Equal Pay and the Gender Pay Gap

Cat Smith Excerpts

Wednesday 1st July 2015 Commons Chamber

[Cat Smith (Lancaster and Fleetwood) (Lab)]

I congratulate the hon. Member for Inverclyde (Ronnie Cowan) on an excellent maiden speech and on raising some good points around austerity.

I am proud to speak in support of this important motion. It is 45 years since we passed the Equal Pay Act 1970, but in my constituency of Lancaster and Fleetwood women still earn just 87p for every male pound. I am pleased to note, however, that that is above the national average of 81p, but any gap is too large.

There is a saying that what counts is measured, and what is measured counts. That is why the motion to task the Equality and Human Rights Commission to perform an annual equal pay check to collate and analyse published information, and to make recommendations for action, is so important.

The Equality Act 2010 included rules on pay transparency that would have required employers of more than 250 employees to publish details of the average pay of men and women in their workforce and the gender pay gap. However, when the coalition came to government, it announced that it would not implement the provisions for mandatory reporting, which seems to be a clear indication that the gender pay gap is not important to those on the Government Benches because they did not think that it was important to measure it.

The coalition Government did, however, invite companies to report voluntarily—a policy adopted by only a fraction of companies. Perhaps that explains why the UK performs so poorly on measures of gender pay inequality globally. We have the sixth highest gender pay gap in the EU, and in 2014 slipped out of the top 20 in the global gender gap index for the first time, with the high gender pay gap cited as a significant reason for that.

While Labour was in government, there was a clear focus on closing the gender pay gap and real progress was made. In the five years before 2010, under a Labour Government, the gender pay gap narrowed by 2.4%, but in the past five years, under a Conservative and Liberal Democrat coalition Government, progress slowed and the gap closed by only a further 0.7%.

It would seem not unreasonable, therefore, to argue that the Government, in telling companies that they were not interested in measuring the gender pay gap, were also telling companies that the gender pay gap did not matter. The incentive of public disclosure represented by the reporting measures that Labour included in section 78 of the Equality Act was removed by the coalition Government, the focus on closing the gender pay gap was lost and progress slowed.

Pay transparency works, and it is not a new idea. Countries such as Sweden, Denmark, Finland, Belgium and Australia have gender pay reporting requirements, and they all score better than the UK on the global gender equality index.

The Office for National Statistics reports a rolled-up figure for the gender pay gap, but, as we know, women are over-represented in low-pay sectors and more likely to work part-time than men, so disaggregating the information is vital if we are to understand the problem properly and work out how to address it.

An equal day’s pay for an equal day’s work has been an idea long at the heart of the Labour movement and the campaign for women’s pay equity has crossed into popular culture, with the story of the campaign of the women workers at the Ford car factory in Dagenham being made into not only a film, but, more recently, a west end musical. The story from Dagenham illustrates some of the complexities of equal pay, for it is about not only women being paid the same as men when they do the same job, but recognising that those trades and professions that have traditionally been occupied by women are generally paid less.

Women’s work across the economy is undervalued. We see that in the gender pay gap, but also in the austerity measures of this Government—cutting the funding for public services and then pushing services from the public sector into the charity and voluntary sector, where employees are more likely to be women, wages are more likely to be lower and more work will be unpaid.

This situation only highlights the contradictions inherent in Government policy. Introducing his plans to cut working tax credits, the Prime Minister made the argument that the Government should not be subsidising large companies to underpay their workforce. This is a position I agree with, but for me it has two logical consequences—first, that the minimum wage must be a living wage, and secondly, that organisations funded by any level of government to provide public services must be funded at a level that ensures that each of their workers receives at least a living wage, and preferably one that reflects the skill and centrality of public services to our community.

In conclusion, the UN says that at the current rate of progress it will take Britain another 70 years to close the gender pay gap. That would be another 70 years on top of the 45 years since the Equal Pay Act was passed. Surely 115 years is just too long. It certainly is for the women of my constituency, which is why I support the motion and call on all Members to do so.