter has just graduated in a STEM subject and is now working with one of the big four accountancy firms. That firm is going to great lengths to improve the diversity of its workforce. Some companies are much better than others at encouraging diversity, but I look forward to the day when diversity is the norm and those who do not engage in this agenda stand out by their lack of doing so.

This is really a worldwide issue. Is the Minister aware that one of the strongest forces for promoting pay equality and gender equality generally is the Commonwealth organisation, although there are many countries in the Commonwealth that are backsliding? What plans are being made for co-ordinating Whitehall departments to prepare for the Women’s Forum in 2018 at the Commonwealth Heads of Government Meeting here in London, at which gender equality and pay will be a major feature?

That forum will be very beneficial in tackling this issue because, as my noble friend says, there are both good and bad practices across the Commonwealth. The actual detail of cross-government work I do not have at my fingertips, but I will be very happy to write to my noble friend on this.

I would be grateful if the Minister indicated what special measures the Government may be taking in the public sector, where they have both direct and indirect control, and whether they have any plans to deal with outsourced work, much of which is given to the private sector, where equal pay does not prevail.

I explained to the noble Baroness, Lady Burt, about the regulations we laid at the beginning of December, which we will roll out to include the public sector as well. The previous Government went to huge lengths to get equal representation on boards. Of course, our aspiration is for women to get to the highest levels of industry. Our aim is for women to represent 33% of FTSE 100 boards by the end of 2020.

My Lords, I commend the Government for their work in this regard. Does my noble friend the Minister accept that women’s representation on public quoted companies, while higher than in the past, is still less than in the political field? Can we learn from the examples of Sweden, Spain and other countries, where they have a higher executive as well as non-executive representation on public quoted companies?

My noble friend is right to point that out. Five years ago we came to this issue almost from a standing start: the representation of both women and BME people on boards was pitiful. We have a long way to go on BME representation, but in those five years we got from a very low figure to more than 26% of women on boards. However, we have further to go.

Does the Minister agree that it would be a useful discipline to impose quotas for the number of women on boards if further progress is not made? Do the current Prime Minister and Government agree that this would be a useful backstop?

I remember the previous Prime Minister saying this. One of his key strengths was trying to achieve things without having to legislate, and we succeeded on the issue of women on boards. The current Prime Minister very much supports the diversity of both BME people and women on boards, and the regulations we have laid underpin the strength of feeling on this subject.