Gender Pay Gap

Tuesday 27th February 2024 Lords Chamber

Question

14:37

Asked by

[Baroness Thornton]

To ask His Majesty’s Government what plans they have to speed up progress on closing the gender pay gap.

[The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)]

My Lords, the gender pay gap has fallen by approximately a quarter in the last decade. It was a Conservative Government who introduced gender pay gap reporting, building on the robust equal pay protections already in the Equality Act. This has motivated employers to look at their pay data and improve workplace equality. To accelerate progress we have supported legislation to enhance flexible working, extend redundancy protection for those on maternity leave and introduce carers’ leave.

[Baroness Thornton (Lab)]

I thank the Minister for that Answer and particularly welcome the flexible working initiative. Given those endeavours, have the Government made any assessment of how quickly we might bring forward the expected date of 2044 for getting to equal pay? I invite the Minister to support the Labour policy that we should enshrine in law a full right to equal pay for black, Asian and ethnic-minority people, and disabled people, phasing this in to help employers. Does the Minister think that is a good idea?

[Baroness Barran (Con)]

In response to the noble Baroness’s first question, as she understands very well, a number of factors influence how quickly the gender pay gap will decline. Obviously, there is so much research now on the value of a diverse workforce and how that improves profitability and competitiveness; we hope it will accelerate. In relation to ethnicity pay gap reporting, the noble Baroness will be aware that this gap is 2.3%, much smaller than the gender pay gap. We are working on promoting our guidance on how to address this through employer groups. In relation to disability reporting, following the successful court action we are reviewing our responses to the consultation.

[Baroness Burt of Solihull (LD)]

My Lords, does the Minister agree that the value of any employee should be based on the contribution that they will make to the organisation, not what they were earning before? Research by the charity Fawcett found that 61% of job applicants asked about previous salary history said that it damaged their confidence to negotiate a better salary. Does she not agree that this requirement bakes in gender, race and disability inequality and prevents people on lower salaries ever making the salary strides they need?

[Baroness Barran (Con)]

Those were some of the questions we explored in our pay transparency pilot, which looked at the impact of requiring employers to put salary information into their job recruitment advertisements and not asking about previous salaries. We plan to publish the methodology for that so that employers can adopt it. We will also do more work to look at the challenges of implementation.

[Lord Hunt of Wirral (Con)]

Does my noble friend the Minister share my concern about the gender pay gap in pensions, which just accumulates in historical terms to create a very serious problem in the future?

[Baroness Barran (Con)]

My noble friend is absolutely right. Last June, DWP published an official measure of the gender pensions gap, which is currently 35% in private pensions. The reforms that we brought in will mean that 3 million women will benefit by more than £550 per year by 2030 and that the gender pensions gap will equalise by the early 2040s—more than 10 years earlier than under previous legislation.

[Lord Davies of Brixton (Lab)]

My Lords, following the previous supplementary question, I think the Minister was referring to achieving equality in state pensions. The big problem—and what is leading to most of the gender pension gap—is the difference in the caring responsibilities, with most unpaid care undertaken by women. The Minister is correct that the Government have identified the problem; can she give a commitment to come up with a worthwhile solution?

[Baroness Barran (Con)]

As I have already said, the Government are working on a number of different aspects of this. Obviously, a critical part in relation to maternity leave—and the impact that, as the noble Lord rightly says, one can see on the gender pay gap —is our huge commitment to expanding the childcare offer, so that no women will be unable to return to work for lack of childcare support.

[Lord Watts (Lab)]

My Lords, the Government have just produced a list of employers that paid below the minimum wage, in some cases for many years. Does this not show that we need stronger enforcement powers and more people checking that employers are doing their duty and paying their workers correctly?

[Baroness Barran (Con)]

If I have understood correctly—forgive me if I have not—the noble Lord is potentially conflating different things. Obviously, the minimum wage is a legal requirement, and the equal pay legislation addresses the same in relation to gender and other aspects. What we are seeking to do, through enabling activities around flexible working, for example, but also maximising transparency and celebrating the success of employers that have a truly diverse workforce, is to use multiple levers to get to the same goal.

[Lord Lucas (Con)]

My Lords, since we have made such progress in dealing with the gender pay gap, might we also turn our attention to trying to persuade employers of the importance of helping parents, most of them women, who have taken time out from their careers to bring up children, to get back into the workforce with the same status at which they left it?

[Baroness Barran (Con)]

My noble friend is absolutely right. Part of that is about the time it takes for working parents to get back into the workforce. Our commitments—starting this April and building up, so that there will be 30 hours of free childcare for every family with a child nine months old and above—will be crucial for achieving that.

[Baroness Goudie (Lab)]

There is mandatory reporting —although there needs to be more—but when are the Government going to get tougher about taking proceedings against companies that do not report in their annual report or ensure that the Equal Pay Act is committed to? No companies are really being taken to court on this issue, so the Government need to step up on this.

[Baroness Barran (Con)]

I am more than happy to take that back to the department. The mandatory reporting applies to companies with more than 250 employees. I was not aware of the cases that the noble Baroness refers to, but I am happy to pick that up.

[Baroness Hussein-Ece (LD)]

My Lords, the right to request flexible working has made major strides for women since it was introduced, but what if companies of a certain size were also required to include possible flexible working options in their recruitment when advertising for these posts? The Minister may be aware that a recent trial in Zurich led to a massive one-third more women being hired for senior positions. Does the Minister agree that a similar trial in the UK would be worth undertaking?

[Baroness Barran (Con)]

A number of businesses offer flexible working from day one, and obviously there is a legal duty to do so from 26 weeks’ employment. As all noble Lords will recognise, we have seen a tremendous change in patterns of work following the pandemic, particularly flexibility between the workplace and home, and there is an increasing natural adoption of those approaches.

[Baroness Berridge (Con)]

My Lords, in relation to the gender pension deficit, is it the case that, when women are getting divorced and may not have legal advice, they are not taking the correct decisions—for example, they assume that the former matrimonial home is the largest asset—and not getting the pension split on divorce? Could we have some data to illuminate that and better communication to women in those situations?

[Baroness Barran (Con)]

As ever, my noble friend makes a very good point. I would be happy to meet her afterwards to explore how we could make that a reality.