Gender Pay Gap

(Limited Text - Ministerial Extracts only)

Wednesday 5th December 2018 Westminster Hall

[The Minister for Women (Victoria Atkins)]

It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Walthamstow (Stella Creasy) on securing the debate. We all know how committed she is to this important issue and to gender equality generally. It is a pleasure to discuss it with her in this forum, as it is to meet her behind the scenes to try to get things done.

I also thank other hon. Members for their contributions; I am delighted that so many strong women contributed. I was particularly delighted that the hon. Lady seemed to describe my right hon. Friend the Member for Wokingham (John Redwood) as a unicorn—she said there were discussions about unicorns in the main Chamber and he was on his feet at the time. I will treasure that comment and keep it close to my heart.

This year has been one of milestones: data from the Office for National Statistics shows that the gender pay gap has fallen to a record low; more than 10,000 employers have published data for the first time under the new reporting regulations; and the pay gap became one of the biggest news stories of the year. Those are all indications that the issue has climbed up the agenda, which we know is being translated into conversations in industry and business. People are finally talking about this injustice.

I recently met some senior businesspeople who run some of the most powerful businesses in the country—indeed, the world—to discuss modern slavery. One of them told me, “I was at a meeting in New York recently and, in a room full of investors and businesspeople, we talked about the gender pay gap regulations in the UK.” It is not just us in this country who are having this conversation about the regulations and the injustices they have revealed; other countries and businesses around the world have noticed too. We are under no illusions that this is just the first step, but it is still a huge step forward. Employers across the country are now aware of the challenge that they face, and we are committed to supporting them and tackling the issue together.

I want to start by discussing the women who are perhaps most affected by gender pay gaps—those who are the lowest paid—which is an issue raised by the hon. Member for Walthamstow. The emphasis has tended to be on well-paid women and on directorships, because we want to get the symbolism right and put the message out there that women can run businesses and so on.

[Kirstene Hair (Angus) (Con)]

I commend the Government’s record on trying to narrow the gender pay gap. It was a pleasure for me to address female electricians in this place on Monday. One of the top issues that came up in discussions with them was the engrained workplace cultures that really curb female progression. Can the Minister update us on what she is doing to solve that?

[Victoria Atkins]

I was at the same event, and a female electrician corrected me by saying that only 1% of electrical engineers are female. As in our earlier discussion about pilots, there is no reason why more electricians and electrical engineers should not be women.

Let me turn to the work we are doing to help the lowest paid. The Minister for Women and Equalities, my right hon. Friend the Member for Portsmouth North (Penny Mordaunt), recently announced that the work of the Government Equalities Office will be broadened to include an explicit focus on low-paid, low-skilled women, who have often been left out of the conversation, despite possibly requiring the most support, given the multiple barriers they face. The message that she wants to give, and which I echo, is that this is not a question of forgetting about directorships or the highest-paid women; this is about multitasking and ensuring that we reflect the whole economy and women’s contributions to it. We know, for example, that the lowest-paid women tend to feature in four industries: retail, childcare, caring and cleaning. We are looking at those sectors to ensure that the figures for the gender pay gap translate into real-life policies that have the greatest impact for the lowest-paid women.

The shadow Minister mentioned some figures quoted by the OECD. She will have to forgive me—obviously I am doing this on my feet—but just to put them in context, we understand that the OECD figures use a different methodology and go much wider than our gender pay gap measures. We are working with colleagues across Whitehall to increase women’s economic empowerment. In terms of Government recruitment, those factors are very much taken into account when we look at contracts. I hope that reassures her.

I turn now to the drivers of the gender pay gap. This is clearly just one of the steps we are taking to tackle the gap; other steps include introducing shared parental leave and pay, and running a £1.5 million campaign to promote the scheme. Hon. Members have made the point about fathers wanting to play a much greater part in raising their children, particularly in the early years. I think there is a lot more that the scheme can and should do. We want to raise awareness of it, so that employers understand the regulations and can ensure that their male employees can contribute to family life in as powerful a way as their female employees do.

[Hannah Bardell]

I thank the Minister for her extremely positive contribution, which I know will be followed with actions. I have spoken to a number of male constituents who have asked their employer about paternity leave and received quite negative responses. Education and engagement with businesses across the UK is important in enabling men to take paternity leave without facing stigma and discrimination as a result.

[Victoria Atkins]

The hon. Lady raises a very important point. This is about changing conversations and attitudes in the wider society as much as it is about what we do in this place, which of course is important. Frankly, it is about ensuring that society modernises the way it treats men and women in the workplace. We know that some employers are better than others. I hope that employers who are not doing such a great job will recognise the business reality: given the choice, good people will not want to work for bad employers. This is very much part of us all contributing to the conversation to ensure that employers know how they should treat their workforce.

There is more to supporting people in the workforce. In addition to shared parental leave, we are extending the right to request flexible working. We are creating a £5 million fund to support returners and spending about £6 billion on childcare support by 2019-20. We know that closing the gap will require a collaborative effort from Government and businesses, but I am convinced that, to truly solve this, employers must be the driving force. Every single employer who was supposed to have reported has done so, which means that 10,500 businesses are having conversations—sometimes for the first time—about how they treat women in their workforce.

I absolutely accept what the shadow Minister and others said about the need for action plans. As she knows, we take a slightly different approach to this. I want businesses to come up with their own action plans—indeed, we understand that about 40% of eligible employers have done so. I want to bring businesses with us, but if in due course that does not happen, that option remains open. At this stage, we want the transparency created by reporting figures to be met and addressed further by businesses doing that for themselves through their action plans.

[Dawn Butler]

Will the Minister consider fining companies that refuse to make action plans or change their way of working, as is the case in Iceland?

[Victoria Atkins]

That is an interesting idea. As I said, I want to work with businesses on this. The figures suggest that they are getting the message, but we are all impatient for action and for pay gaps to be closed, so that is a very interesting thought.

I am drawing towards the end of my speech. I am conscious of the time and want to give the hon. Member for Walthamstow a minute, so if I may, I will canter through some of the other points raised. Hon. Members have rightly raised the issue of extending the regulations. We have had only one year of reporting, and I urge them to allow us a little more time to assess the impact of the regulations. We need to consider any changes fully, given the impact on the comparability of the data year on year. We want a foundation of data before considering whether or how to change the current requirements. I am conscious of the wish to lower the threshold at which employers have to report. Again, let us have a couple of years of reporting at the higher level and with big companies, which have human resources departments that can deal with this, with the hope that it trickles down—which I know it is—to smaller employers as well.

In order to give the hon. Lady time to respond, I will end by saying that we know that pay gaps are not restricted to gender. That is why the Prime Minister announced a consultation on ethnicity pay reporting in October, setting out a number of questions that need to be resolved to allow meaningful action to take place. We are mindful of those aspects of fairness in the workplace.

I am grateful to the hon. Member for Walthamstow for this fantastic chance to reflect on a truly momentous year on this agenda, and I am extremely grateful to her for her continued interest in this issue.