Small Business, Enterprise and Employment Bill

Baroness Thornton Excerpts

Wednesday 11th March 2015 Lords Chamber

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[Baroness Thornton]

58: Before Clause 147, insert the following new Clause—
“Equal pay: transparency
(1) The Secretary of State must, as soon as possible, and no later than 12 months after the passing of this Act, make regulations under section 78 of the Equality Act 2010 (gender pay gap information) for the purpose of requiring companies to publish information showing whether there are differences in the pay of male and female employees.
(2) The Secretary of State may consult such persons as the Secretary of State thinks appropriate on the details of such regulations prior to publication.”

[Baroness Thornton (Lab)]

My Lords, I start by thanking all supporters who have put their names to the amendment—the noble Lord, Lord Low, and my noble friends Lady Prosser and Lord Young—and also those who failed to put their names to it, because there were many others who wished to offer their support and were keen to support the purpose of the amendment.

I thank the Minister for the two meetings that we had to discuss the amendment and the issues it raises. I welcome the amendments that she has put to my amendment and congratulate her on doing so. I inform the House from the outset that as long as the Minister intends to accept my amendment, as amended by her, the proposers of the amendment are happy to accept her amendments.

I thank my colleague Gloria De Piero MP for her leadership in this recent campaign. I also thank the TUC and Unite the union for their briefing and continuous commitment over many years and pay tribute to Frances O’Grady and many women trade unionists who have worked without cease and done a huge amount to support women in the workplace against discrimination. I also thank Grazia magazine for its inspiring campaign and petition, reflecting always what its readers have had to say about equal pay and the injustices that they have experienced. Finally, I thank the unsung heroine Nicola Jayawickreme in our Labour Party office here who had the idea that the Bill might lend itself to bringing forward this amendment. She has done a great job.

One of the strengths of this House is that we can and do seize the moment on issues. I suggest that this is one of those times. We were wise to put the powers on transparency in Section 78 of the Equality Act 2010 and I hope that we will now be wise to enact those powers. It is 46 years since the machinists walked out of Dagenham’s Ford plant in protest over the pay divide which prompted the Equal Pay Act. Overall, women in the UK are still earning just 81p to every pound that men earn. According to the new figures based on the Office for National Statistics annual survey of hours and incomes, the pay gap between men and women in their twenties has almost doubled since 2010, from 2.6% to 5%, and it has also increased for women over 50.

We are falling down the international scales on equal pay. Women across the world still earn only 77% of the amount that men earn, a figure that has improved by only three percentage points in the past 20 years, according to the United Nations International Labour Organization report this week. Frankly, I do not think we can wait another 40 years to get equal pay.

The most exciting moment for me in the recent equal pay campaign was meeting the Dagenham women last December. They were right to be astonished and dismayed that we still do not have equal pay. At the time, I wished we had better news for them. Perhaps after today’s business we can say that we are absolutely on our way to delivering the equal pay that they fought for all those years ago.

It is without doubt true that under this Government some progress has been made by exhortation and encouragement, but the truth is that it is not nearly enough when one considers that, despite this effort, a mere five companies actually publish their gender pay scales: PricewaterhouseCoopers, for example, is one of them. The company says that it has had only a positive impact, because it is tangible proof that it is a fair employer. Why would our large employers not wish to embrace such a programme and have such a reputation with their employees?

Amendment 58 calls for the enactment of Section 78 of the Equality Act within a year. Last week, my noble friend Lady King mentioned some of the examples that Grazia has so usefully collected from its readers. Shannon, aged 25, works in advertising and felt too insecure in her job to ask for a pay rise, despite knowing that her male counterpart was earning more than she was. To make matters worse, for an end-of-year bonus he was given £2,000 in cash while she received a £100 Liberty voucher. Erin, 30, is a lawyer who was asked to take a pay cut to avoid redundancy, only to find that none of her male colleagues had been asked to do the same. Amanda, who works in the media, was stunned when two of her male colleagues drunkenly boasted about their salaries as she realised both were being paid an average of £10,000 a year more, despite having the same experience as her.

Last autumn, an overwhelming majority of 258 MPs voted yes to the implementation of Section 78 of the 2010 Equality Act, so we know that there is support for this in the Commons.

We do not believe that this new clause will place a disproportionate burden on British business. Of the 4.9 million private sector employers in 2013, 7,000 employ more than 250 staff and will be affected by this legislation. These are data that these companies already routinely collect and which they would publish with their annual reports. That will make a difference to women, because close to 50% of the employees in the private sector in Britain work in these large firms.

What of the EHRC? During the passage of the Equality Act 2010, it said in relation to Section 78 that if a voluntary regime,

“is achievable, then there would be no need for the clause to be brought into play”.

It made it clear that over time it would,

“be looking for an increase in the proportion of employers measuring and sharing information on the differences between men’s and women’s pay”.

Indeed, during that time the EHRC has supported the Government’s Think, Act, Report initiative to encourage companies to improve gender equality on a voluntary basis. However, can the Minister confirm that only 270 employers are involved in the Think, Act, Report initiative, compared with 7,000 companies with more than 250 employees in the United Kingdom? Indeed, of those, only five have signed up to publish their gender pay gaps. This suggests that a voluntary approach on its own will not deliver the transparency needed to achieve a change in companies’ behaviour. This is what the EHRC says:

“The persistence and extent of the pay differences between women and men suggest that considerably more needs to be done to reduce the gender pay gap. In light of the low impact of voluntary gender pay reporting and the recent increase in the size of the gender pay gap, the Commission believes that the time is right for implementing section 78 of the Equality Act through this New Clause. By having to publish information about their gender pay gaps, companies will be encouraged to address those gaps in order to demonstrate that they are complying with equal pay legislation and to attract and retain talented women in their workforces”.

Closing the gender pay gap is a priority for all political parties—possibly with the exception of UKIP, but who knows—so I think we need to get on with it. I beg to move.

Amendment 58ZZA (to Amendment 58)

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