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Gender Pay Gap

Volume 816: debated on Tuesday 23 November 2021


Asked by

To ask Her Majesty’s Government what assessment they have made of the persistence of the gender pay gap, and what steps they are taking to close it.

I assure the noble Lord that we are continually looking at and assessing the gender pay gap. The national gender pay gap has fallen significantly under this Government and by approximately one-quarter in the last decade. The gap is caused by a range of factors, and reporting regulations have helped to motivate employers and focus attention on how improving equality can happen in the workplace. However, to continue making progress we need to understand in even more detail the real barriers that women face in the workplace and then take action to ensure that everyone has the opportunity to fulfil their potential.

My Lords, the gender pay gap continues to blight the lives of many women, denying them access to good food, housing, education, healthcare, pensions and economic freedoms. I ask the Minister to commit to two things: first, not to award public contracts to organisations that have failed to eradicate the gap and, secondly, to give women a statutory right to know the pay of male colleagues doing equivalent work, with appropriate confidentiality.

As ever, the noble Lord is very incisive and focused on the things he wants to change. I note the two points that he makes. While I cannot commit to doing them, I will go back to the ranch, tell them that the noble Lord, Lord Sikka, is on the prowl again, and see what they say.

Guidance from the Government Equalities Office states that employers reporting on the gender pay gap should record their employees’ gender identity, not their biological sex. Some argue that for the vast majority of people, gender identity matches birth sex and that recording employees’ gender identity would therefore have no significant impact on an organisation’s gender pay gap. However, in male-dominated professions such as telecommunications, where fewer than 5% of the workers are female, even a small number of misclassifications can have a significant distorting effect on the data. Does my noble friend agree that this is the case? Will she now review the GEO guidance so that it makes it clear that employers must record employees’ birth sex, not their gender identity?

Let me be very honest and straight with my noble friend: the Government have no plans to change the guidance. Gender pay is not supposed to be a data-collecting exercise, and to make it so would increase the burden on employers.

My Lords, the world of work is changing. One of the effects of the pandemic has been more working from home, which I think will continue. There is a real danger that the gender pay gap, rather than being diminished, will actually increase because we will have more people working from home with caring responsibilities, and this will disproportionately affect lone parents and women. What will the Government do, not just to reduce the gap but to prevent it widening?

The gender pay gap is something that the Government take very seriously. The point that the noble Baroness makes about flexible working and working from home, and the impact that those have on women in particular, is well noted. Flexible working is wide-ranging and includes part time and flexitime, and it can be crucial for opening up opportunities, particularly for women. I cannot give a categorical answer about what we will do other than to say that we are mindful of this in everything we do in the Government Equalities Office. It may be that I come back to the noble Baroness with a bit more detail.

My Lords, my supplementary question handily spans both parts of the Minister’s multitasking portfolio—an opportunity too good to miss, and a sort of birthday present. Will the Minister acknowledge that one of the biggest consequences of the gender pay gap is the gender pensions gap? Can she therefore outline what steps the Government are taking to address that specific dimension of the problem? When will action be taken to address the acknowledged shortcomings in the benefits that accrued from automatic enrolment for the many women on low pay in broken employment?

I thank the noble Lord for that wonderful birthday present. Let me just say that auto-enrolment has been a fantastic success, and we want that to continue. On the point he raises about net pay and the pensions gap, the Government are absolutely going to rectify the anomaly. We published a call for evidence. The Government will pay a top-up to low earners, making contributions to pensions schemes using a net pay arrangement, from 2024-25 onwards.

My Lords, I wonder if the Minister has heard of the book The End of Bias: How We Change Our Minds, by Jessica Nordell, on the incremental, cumulative effect of unconscious bias. Her model found that only a 3% unconscious bias in performative evaluation resulted in 87% of men in the top jobs. It is a shocker, but it explains a lot. If the Minister has not seen it, could she have a look and consider its implications for government policy?

I wish I had known about this before, because somebody could have bought it for me for my birthday. I will go out and find that book, and I will read it. As for changing bias and the distortions in salaries between men and women, no one needs to push our door on that—we are there. As the good man Sir Winston said, those people who can change their mind can change anything.

I join other noble Lords in wishing the noble Baroness a happy birthday. Research by the Fawcett Society found that three out of five women who had been asked about salary history believed it damaged their confidence in negotiating better pay and believed a low past salary was coming back to haunt them. Does the Minister recognise that, when companies ask about salary history, it can mean that past pay discrimination follows women, people of colour and people with disabilities throughout their working life? Does she share my concern that this issue means new employers replicate pay gaps from other organisations? Could the Government consider this matter and allow it to be part of the influencing of their policy?

I completely agree with the noble Baroness. You can sit in front of an employer and tell them what your salary is, and then they think they can get away with paying you just a little bit more. That is not on. I share the noble Baroness’s concerns, and I will feed those back into the policy-making process.

I declare my interest as in the register, and I echo the birthday wishes to my noble friend. Following on from the question from the noble Lord, Lord Davies, I am delighted that Her Majesty’s Treasury will introduce measures to top up the pensions of those women who are receiving lower net pay each week due to the pension choice of their employer. The gender pensions gap is an urgent issue; it is twice the size or more of the pay gap. What measures are the Government taking to ensure employers help to close the gender pensions gap?

My noble friend has been a long-term campaigner on the gender pensions gap and the net pay issue, and I am glad that we have some good news on the horizon. It was a Conservative Government who introduced mandatory gender pay gap reporting, in 2017, which means that all large employers—those of more than 10,000 employees—have to calculate it publicly. This has placed the gender pay gap at the top of the agenda and prompted conversations with business. Employers are now focused on understanding and tackling the causes of the gaps in their own organisations.

Does the Minister agree—and I ask her to be bold in this instance—that complete transparency of income is the best way of dealing with the gender pay gap and discrimination on the grounds of race and disability? Surely the only answer is that we should have all incomes in the public domain through the tax system; that way we would know who is earning what and where discrimination takes place, and we would also see who is on the fiddle.

You cannot argue with that. On transparency, I am absolutely with the noble Lord, but the issue of publishing everything on tax and salary is well beyond my pay grade. I will talk to my friends in the Treasury.