Women’s Contribution to the Economy

Debate between Caroline Spelman and Baroness Burt of Solihull

Thursday 6th March 2014 Westminster Hall

[Mrs Caroline Spelman (Meriden) (Con)]

I thank all hon. Members who have asked to speak in this debate. It is the tradition of our Parliament to have a debate as close as possible to the date of international women’s day, which is on Saturday, so Thursday afternoon is as close as we can get. I am grateful to the Backbench Business Committee for acceding to the cross-party request to hold this debate today.

I will focus particularly on the global female economy. Women’s contribution to the economy is topical as the world digs its way out of the global financial crisis. It will be vital, if we are to consolidate economic recovery, for women around the world to participate in their economies. Research published by the Boston Consulting Group last September suggests that over the next five years, women will add $6 trillion to global earned income, which shows the size of the contribution that they already make and the scope for much more.

Both genders need to be active in the economy for GDP to grow to its full extent. An International Monetary Fund report also published last September noted the potential for macro-economic gains if women develop their full labour market potential. GDP per capita losses as a result of gender gaps in the labour market are estimated to be as high as 27% in some countries. The new Prime Minister of Japan took the World Economic Forum by storm this year when he said that if Japanese women were fully active in his economy, his country’s GDP would grow by 16%, that he sees that as absolutely key to the future of Japan, and that he intends to legislate for a target of 30% of leading positions in his country to be filled by women.

In developing countries, gender inequalities are often even greater than in developed countries. In 2013, the IMF cited studies estimating that of the 856 million women worldwide who have the potential to contribute more fully to their national economies, 812 million live in emerging and developing nations. India is one example. India has had, as role models, a famous female Prime Minister in Indira Gandhi and a female President, Pratibha Patil. However, the female participation rate in the labour force in India has stayed at around 32% since the turn of the century, and female wages in India have declined to an average of just 26% of men’s.

There are some important global initiatives to tackle such issues and realise the gains to be had from increasing female participation in labour markets. For example, Coca-Cola began its 5by20 initiative in 2010. Coca-Cola has pledged to empower 5 million female entrepreneurs around the globe by 2020 by increasing their access to business skills training courses, financial services and networks of mentors. The company employs 770,000 people directly and 10 million indirectly in its supply chain. Programmes are now running in more than 20 countries, including Haiti, Thailand, Liberia and Ethiopia, and will create a whole new generation of female entrepreneurs.

[Lorely Burt (Solihull) (LD)]

We need not look only to developing countries: the number of female entrepreneurs in this country is about half the number in America. If we are talking about growing the economy, would we not solve our economic problems at a stroke if more women were encouraged to create companies, wealth and jobs?

[Mrs Spelman]

The hon. Lady and I share a great interest in the role of female entrepreneurs in our regional economy. If she waits a short while, I will come to exactly that point.

Charities are also running initiatives, such as Oxfam’s gendered enterprise and markets programme. Oxfam works with vulnerable farmers, especially women and mothers, helping them grow and sell more by supporting them to establish producer groups. In that way, female farmers can pool their resources and sell their produce in bulk to get a better price, enabling them to increase income and gain equal status in their homes and communities.

A couple of weeks ago, during the recess, I saw another example of an initiative to empower women when I visited Bangladesh in my capacity as vice-president of Tearfund. The charity is working in partnership with other non-governmental organisations to undertake capacity-building programmes in flood and drought-prone parts of the country, as well as empowering women in village communities to take over and improve their own situation, not necessarily by giving money directly but by building capacity. I saw women there being taught to use kitchen gardens to grow vegetable crops that they would otherwise pay a great deal to buy imported from India. It was a joy to behold the light that shone out of their eyes and their pride in improving their circumstances. They might be illiterate, but their daughters will be able to get a university education, and the resources that they had secured through better farming were ploughed into the needs of their local community.

I also discovered in Bangladesh the role played by the central bank there. Its governor, Atiur Rahman, has at heart a desire to make his country more sustainable and to help the women there become more sustainable. He has granted a mobile bank account to every female garment worker in the country for next to no charge, meaning that those women can return their income directly to mum and dad back home in the village without a middleman taking a cut. Those are examples of creative ways to ensure in developing countries that women play a much more active role in their economy.

As for the UK, Office for National Statistics figures published last month show that female employment in the UK is at its highest level since records began. It now stands at 62.7%, compared with 53% in 1971. Women now account for 46% of the UK work force. Figures from January 2014 also show that 20.4% of FTSE 100 directors are female, compared with 12.5% in February 2011. Progress is being made in those areas, but there is definitely still further to go.

Turning to my regional interest, which I share with my hon. Friend the Member for Solihull (Lorely Burt), I am disturbed to read that there are serious geographic imbalances in female participation in this country. The lowest employment rates for women are in Birmingham, where the rate is 50%; Nottingham, where it is 54%; Coventry, where it is 55%; and Leicester, where it is 55%. That means that they have a higher than average proportion of women not actively employed in the economy. I fully understand that that might be linked to the ethnic make-up of those cities, but none the less, it is disappointing to find that the midlands cities, which are at the heart of the manufacturing renaissance that we are enjoying, have such low levels of female participation compared with other cities.