Equal Pay

Jo Swinson Excerpts

Wednesday 18th March 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Women and Equalities (Jo Swinson)]

It is a pleasure to serve under your chairmanship, Mr Weir. I emphasise the word “man,” because you are the sole male MP in the Chamber. The hon. Member for Banff and Buchan (Dr Whiteford) made a good point that men, as well as women, have an important role in fighting for equality. Such debates answer the question whether having more women MPs makes a difference.

I congratulate the hon. Member for Islington South and Finsbury (Emily Thornberry) on securing this debate and on putting forward an interesting set of proposals into which she has clearly put a great deal of thought. I recognise that equal pay will not be addressed in the next 10 days, but she has started the debate now on what needs to be a careful consideration of equal pay laws and whether they are delivering the outcome that we all want. She wrote an article about equal pay for the New Statesman, and she spoke about it in the international women’s day debate a couple of weeks ago. Her contribution is excellent and welcome, particularly because of her legal expertise. It is good that we have diversity in this place, with some Members having legal expertise and some Members not having legal expertise. As a non-lawyer, I found her speech interesting.

In the hon. Lady’s powerful speech, I particularly loved the example of the fight for equal pay beginning with church choirboys and girls, and quite right, too. She ended her remarks by saying, “Let’s get radical,” and I am open to radical ideas for proceeding on these issues. The legislation, which was of its time, may need to be revisited and addressed. Indeed, this is a particularly timely point to do that because, although the Equal Pay Act was passed in 1970, the provisions were rolled into the Equality Act 2010. The Government are undertaking a thorough five-year review of that Act, which will include the equal pay and sex discrimination provisions, with a view to reporting to Parliament later this year. This is a topical and timely point at which to have this wider debate.

The hon. Lady set out the history of the Equal Pay Act, which came from the battle of the ladies of Dagenham —I agree with the hon. Member for Washington and Sunderland West (Mrs Hodgson) that it was a great privilege to meet them—and addressed blatant pay discrimination. It is important to recognise the difference between the pay gap and pay discrimination because it is easy to muddle the two terms. A casual observer might think they are the same thing, but outright pay discrimination is different from the pay gap itself, which is caused by discrimination, yes, but is also caused by other factors. About a third of the gender pay gap is due to occupational segregation. Typically, an engineer will be paid more than somebody working behind the till in a retail establishment. Women tend to be more concentrated in such sectors and in roles that are less well paid. Roughly about a third of the pay gap is because of time taken out of the labour market, largely because child care responsibilities still tend to fall disproportionately on women rather than men, but it is not solely about child care. There is also caring for elderly relatives and other reasons for time out of the labour market.

Other factors contribute to the pay gap, including pay discrimination and other issues that have been discussed today such as unconscious bias and perhaps the social conditioning of girls and boys. We still live in a very gendered world. A man might negotiate a pay rise in a different way from a woman, and that can lead to problems with the pay gap.

The Government’s record in tackling some of the issues has been positive, although I absolutely accept there is still a long way to go. On occupational segregation, there is a dearth of women in the STEM sectors: fewer than 10% of engineers are women, for example. We have the Eurolife initiative. We have recently published new careers advice aimed at parents, called “Your Daughter’s Future”. Although careers advice in schools is important, it is also sometimes about the messages that girls get at home.

I recently visited some apprentices in the construction industry in my constituency. Only one of the apprentices is a girl. I chatted to some of the young men who are doing their apprenticeships there. I said, “Why did you come to do an apprenticeship in construction?”, and one of the young men said, “My family encouraged me to do this.” He said that he had a sister, so I said, “Did they encourage her to go into construction as well?”, and he said, “No, they encouraged her to do a beauty course.” So the family environment matters. We live in a society with a lot of stereotyping generally, so that guide for parents might break down some of the stereotypes that people have in their minds. They have an image of what engineering is. They imagine someone in oily overalls working in a dirty factory environment, but high-tech modern engineering is a million miles from that. Sometimes people’s ideas about what certain careers entail are stuck in another time.

We have also worked with the Institute of Physics and the Royal Academy of Engineering to get role models into schools. STEMNET ambassadors, 40% of whom are women, do a fantastic job in encouraging girls to aspire and to get involved and interested in the issues. Part of the problem is also the wider cultural issue of stereotypes that start to take root at an early age, before children even start school. Certainly, the Government have a role to play in some of that, but, more widely in society, there is cultural campaigning, and the feminist movement is particularly valuable in addressing that.

We touched on time out of the labour market and the pay gap in the international women’s day debate. The 19% pay gap gives us a part of the picture, but while the pay gap is almost eliminated for women in full-time jobs under the age of 40, there is the massive problem that at that stage in women’s lives pay diverges hugely. A big part of that—not the only part—is about child rearing and the fact that such responsibilities are still shared unequally. That is why I am so passionate about the new shared parental leave laws, which I introduced. For babies due from 5 April this year—some might be born already—their mums and dads will be able to choose how to share the leave. I believe that that will drive radical change, and I want to do everything possible to break down some of the cultural barriers that will stop men taking it up. In year one, a certain number of people will take it up. In year five, it will be more, and in year 10 it will be even more, because this cultural change is happening. It is part of men generally being much more involved in their role as fathers.

In the 1950s, it was very unusual for men—a tiny percentage—to be present at the birth of their child, but that is now commonplace. Men used not to take paternity leave, but now most men take some time off after their baby has been born. I think this tide is going in the right direction, but we need to do everything we can to hurry it along.

[Emily Thornberry]

The Minister is making a very good speech. There is very little that I disagree with, but there is an additional element. Although we should welcome the fact that younger men are prepared to be more actively involved in their role as fathers, they still leave two thirds of the unpaid work in the home to women. Are they hoovering? Are they ironing shirts? Is there anything that can be done to encourage them to do that?

[Jo Swinson]

Shared shirt ironing would certainly be a winning policy for half the population. The hon. Lady is absolutely right. There are the wider domestic responsibilities, too, which are harder to legislate for, but there is interesting research on the harmony of relationships in which domestic chores are spread more equally.

Flexible working delivers two things. If men are more involved in caring responsibilities, it makes it easier for their partners as mums to combine their roles at work with their mothering responsibilities, but it also means that the workplace starts to change, because it is not only women who want something different. Dads are involved in that as well. That means we can start to reduce the parenting penalty. Flexible working becomes more commonplace and much more normal. That is why the extension of the right to request flexible working to all employees is so vital. Although parents already had it, it is about making it something that is not stigmatised and is just a modern, agile way of working.

The issue is not only about children. The hon. Lady mentioned flexible working in relation to carers. We have changed the legislation so that requests have to be considered in a reasonable manner. In the case of an urgent request for a specific issue, it would not be reasonable to wait three months for a decision. We are piloting a wider piece of work on how to get more carers into employment. Many carers want to stay in employment, and there are different ways in which they might be able to be supported to do so. So we will get the results of those pilots in different parts of the country and perhaps move forward.

I agree with the point about unconscious bias and discrimination. The hon. Member for Rotherham (Sarah Champion) said that it should not be the woman’s burden to find out what people are being paid and then take up the fight. I absolutely agree. The pay gap is not the fault of women, but equipping women with the confidence and skills to negotiate hard for a pay rise is also a sensible thing for us to do. So I welcome the guide by the Everywoman organisation that we were able to publish, which sets out basic things that women might consider when they go into pay negotiations and how they might argue for a pay rise. We should encourage women as well as men to develop such skills. The Women’s Business Council will shortly be publishing a guide for business, called “Mending the Talent Gap”, which looks at why, from an employer’s perspective, dealing with the pay gap is important. It looks at what it is and what they can do about it.

On the specific issue about whether all women in the employ of a particular business should be awarded equal pay, it is currently possible for a tribunal judgment to be read across. Certainly, the risk of future pay claims is one that would encourage most employers to do so. What the hon. Member for Islington South and Finsbury said about comparators was fascinating. She raised the point about whether the comparator had to be employed at the same time. During the 2010 discussions on the Equality Act 2010, the Government agreed to Lord Lester’s amendment that comparators are not limited to people working at the same time as the claimant, which is in section 64(2) of the Act.

The hon. Lady also mentioned delays, which relate to the issue about comparators. One of the reasons for a delay is that the reporting and working out of what the comparators are can be a process that takes months on end. Part of that is inherent in trying to deal with 45 years of case law that has built up, but perhaps that is something that highlights the importance of looking again at whether this can be made simpler.

[Emily Thornberry]

The Minister has just made a point about someone taking over someone else’s job and whether a person can say they are being discriminated against if the other is paid more. There is a problem with the Equal Pay Act 1970 and it is in the notes of guidance. Perhaps we can discuss this outside Westminster Hall. I appreciate that if Labour is carrying out a review and the Government are also carrying out a review, and we have highlighted this issue enough, presumably the right people will look at this matter.

[Jo Swinson]

I certainly hope that that will be the case.

The hon. Lady also asked how far back the backdating goes, as the six years is quite a perverse disincentive to companies to get on and deal with this matter. As she rightly said, the potential issue is about a legal issue, in terms of the European Court of Justice ruling. However, it is worth exploring this matter in the review process to see whether anything can be done on it.

As for bogus self-employment, clearly the employment status review that is under way at the moment will look at a range of issues, because bogus self-employment is a problem not only in terms of equal pay but much more widely.

Regarding the pay audits that are in place where a tribunal has found that companies have been found not to have paid men and women correctly, there is redress. The order that was passed in Parliament provides for a £5,000 fine to be imposed for failure to produce an audit, and the audit must be published. The Equality and Human Rights Commission is in a position to monitor these cases and therefore it can pursue an employer further if it suspects that it has not complied properly with what is required of them.

On the particular issue about the exemption if the disadvantages of pay audits would outweigh the advantages, I understand the concern that the hon. Lady raised. Perhaps, however, I can provide some reassurance about the intention behind it. It was primarily put in to avoid the risk that would arise if an employer was close to insolvency, and was told that it had to undertake an audit, the cost of which would tip it into receivership and therefore end up jeopardising the jobs of employees. So it was there for very specific circumstances and not for general circumstances. I hope that she agrees that in the kind of specific circumstance I have just described, the overriding responsibility is to try to safeguard jobs in a business that could still be rescued and that could continue as a going concern. There may be some limited circumstances where that would be the case, but the exemption was certainly not envisaged as a wide exemption.

Pay transparency is hugely important. The hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) raised it, as did others. As for section 78 of the Equality Act 2010, I will put something straight about its chronology, because I fear that history is being slightly rewritten in this debate. In the debates in 2010 during the passage of the Act, it was my right hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone) who made the case for pay transparency. The Labour Government at the time were ultimately forced to take a power in the Act to be able to introduce that. However, the Labour Government at the time said very clearly that they wanted to adopt the voluntary approach first; in fact, they gave an undertaking that they would do so for at least three years before bringing anything else forward. In negotiations within government subsequently, that made it much harder to win an argument to go for pay transparency at an earlier stage. I want that to be clearly on the record and I am absolutely delighted that we are bringing forward the proposal to activate section 78 of the Act, because it is a vital tool to shine a light on the problem.

One reason why some people have not liked that idea is that it will make quite uncomfortable reading for some organisations. That is a very good thing, because they should be uncomfortable about a pay gap, and all credit to the five companies that have gone forward and already published information about their pay gaps. However, when I spoke to some of the people who argued for that action within those organisations, they told me how difficult it was to get it through their own legal departments because they were so worried about the outcome.

One important thing to bear in mind is that a difference in pay does not automatically mean that an employer is discriminating, because there are a range of reasons why that difference could exist. Nevertheless, the point is that having that transparency means that questions can be asked, and that if there are particular reasons why there is a difference in pay they can be set out by the employer. It also means that the employer has to ask questions of itself, so that it can provide answers to those questions, whether to employees, to the media or to customers who may be interested. That consciousness about what is going on is hugely important.

Think, Act, Report is the Government’s initiative, and 2.5 million employees are covered by the 270 companies that have signed up to it. It is worth putting on the record that while it has not delivered significant pay transparency, about half the companies who have signed up are conducting pay audits, and so on; they were just not publishing those audits. Also, the initiative was very much designed to be about things wider than pay. Pay is a hugely important issue, but the initiative is also about recruitment of women, retention and promotion within the workplace—all those different strands of gender equality. While legislation has been needed to force the issue of pay transparency, none the less the initiative is valuable, because companies can share best practice and learn from one another about how to promote gender equality.

All those other elements are important if we are going to solve the issue about the executive pipeline—how we get women into more senior roles and how we address these different issues. Organisations may have problems at the recruitment stage. For some sectors and some companies, that is exactly where their problem lies; their intake of new staff out of education is not equal. However, other companies have an entirely different set of issues. They may have a 50:50 gender divide of their intake, but they suddenly lose lots of women part way through their careers. Last night, I was at the everywoman in Technology awards, where a scary statistic that was given was that 41% of the women who go into work in technology leave after 10 years. So, not enough women are going into that industry—only about 15% of jobs in technology are held by women—and there is also a real problem in retaining women. We need to look at all those different elements of gender equality.

Other issues have been raised today. The hon. Member for Banff and Buchan (Dr Whiteford) rightly identified the cost of child care as a key issue. This Government have taken steps to help to address that issue, which I am very proud of. In particular, we have extended free early years education to 15 hours a week for three and four-year-olds, and indeed to 260,000 of the most disadvantaged two-year-olds, which is 40% of two-year-olds. That is really positive, although I hope we can go further in future; that is certainly what I want to see. I also hope that the Scottish Government can be encouraged to follow suit, because their extension of free early years education to two-year-olds currently reaches only 15% of two-year-olds, so there is a more lot more that we can do on both sides of the border.

[Dr Whiteford]

Of course, the Scottish Government have not over-promised more than we can deliver. That is why we have set those targets. Other parts of the UK have set very ambitious targets but have not been able to meet them. Surely, however, the bigger ambition is to get all children under the age of five into as much child care as their parents need to be able to do a job and fulfil their economic aspirations as well as their child care responsibilities.

[Jo Swinson]

There are two reasons why early-years education is important. One of them is that, regardless of whether parents are working, once children are over the age of two, and certainly once they are over the age of three, there are real developmental advantages to them having some quality early-years education. The second is related to the point that the hon. Lady raises about the child care element; child care can make the difference to whether it works economically for a family for the parents to be in work, and it is important to provide that choice. One of the big issues is the gap that exists at the moment, because if someone has to wait until their child is two before it makes economic sense to go back to work, and if they are going to have more than one child, that situation can suddenly lead to there being four, five, six years out of the labour market, which can have a really negative impact on someone’s career. If someone had wanted to go back to work, perhaps in between having their children, it is a shame if they are not being enabled to do so. That is another issue that the future Government should look at.

The hon. Member for Bolton South East (Yasmin Qureshi) raised a particular issue about employment tribunal fees, and other Members raised it, too. We are absolutely aware of the drop in equal pay claims. In my role as both a Minister at the Department for Business, Innovation and Skills, and the Minister for Women and Equalities, I absolutely understand the concerns that have been expressed. The Government are committed to a review, including on the equality impacts of this policy of having fees and the level of those fees, and on the impact that those factors have on access to justice.

As Members will know, that policy sits with the Ministry of Justice, which has full access to all the data. I am looking forward to that review. From a BIS perspective, we are very keen to be helpful and BIS officials are already looking at the evidence that is available, which has been published by a range of bodies; those officials are analysing the data they can analyse. Of course, when the MOJ launches its review, at least some of the necessary analysis and work will already have been done. As I say, I understand the concerns that have been raised about this issue.

In conclusion, we have had a positive debate this afternoon. Equal pay is an important issue for us to make progress on, and to continue to make progress on. There is a whole lot of food for thought, in terms of how the shape of equal pay law might be fit for the next 45 years.