Gender Pay Gap

Baroness Williams of Trafford Excerpts

Thursday 31st October 2019 Lords Chamber

[Baroness Burt of Solihull]

To ask Her Majesty’s Government what plans they have to address the gender pay gap for women in their 50s, following the analysis conducted by Rest Less, published on 29 October.

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

My Lords, the gender pay gap is highest for those aged 50 to 59, reflecting the accumulation of structural inequalities that disproportionately impact women across the life course. In July, we published our gender equality road map, setting out how the Government will tackle gender inequalities affecting women throughout their lives. This could include actions to promote women’s progression, to support carers and returners, to help women plan for retirement and to understand women’s reproductive health experience in work, including the menopause.

[Baroness Burt of Solihull (LD)]

I am very grateful to the Minister for that Answer and for the co-operation we received in coalition to introduce shared parental leave and flexible working. However, these measures are clearly not enough, especially since older women face a disproportionate burden of social care. Will the Minister consider making a manifesto commitment to make all jobs flexible by default to help those with caring responsibilities stay in work and to stop them losing out on pay progression, as recommended by the Centre for Ageing Better?

[Baroness Williams of Trafford]

I certainly agree with the noble Baroness—it is borne out by fact—that women bear the burden of caring far more than men. She is absolutely right about the work that has gone on over the past few years to improve flexible working being offered. As she knows, all employees with 26 weeks’ continuous service with their employer already have the right to request flexible working. That accounts for approximately 90% of employees. That sends a really clear signal that flexible working should be the norm rather than the exception, but we would like to take this further, which is why we are considering requiring employers to say in each job advert whether a job can be done flexibly.

[Baroness Crawley (Lab)]

My Lords, could the Minister say what the Government are doing about the gender pension gap, which is double the pay gap, with women receiving £7,000 less on average than men in their pensions according to House of Lords Library figures?

[Baroness Williams of Trafford]

The noble Baroness brings up a good point on the gender road map, which we are talking about, affecting women as they reach pensionable age because they have fewer years of working service. The new state pension was introduced for people reaching state pension age from 6 April 2016 onwards to provide a clearer, sustainable system for their future. More than 3 million women now stand to receive an average of £550 more a year by 2030 as a result of recent reforms.

[Baroness Sherlock (Lab)]

My Lords, my noble friend Lady Crawley is absolutely right: women’s pension wealth is on average one-third of men’s when they reach retirement age. The Minister mentioned the new state pension system, but many women who are now in their 50s often took time out of the labour market earlier to raise their children only to find that they are carers again, often for elderly parents or sometimes for grandchildren. Under the old pension system, if you took time out for caring responsibilities you could get a credit for not just the basic state pension but SERPS, the earnings-related pension, but under auto-enrolment, if you cannot qualify because you have taken time out of the labour market, you get nothing. What are the Government doing about that?

[Baroness Williams of Trafford]

As I said to the noble Baroness, Lady Crawley, I agree regarding the problems that women face, and, as I acknowledged to the noble Baroness, Lady Burt, particularly when they take time out of work for caring and other responsibilities. However, I must tell her that, in 2012, 40% of women in the private sector were participating in a workplace pension. As of 2018, that has increased to 85%, which is now equalling the participation rate of men.

[Baroness Altmann (Con)]

My Lords, there are a number of ways in which women tend to be losing out in the pension system and in the workplace. Over the last 20 years, the number of women working in their 50s and 60s has increased by 75%. I urge the Minister and the Government to look seriously at ways in which we can help women overcome age and gender discrimination, which still exist in the labour market, and address the pension shortfalls that women face, both in the state pension and the private pension. However, I congratulate the Government on the work that they are doing to improve the situation.

[Baroness Williams of Trafford]

I thank my noble friend for those points and acknowledge that she is far more expert in this area than me. Noble Lords have been talking about women in their 50s; that is the most disadvantaged decade for women in their working lives. In Greater Manchester, which I always like to promote, we have a returners project which will support people over 50, and those with lower-level qualifications, who want to return to work, because they are at even more of a disadvantage. The programme began in June and runs until May 2020. We are awarding money to Greater Manchester Centre for Voluntary Organisation to recruit private sector employees and support them to develop their recruitment and employment practices to make their job opportunities accessible for those returners.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, can the Minister return to the question that was asked by my noble friend Lady Sherlock? Of course, it is to be encouraged that people who previously did not have access to workplace pensions now do, and the numbers are heartening. However, she did not address the question of what those people are going to do about the fact that there is no mechanism for them to make up any shortfall that occurs as a result of them taking up caring responsibilities. Do the Government have any plans to address this?

[Baroness Williams of Trafford]

The noble Baroness is right that years lost in employment will create a shortfall. The Government are trying to create those opportunities, so that women in their 50s in particular can upskill or have other opportunities to enable them to re-enter the workplace.