Women and Low Pay

Baroness Keeley Excerpts

Wednesday 18th November 2015 Westminster Hall

[Barbara Keeley (Worsley and Eccles South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Howarth.

I thank my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) for securing this important debate. It provides an opportunity to discuss how low pay affects women’s lives. As we have heard, there are many reasons why women are more likely to receive low pay. They are likely to be paid less than a male colleague for doing the same job, and many women work in low-paid sectors. Of course, more women work part-time.

It is interesting to think about the impact of age on women’s pay. Women in their 60s earn nearly 14% less than men, and women in their 50s earn 18% less than men, which is the highest difference for any working-age group. That has a significant impact on women’s income during their working lives, but also on their income in retirement. That is what I want to talk about. Low pay means that fewer women can save for retirement. If they take time out to have children or care for close relatives and friends, that affects the contributions that they can make to a pension, which means that women face additional disadvantages with retirement income.

I have recently been working with the campaigning group Women Against State Pension Inequality, which campaigns against the way state pension age equalisation has been imposed on women born in the 1950s. For many women reaching retirement age, the state pension will be the main or only source of income. Until 1995, women who worked part time could not join their company pension schemes, or they did not qualify because of time taken out of the workforce for ill health or to fulfil caring responsibilities. Even when a court judgment in 2000 apparently meant that access to employers’ pension schemes was possible, legal technicalities meant that it was too late for thousands of women to benefit. Women who worked part time between 1976 and 1995 should have been allowed access to company pension schemes, but they needed to claim within six months of leaving a job, and many women left jobs without knowing that they could claim. Also, women who worked for less than two years for the same employer did not qualify.

Despite such unfairness continuing to 1995 and beyond, state pension equalisation was started with the Pensions Act 1995 and accelerated with the Pensions Act 2011. Women born in the 1950s have been hit particularly hard, and changes have been enacted without appropriate notification. Many women received little or no personal notification of the changes to the state pension age, so they were left with inadequate time to plan for the change in their financial circumstances. As I have said, older women are more likely than men to be in lower-paid, insecure or part-time work. I have met women in their 60s who are now struggling on zero-hours contracts or jobseeker’s allowance, when they had expected to be able to retire at the age of 60. I met a group of women campaigning about this on Saturday, and one woman told me how, at the age of 62, she had been placed on the Work programme. Some women and their families are now experiencing real hardship because of the changes.

Members of Women Against State Pension Inequality shared with me their experiences, which include partners being unable to retire together due to the changes. Others discussed how they have struggled financially because they have given up work to care but have no income with which to support themselves. It is also a struggle for women in their 60s who have been self-employed, as that is often work that comes and goes. In one case, a woman caring for her husband, who has a terminal cancer diagnosis, will not be entitled to his pension after his death, and will not receive her state pension for a further four years. She said:

“It’s disgraceful to get to this time of life with loads of worries ahead.”

It is unjust that so many women have had their retirement income altered significantly with such little notice, meaning there is not enough time to plan for the changes.

The date at which the changes take effect is also unfair. Those born on or after 6 April 1951 will now have to wait until a later age to claim their pension, whereas friends born just before that date are not affected, which can mean that there will be a number of years’ difference between when women who are born a few months apart—probably people who were in the same class at school—begin to receive their state pension.

It is worth making it clear that the campaign group WASPI is against not the equalisation of the pension age but how the changes have been enacted. Many of those women have already spent their working lives being disadvantaged in pay compared with their male counterparts. The way the changes to the state pension have been enacted is a major injustice for these women, who have already lived with and overcome significant barriers in the workplace and now face even more barriers in their 60s.

It is time we looked again at low pay, but it is also time we looked at the other barriers faced by women of all age groups, particularly the additional hardship faced by women born in the 1950s. That is almost entirely due to the Government making changes to the state pension age without offering transitional protections, which were promised by the Work and Pensions Secretary in the debate on the Pensions Act 2011 but have not materialised.

[Angela Crawley (Lanark and Hamilton East) (SNP)]

It is an honour to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing such an important debate.

Gender equality is not a dream, or at least it should not be. Often when we debate gender inequality in the workplace, we hear the usual apologist grumbles from Members. We are told that, in many ways, it is a fact of life; it is the way the world works and we cannot continue to complain because it will not change—“Life is unfair. Men are men and women are women. That’s it. Accept it and get on with it.” Well, I will not accept it. That response, which I have come to expect, is not only lazy but wrong, and it does not address the real issues women face. If we think along those lines, of course nothing will change. Inequality will continue. Women will continue to be discriminated against for having children. They will continue to be refused access to justice and will always be paid considerably less than men. We cannot, should not and must not allow that attitude to go unchallenged, because it is that attitude that put us in the position we are in today and it is that attitude that will keep us here.

On 9 November, we marked equal pay day, when women across the United Kingdom started working for free, while men continued earning—a day that we should be talking about in history lessons, not in the 21st century. Forty-five years after the passing of the Equal Pay Act, men still earn two months’ more wages than women every year. The gap between men and women stands at a staggering 19% in the UK, with women earning 81p for every £1 that a man earns. Even in professions dominated by women—hairdressing, catering and cleaning—the pay gap still exists, while women in skilled trades, including plumbing and mechanics, suffer the biggest pay gap, earning close to 30% less than their male counterparts. That is a damaging indictment of successive UK Governments, employers and industry, and it is something we should be collectively ashamed of.

In Scotland, the gender pay gap is substantially lower than across the UK, which is welcome, but it still exists and it should not. More work must be done across these islands. In my constituency, gender inequality has been at the heart of the political debate for years. In my own local authority, South Lanarkshire Council, hundreds of women have fought for equal pay for equal work, and many of them have now received a payout, totalling the massive amount of £70 million. However, just a few months ago, figures published for South Lanarkshire Council showed that the gender pay gap was a staggering 16%, and many more women continue to fight for equal pay, so we are not there yet. I say that not to play politics but to show that the gender pay gap still exists, particularly in the public sector.

Scotland is one of the leading countries in Europe for reducing female unemployment, and we have done it through practical policies such as expanding childcare for two, three and four-year-olds and paying all Government employees the real living wage. We continue to move closer to the goal of equality. Scotland’s First Minister has made the business of redressing inequality a priority for her Government. Labour market figures show that female employment in Scotland has reached a record high, while youth unemployment is at its lowest level in six years and the number of people in work continues to grow. That is a testament to the strong actions taken by the Scottish National party in government, with the economic powers it currently holds, but women should not have to wait another 45 years—or 70 years, as the UN has estimated—for equal pay in Britain.

We have heard from Members about the campaign group Women Against State Pension Inequality and the impact of this issue on the entire generation of women born in the 1950s. What do the Government intend to do to address the issue of those women’s pensions? How will they rectify that, to ensure that women do not continue to experience inequality?

[Barbara Keeley]

I am glad to hear the hon. Lady raise the same point I did. Is she aware how much it rankles with and angers the women affected that they have not received the transitional protection the Government promised them? It is very harsh to impose the change on people without the protection the Secretary of State promised.

[Angela Crawley]

I absolutely agree with the hon. Lady and thank her for that point. I hope the Minister will address that in his remarks.

This fight is not reserved to half of the population. We do not fight against injustice for one sex; we fight for everyone. No man wants his wife, daughter, sister or mother to earn less simply because they are women. We need to send a strong message to employers, Governments, local authorities and industry that there is simply no excuse for discrimination. As things stand, we are damaging families, diluting gender equality and doing no favours to the economy that is so important to this Government. Now is not the time for excuses; we have heard them all before. Let us take strong, decisive action and put gender inequality where it belongs: in the history books.

--- Later in debate ---

[The Minister for Skills (Nick Boles)]

It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Brentford and Isleworth (Ruth Cadbury) on securing this important debate on an issue that concerns us all. I come from a family where the only thing controversial about gender equality was the suggestion that us men were anything other than inferior, so it has always been a mystery to me why the prejudices and discrimination against women, and indeed any other groups in society, persist, but sadly persist they do.

I suspect that the hon. Lady was not in the hall, but I am sure that she was pleased to hear my right hon. Friend the Prime Minister, in one of the most effective and powerful passages in his party conference speech in October, say:

“I’m a dad of two daughters—opportunity won’t mean anything to them if they grow up in a country where they get paid less because of their gender rather than how good they are at their work.

The point is this: you can’t have true opportunity without real equality.”

As well as paying tribute to the Prime Minister’s leadership on this issue, I would like to take this opportunity to pay tribute to the right hon. and learned Member for Camberwell and Peckham (Ms Harman), who, throughout her career in Parliament, in government and on repeated occasions as acting leader of the Labour party, has led the way on equality, including on women’s pay. All of us should salute her persistence and leadership on this issue.

The fact is that the pay gap, although smaller than it was, is too big, is unacceptable and must not be allowed to survive into the next generation. We can acknowledge that some progress has been made without in any way undermining the assertion that the gap as it remains is unacceptable. There has been some progress. The pay gap has decreased for full-time earners, but it is still too high at, I think, 6 and a bit per cent for full-time earners, and much less progress is being made for part-time workers and those in low-paid jobs. We can all agree that that position is not one that we should tolerate, so the question is what we can do to ensure not only that progress continues to be made, but that it is made more rapidly and made across the board, for part-time as well as full-time work.

I shall explain what the Government have long believed to be one of the most powerful tools in this respect. The laws were passed, as many hon. Members pointed out, by previous Labour Governments a long time ago, but once the necessary laws are passed, progress is often most rapidly achieved as a result of transparency—as a result of making it absolutely clear to everyone, not just the people who work for an employer but customers, partners or neighbours of the employer, what their record is on paying people equally. That is why we have decided to require employers of more than 250 people to publish information about the pay of men and women in their employ, so that they can demonstrate whether they are properly paying people equally. Driving through that transparency and adding to it, as we do with the enforcement of the national minimum wage, and a certain element of naming and shaming, whether formal or informal, both as MPs in respect of employers in our constituencies and as a Government in respect of larger employers nationally, will have a powerful impact on progress.

The second most powerful way to achieve change is to ensure a change in leadership. The Government’s focus on the representation of women on boards is not so much a result or a reflection of our interest in equality being greater in relation to high earnings than low earnings, although equality should be in place across the spectrum. It is more the fact that we are convinced that the more women there are on boards, the more voices there will be insisting that equality be achieved and not putting up with any persistence of inequality, however well disguised.

That is why we are delighted that we have more than met the original target set by Lord Davies of Abersoch to achieve 25% female representation on the boards of FTSE 100 companies. The figure is now at 26%. We now have more women on FTSE boards than ever before. I believe that there is not a single FTSE 100 company left that has no women on its board, but again, although that is welcome progress, it is not nearly enough, because many of the women who have been brought on to FTSE 100 and 250 boards are in non-executive roles. Our next challenge is to ensure that there is an equal increase in the representation of women in senior executive positions, because it is through the leadership roles in every employer that we will drive the change in employment practices down through all the employers in the country.

After leadership, the third most important step is to make it easier for women to get work, to stay in work and to return to work as soon as they choose to do so—it should always be their choice—after having children. That is why, at a time of very difficult decisions on the public finances, we have nevertheless made it a priority to invest in the provision of 30 hours of free childcare for three and four-year-olds for all families who work, because only when there is that significant number of hours of free childcare will we make it possible for more mothers of young children to go to work as soon as it is right for them to do so.

The final and most important measure is more broadly to increase the rate of pay, particularly in low-paid jobs. We have heard from many hon. Members that women unfortunately occupy more low-paid positions than men do. If we can increase pay in low-paid jobs, we will disproportionately help women. I understand the unwillingness of Opposition Members to acknowledge the substantial and significant step that the Government have taken by introducing the national living wage for people over the age of 25, and I accept that the Opposition want to continue to preserve the concept of a living wage as something distinct from our new national living wage. Leaving aside the nomenclature for a moment, the minimum wage that will be paid to every 25-year-old in the country, including in the great kingdom of Scotland, will go up by an amount far greater than any Opposition party suggested in the general election campaign.

[Barbara Keeley]

Will the Minister give way?

[Nick Boles]

I will not give way right now, but I will do so in a second. We have plenty of time, so the hon. Lady need not worry. The minimum wage will go up by an amount far greater than was recommended by the Low Pay Commission. We have strong evidence not only from internal Government estimates but from the Resolution Foundation that women over the age of 25 will disproportionately benefit from the increase in the minimum wage. For all that Opposition Members want to retain some scepticism about the brand that we are putting on the new, higher minimum wage, I hope that they will welcome that significant step in improving the pay of many women in this country.

[Barbara Keeley]

I do not think that the Minister needs to lecture the Opposition on the national minimum wage. Labour Members brought in the national minimum wage in the teeth of a fight from the Conservative party. I know that he was not in the House at the time, but he must know that. None of us needs to be lectured on that. Will he say whether he will address the issue that several Opposition Members have raised about transitional arrangements for the state pension age inequality for women born in the 1950s?

[Nick Boles]

I say gently to the hon. Lady that I was not lecturing her at all. I was resisting the suggestion that the national living wage—I accept that Opposition Members do not like its brand—is anything other than a dramatically positive step for low-paid workers, especially women, in this country. I did not hear a single member of any Opposition party welcome the increase that will happen in April for every worker over the age of 25 who is in a national minimum wage job. If the Opposition want the Government—for better or for worse, we are likely to be in government for the next four and a half years—to take on board some of their excellent suggestions for further progress, they should give us a little acknowledgement for that real achievement. It absolutely builds on the national minimum wage, which the Labour party introduced, and I am always happy to acknowledge, as I did earlier, the Labour party’s role in the Equal Pay Act 1970, but acknowledgement of each other’s achievements is a two-way street. It would be good for Opposition Members to acknowledge our achievement.

[Nick Boles]

I will answer the other point made by the hon. Member for Worsley and Eccles South (Barbara Keeley) before I give way again. She asked an important question on a subject that was also raised by the hon. Member for Lancaster and Fleetwood (Cat Smith). As I have said, I come from a family that is entirely dominated by women, and two of my sisters are in the age bracket that the hon. Ladies referred to. I have also had some pretty difficult conversations in my constituency surgery with many women who are affected.

The equal pension age is being introduced at the same time as the new state pension, which, compared with the current two-tier state pension, improves the amount of state pension for many women whose national insurance records are incomplete as a result of career breaks or a great deal of part-time work. I am not implying that it makes up all the loss, but there is a countervailing improvement. I am advised by the Department for Work and Pensions that there will be a review of the state pension age. The Pensions Act 2014 provides for a six-yearly review to take into account up-to-date life expectancy data and the findings of an independently led review. The first review will conclude by May 2017 and will consider, among a number of other factors, the impact of the state pension age change on women. That will be an opportunity to consider the issues that the hon. Member for Worsley and Eccles South raises.

[Barbara Keeley]

I would like to repeat what the Secretary of State for Work and Pensions said in 2011 on Second Reading of the Pensions Bill:

“Let me simply repeat what I said earlier…we have no plans to change equalisation in 2018, or the age of 66 for both men and women in 2020, but we will consider transitional arrangements.”—[Official Report, 20 June 2011; Vol. 530, c. 52.]

There were no transitional arrangements. Women who now do not get their pensions until 66 get nothing—no pensioner benefits or bus passes—and, as I have said, many of them are on jobseeker’s allowance or employment and support allowance. Some are even being forced, at the age of 62, on to the Work programme. That injustice will keep coming back. The Secretary of State in that debate promised transitional arrangements.

[Nick Boles]

I do not want to get into a discussion about what another Minister said in a debate that I was not part of, but the quote that the hon. Lady read out indicated that the Secretary of State would consider transitional arrangements. It did not sound to me like a clear pledge to bring in any particular transitional arrangement. I have described the position and the fact that there will be a further review in 2017, which will allow those issues to be revisited.

--- Later in debate ---

[Barbara Keeley]

The Minister said that the Opposition have not welcomed the changes to the national minimum wage, so I would like to say something about it. Before the spending review next week, there is a real fear that the £1.7 billion cost could bring down the care sector. If the Minister still has a chance to lobby the Chancellor before next week, he might like to make that point to him. There are real fears about that. In fact, when I asked the Community and Social Care Minister about it yesterday in Health questions, he actually asked me where the funding was coming from. In response to the Minister, the reason people have concerns is because of things like that.

[Mr George Howarth (in the Chair)]

Order. The hon. Lady is making a very tenuous link. I hope that Ruth Cadbury will not be led down that particular primrose path.