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Gender Pay Gap

Volume 802: debated on Monday 9 March 2020


Asked by

My Lords, the gender pay gap is at a record low of 17.3%. However, the gap for full-time employees has increased slightly to 8.9%. The pay gap is caused by a range of factors. To address it, we must ensure that men and women not only have equal pay but equal access to opportunities. Reporting regulations require that around 10,000 employers report their data annually. However, we want employers to go beyond reporting to create genuinely inclusive workplaces for everyone.

My Lords, International Women’s Day is always an opportunity to reflect on successes, and there is no doubt that gender pay gap reporting has made a significant difference to many women’s lives. As my noble friend said, in the past two years, over 10,000 employers with more than 250 employees have reported that data. However, that is only 34% of the workforce. The Government have acknowledged that the 250-employee threshold is just the starting point. What plans do the Government have to lower the threshold?

My Lords, we have had two successful years of gender pay gap reporting so far, with over 10,000 employers publishing their data in both years. It is important to give the regulations time, to see how employers respond. We are required to review the gender pay gap information regulations by 2022, and we intend to consult on any changes to the information that employers must provide by the end of 2021. If you have under 250 employees, it is difficult statistically to value that data, so we are still looking to consult on any changes.

My Lords, the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 contain no enforcement mechanism. The only role of the Secretary of State, under Regulation 16, is to carry out a review “from time to time”, and to produce and publish a report and conclusions. This is not good enough. The first report is not due until 2022, and then at intervals not exceeding five years. The Equality and Human Rights Commission, however, has duties and powers pursuant to the general role under the Equality Act 2006. Although we have all this reporting and there is the power to do some enforcement, nothing has happened to date. Having spoken to both departments, neither seems to know which has the power or which is to use it.

I thank the noble Baroness for her question, but we are 100% compliant with what we are asking employers to do. If we go further and make it a mandatory return, this can become a tick-box exercise, which we do not want. We want employers to actively use their data to tackle the barriers that women face in their businesses.

My Lords, in October 2018 the then Prime Minister launched a series of measures to tackle the barriers facing ethnic minorities, including ethnic-minority women, in the workplace: in effect, the ethnicity pay gap. The Race at Work Charter, which built on the work of the 2017 review, Race in the Workplace, found that people from black, Asian and minority-ethnic backgrounds were underemployed, underpromoted and under-represented at senior levels. That review concluded that the time for talking is over and the time to act is now. What has happened to the ethnicity pay gap recommendations in the review, and when we can expect to see them?

The Government ran a consultation from October 2018 to January 2019 on ethnicity pay reporting and received more than 300 detailed responses. They have since met with businesses and organisation representatives to understand the barriers to reporting and what information they could still publish to allow for meaningful action to be taken on the findings of that consultation. The Government have also run voluntary methodology testing with a broad range of businesses, using real payroll data better to understand the complexities outlined in the consultation. We will share the next steps on this in due course.

My Lords, the right to equal pay for equal work is enshrined in the Equality Act 2010, but there is currently no formal route by which women can obtain information about a male comparator’s pay. To obtain this information, they need to embark on a complex and often expensive legal battle; many women, of course, do not want to do this. Does the Minister agree that, in addition to the right to equal pay for equal work, women should also have the right to know?

Yes, women need to have the right to know, but this is a very difficult thing for the Government to deal with because people also have the right not to have their pay in the public domain. The Government are looking at this and further proposals will come forward, including in the employment Bill, which will be introduced in due course.

My Lords, if we can stick for a moment with the gender pay gap, the Minister has said that she is concerned about the gap—concerned that things are not moving on—but does anybody in this House think that it is going to close by osmosis? We need action: we need the Government to determine what they are going to do. There are a whole range of things that they could do, and I will give just two examples. First, they should encourage employers to provide women-only training programmes so that women can be lifted up on pay scales et cetera. Secondly, they should work with employers to identify ways of producing much better-quality part-time employment. Are any of those ideas ones that the Minister would want to push forward and encourage the Government to support?

The noble Baroness is absolutely right: we need to move forward on this, but it is about cultural changes within large organisations. We saw today the issues in the finance sector in particular. However, the Government are already doing things: they publish advice to all employers, and they have webinars, face-to-face events, trade shows and so on. They are working closely with the Women’s Business Council on particular sectors that are slow in moving forward, including the retail and finance sectors. The Department of Health and Social Care is undertaking a complete review of the gender pay gap in medicine, led by Dame Jane Dacre. We are doing a lot to help but this a slow process. It is still moving in the right direction, and we want to ensure that it continues to do so.