Gender Pay Gaps

Baroness Williams of Trafford Excerpts

Wednesday 8th May 2019 Lords Chamber

[Baroness Gale]

To ask Her Majesty’s Government what steps they are taking to require employers to publish action plans relating to their gender pay gaps which include (1) a long-term strategy on how they will close such gaps, (2) how such progress will be monitored, and (3) the requirement to publish the results of that progress.

[The Minister of State, Home Office (Baroness Williams of Trafford) (Con)]

My Lords, we are thrilled that over 10,000 employers have published their gender pay gap reports for a second year, but what matters now is the action that they take to close that gap. I urge all employers to publish an action plan detailing what they are doing to address the pay gap and to use the Government Equalities Office guidance on identifying effective actions to do so. Since employers publish their figures annually, we will track their progress and hold them to account.

[Baroness Gale (Lab)]

While I thank the Minister very much for her reply and for the fact that she will be urging employers to publish action plans, is she aware that the figures supplied for the reporting deadline in April showed that the gender pay gap has failed to improve in the past year? Every industry continues to pay men on average more than women, and the average gap dropped by only 0.1% over the year. One of the key drivers of the gender pay gap is that there are fewer women employed in senior and higher-paid positions. Much more needs to be done by employers to encourage and to promote women to top positions. Does the Minister agree that the Government should require employers to publish action plans and ensure that they are accountable and transparent, with meaningful sanctions put in place for those who do not comply? Without this requirement, progress will be very slow. Does she agree that women have waited a very long time for this gap to close, so surely now is the time for much more progress to be made on the gender pay gap, which would be beneficial not only to women but to the economy and society?

[Baroness Williams of Trafford]

I certainly agree that women have waited an awfully long time not only for these regulations to come into force but for the gender pay gap to narrow. The noble Baroness said that the GPG has not narrowed. It has narrowed marginally—not enough, and there is more to do—but it is quite pleasing that there are 366 employers who, though they do not have to produce a gender pay gap return, have done so in this second reporting year. Last year, 48% of employers produced an action plan, which is very pleasing indeed. The Government have provided an online toolkit, and there have been 14,000 views of that online. We are slowly moving in the right direction, but we must remember that what we have done is ground-breaking globally.

[Baroness Burt of Solihull (LD)]

My Lords, the Royal Statistical Society has found that the government system used to report pay gaps is flawed in some important respects, open to gaming and very difficult for people to understand. Can the Government please look at this and consider implementing some of the recommendations, such as introducing online gender pay gap reporting calculators with built-in sanity checks, to ensure accurate reporting and prevent implausible entries?

[Baroness Williams of Trafford]

The noble Baroness is absolutely right to point out that accurate reporting is crucial to understanding what organisations are doing to reduce the gender pay gap and crucial to ensuring that there is no gaming of the system, as she points out. Based on our research with employers, we know that the majority were able to understand the gender pay gap reporting system and are correctly reporting their data; 95% are reporting ahead of the deadline, which is very good news indeed. As she knows, the EHRC is responsible for enforcing the regulations and is looking at any statistically improbable data. The Government Equalities Office has already implemented some of the recommendations from the Royal Statistical Society’s report—so I thank the noble Baroness for raising the issue—including improvements to the guidance and the statistical sanity checks.

[Lord Boateng (Lab)]

Will the Government, in the interests of fairness and equality, make the same demands of employers in relation to ethnicity as they do in relation to gender? There is plenty of evidence to indicate that black and ethnic minority people suffer equally, if not worse, from disparity when it comes to employment pay and prospects.

[Baroness Williams of Trafford]

I thank the noble Lord very much for raising that. I do not disagree with him that BAME representation, not only in organisations but also on things such as FTSE 100 boards and FTSE 250 boards, is diabolical. We always saw gender pay gap reporting as a start on this journey—which is absolutely not to dismiss the noble Lord’s point that we have an awful lot further to go.

[Lord Fox (LD)]

My Lords, in her initial Answer, the Minister talked about holding businesses to account. Can she set out what sanctions the Government have to hold businesses to account and what thresholds they will use when they apply those sanctions?

[Baroness Williams of Trafford]

As I said to the noble Baroness, Lady Burt, the EHRC has enforcement powers if people are misreporting or not reporting at all. Although the story so far has been very good, with almost 100% compliance, sanctions are within the EHRC’s powers.

[Lord Dubs (Lab)]

My Lords, to what extent is the gender pay gap distorted by the number of people, often very senior, who are masquerading as self-employed when they are working for large organisations? They are missed out of the figures altogether. Is not the only answer that individual tax returns should be in the public domain, as they are in other countries? Then we could pin all this down once and for all.

[Baroness Williams of Trafford]

The noble Lord has raised this before. There is not agreement across the House about such intrusion into people’s personal data. We often talk about data protection and privacy of data. He is right to point out that there are certain cohorts of people for whom pay data is not required because they are not employees—they might be partners and therefore not salaried—but the good thing about gender pay gap reporting is that it is done on a quartile basis, so that one can see at each level of the organisation where the disparities lie.