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Gender Pay Gap

Volume 794: debated on Monday 26 November 2018

Question

Asked by

To ask Her Majesty’s Government what plans they have to require organisations to produce action plans to respond to their gender pay gap reports.

My Lords, I am delighted that over 10,000 employers reported gender pay gap data in the first year, but reporting is just the first step. We believe that the transparency created by reporting will motivate employers to take action. However, to close the gap we need wider cultural change, which cannot be imposed from above. That is why the Government are working with employers to tackle the drivers of the gap, and we have introduced a range of initiatives to support that work.

Well, sometimes I am a bit speechless over all this. It goes on year in, year out, and nothing really happens. I welcome the initiative to publicise the gender pay gap, of course, and I welcome the work that is being done to encourage more women on to public boards. However, the pay gap is actually at its most pronounced among slightly older women who have given up more productive or lucrative careers to have children, and who then cannot afford paid childcare and so move into part-time employment.

There are a number of tried and tested initiatives which have proved very helpful to this cohort of women, and which have been run in the past through the Government Equalities Office: for example, women-only skills programme initiatives to break down full-time jobs into part-time jobs. Do the Government have any intention of introducing any programmes to enable women to work to their capacity and at the same time help them to contribute more to business and the economy?

I am grateful to the noble Baroness for asking that follow-up question. I am slightly disappointed that she was speechless at my initial Answer—maybe she was speechless with joy. One of the things on which I was speaking to the Women’s Business Council this morning was precisely the cohort she talked about—older women who have perhaps left work for certain reasons and then gone back later—and how it can help. The Women’s Business Council is focused very much on the cohort of women from 50 to 64 in particular, on what support it can give, and on what the Government can support in this endeavour. So we are doing things around the gender pay gap from which that cohort in particular should benefit.

My Lords, I hear the Minister’s answer, but I think law can be a driver of culture. Does she agree in principle with the recommendations of the Commons committee on business that, as half of all employees are not included in the gender pay gap reporting requirements, all companies with 50 or more employees should be? I said when the requirement came in that what you do not measure, you cannot manage. Let us get SMEs measuring their pay gap so that they can at least start on the path to managing it.

I agree to a certain extent with the noble Baroness. It would be interesting to see some of the figures from SMEs. Over 300 have, in fact, reported their gender pay gap even though they have not had to do so. It is important to note that the Government are not pushing against a closed door on this. Businesses want to do this and the success of employers in future will be down to the diversity of their workforces.

As the noble Baroness will know, McKinsey has estimated that bringing more diversity to the workplace—particularly women—will increase the economy by over £150 billion by 2025.

My Lords, what are the Government’s plans to monitor progress? In particular, do they have plans to include a sectoral analysis?

In terms of monitoring progress, businesses with over 250 employees will have to do this exercise every year. I am pleased that all the businesses in scope actually reported their gender pay gap. There is clearly scope to start to disaggregate those figures by sector, and I hope that that will be where we get to at some point soon—but I think we have made a great start.

My Lords, I beg the Minister’s pardon for interrupting her earlier in my misplaced enthusiasm. The change of production from “just in case” to “just in time” means that there is no continuous process. It has been fragmented into home-based production where people are employed “as and when”. This means that they cannot accumulate a background of paying regular contributions to entitle them to any kind of benefits. Is the Minister thinking of a way to deal with the new way of production that now prevails?

The noble Baroness asks a very pertinent question. There can be a break in national insurance contributions for people who work and then step out of work, or who work from home. A flexible workforce is important to the future economy, but it must not disbenefit people’s pension take when they retire.

My Lords, it is nearly 50 years since the Equal Pay Act was passed and women still earn a lot less than men. The most recent statistics show that the gap is now 13.7%. Does the Minister agree that we should take much stronger action? The legislation is good as far as it goes, but women have been patient on this issue for an awfully long time and it ought to be strengthened. The pay gap audit, where companies employing over 250 people have to produce plans, is very good. Will the Minister have another look at this and see what can be done to strengthen it and make progress a lot quicker than it is now?

To a certain extent I wholeheartedly agree with the noble Baroness. The Equal Pay Act was brought in in 1970 and strengthened through the Equality Act 2010, but we still hear stories about huge disparities in pay between men and women who do pretty much the same job. The legislation has recently been updated, and any employer who is not paying men and women who do the same or a similar job equally is liable to court action. There is a very strong regime in place for that.