Equal Pay

Debate between Jo Swinson and Eilidh Whiteford

Wednesday 18th March 2015 Westminster Hall

[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.

National Minimum Wage

Debate between Jo Swinson and Eilidh Whiteford

Wednesday 15th October 2014 Commons Chamber

[Dr Whiteford]

I want to dwell on equality, because we must remember that the vast majority of people in minimum wage jobs are women. Issues of ethnicity and disability often compound those of gender inequality. Minimum wage jobs are overwhelmingly done by women who are in part-time positions because of their caring responsibilities. Such women are often in sectors with far too much gender occupational segregation, such as cleaning, catering and cashiering. They often have temporary and insecure jobs, and they often work antisocial hours. Other Members have mentioned the problems of exploitative zero-hours contracts.

We cannot separate from this debate the huge impact of gender inequality on wages in this country or dissociate it from child poverty and its long-term impact on our society, which was discussed earlier. We know that children who grow up in deprivation are likely to need the heath service more, to have lower educational attainment and to have much worse job prospects in the long term. Unless we are prepared to recognise that people deserve a living wage to support their families, we cannot begin to tackle the inequality that so dogs our society.

I want to touch on the difficulties of enforcing the minimum wage, which other Members have mentioned. This year, the Low Pay Commission has taken evidence in my constituency, where a significant number of people are in low-paid jobs. Although unemployment is very low in Banff and Buchan—about 1%—a very high proportion of people earn less than the living wage. The vast majority of employers respect employment law and pay at least the minimum wage, but people have nevertheless brought me reports of being paid less than the minimum wage. That issue is extremely difficult to address.

I have been made aware of cases of people involved in the so-called informal economy, as well as in the service sector. They may not have a contract and may not have received pay slips. They know that they are being short-changed and that, in relation to national insurance, they could be losing out on their pensions in the longer term. They are also short-changing Her Majesty’s Revenue and Customs and the rest of us. However, they are reluctant to put their heads above the parapet because they need their job and do not want to jeopardise what little income they have. In a close-knit rural community, they also do not want to be labelled a troublemaker.

Beefing up local authorities’ powers might help, but that is not a real solution. In theory, employees who are being paid less than the minimum wage can pursue legal action against their employer or take them to a tribunal with every likelihood of success, but the reality is that somebody paid less than £6.50 an hour is very unlikely to have the financial means to access the tribunal service or take on the associated legal costs. That is wholly unrealistic, and I hope that the Minister will address that issue and suggest ways round it when she responds, particularly given the changes that the Government have introduced.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I just want to say that any constituent of the hon. Lady, or indeed of any other Member, who finds themselves in such a situation should ring the pay and work rights helpline on 0800 917 2368. They do not need to access the tribunal system; HMRC enforces the national minimum wage on behalf of workers.

[Dr Whiteford]

I am grateful to the Minister—it is very helpful to have that phone number on the record—but my experience, having helped constituents in such a way, is that nothing changes. The Government need to do more on this to make people feel confident about asserting their rights.

I want to wind up quickly by saying that we have reached a situation in the UK where people in low-paid work—