Equal Pay and the Gender Pay Gap

Maria Miller Excerpts

Wednesday 1st July 2015 Commons Chamber

[Gloria De Piero (Ashfield) (Lab)]

I beg to move,

That this House notes that, 45 years after the Equal Pay Act 1970, women still earn on average 81 pence for every pound earned by men; welcomes the fact that pay transparency under section 78 of the Equality Act 2010 will be introduced in 2016; and calls on the Government to ensure that this results in real progress to close the gender pay gap by mandating the Equalities and Human Rights Commission to conduct, in consultation with the Low Pay Commission, an annual equal pay check to analyse information provided under section 78 on pay gaps across every sector of the economy and to make recommendations to close the gender pay gap.

The motion stands in the name of my hon. and right hon. Friends. May I take this opportunity to welcome the new Under-Secretary of State for Women and Equalities and Family Justice? I hope she will put her heart and soul into it and I wish her well in the role.

It gives me great pleasure to have called the debate today on the subject of equal pay. If we boil it down, we see that the cause of equal pay is a matter of simple workplace injustice. It is about people’s basic right to be paid fairly for the work they do, to have the opportunity to move up, and to be able to improve life for themselves and their families, regardless of whether they are a working man or a working woman.

Equal pay is a fight that colours the history of the Labour party and movement, from women tram and bus conductors who went on strike in 1918, to the women machinists in the Ford Dagenham plant. The House first pressed for equal pay in 1944, in relation to equal pay for men and women teachers. The Conservative Member for Islington East, Thelma Cazalet-Keir, inserted a clause in the Education Bill but it was not to be. Churchill was so incensed that he pressured her to withdraw her amendment, telling her, “Now, Thelma. We’ll have no more of that equal pay business.”

Thelma withdrew her proposal, but Churchill agreed to set up a royal commission on equal pay. Four years later, that commission warned that paying women the same as men

“may prove disastrous in the long run even to young and strong women by heavily overtaxing their nervous and muscular energy”.

Thankfully, times changed, and in 1970 Labour’s Barbara Castle ignored those apocalyptic predictions and passed the Equal Pay Act 1970. Until that time, it was commonplace for jobs to be advertised with one rate of pay for a man, and another for a woman. The Equal Pay Act outlawed discrimination in pay and is still used today by women to challenge such discrimination, but it is not enough. Forty-five years on, women still earn on average 81p for every £1 a man earns.

Throughout our history, my party has fought for equality. We fought for the Sex Discrimination Act 1975, which outlawed maternity and sex discrimination; child benefit; the national minimum wage; a year’s maternity leave and the doubling of maternity pay; 15 hours’ free childcare; and the right to flexible working and paid paternity leave. I am proud that my party cut the pay gap by a third during our time in government, but we did not eradicate it.

I am sure the Secretary of State will say in her speech that the gender pay gap is the lowest on record, but I hope she will also concede that, in the past five years, the pace at which the pay gap is closing has slowed. That is why pay transparency is important. When companies publish data on pay, they are often surprised by how few women are in senior positions or earn the same as their male colleagues, and they usually act to change it.

Last summer, we launched a campaign for pay transparency, which called for a small but important action: that the Government implement section 78 of the Equality Act 2010 and mandate big companies to publish their gender pay gap. It is fair to say the Government put up some resistance, despite an excellent private Member’s Bill from my hon. Friend the Member for Rotherham (Sarah Champion). There was a rally outside Parliament led by a truly unusual and exotic coalition—I am not talking about the Prime Minister and the right hon. Member for Sheffield, Hallam (Mr Clegg). Ex-Bond girl Gemma Arterton joined the wonderful Dagenham machinist women, Unite the union members and Grazia magazine readers to call for pay transparency. The Government changed their stance, and I thank them for having the courage to change their mind, because, after all, pay transparency is a pretty humble measure: the simple act of companies that employ more than 250 workers publishing their pay gap. That simple step can help us to take huge strides towards closing the gender pay gap once and for all.

For that to happen, however, the information provided by around 7,000 businesses must lead to change. Transparency is effective only when firms act on the information revealed.

[Mrs Maria Miller (Basingstoke) (Con)]

The hon. Lady is making a powerful speech and some very important points, but she has not touched on a critical factor: for full-time workers, the gender pay gap for women under 40 has all but disappeared.

[Gloria De Piero]

I will come to the way in which full-time and part-time gender pay gaps are measured. I believe there is a flaw in the measurement. An hour at work is an hour at work, no matter whether someone is part-time or full-time. I for one find it peculiar that the Office for National Statistics makes that distinction. Is it because most women are in part-time work? I fear that that is exactly why.

Friends Life, the big insurance company, was one of the first big companies to publish its pay gap. It said that

“what gets measured, gets managed”

and that

“what gets publicly reported, gets managed better”.

In other words, transparency can lead to real and lasting change. We believe it is time to take that principle and apply it to the whole country.

The purpose of the motion is to propose that the independent Equality and Human Rights Commission should be tasked with analysing the information and producing a report to the Government and Parliament each year. It will monitor progress and make recommendations for action. It will act as an equal pay watchdog. An annual equal pay check would be a tool used to measure progress towards the goal of eliminating the gender pay gap in this generation.

By analysing the information, the EHRC could compare progress in different sectors, highlight areas where the gap is unusually high or widening, and identify companies, professions or industries where the gender pay gap is a thing of the past. We recommend that the EHRC draws on the expertise of the statisticians at the Low Pay Commission, because the disproportionate number of women in low-paid jobs is a major factor in the pay gap. Crucially, the EHRC should make recommendations for action, based on its analysis. It could do that by highlighting the best practice it finds in industries and individual companies, because there is not just one reason for the gender pay gap.

Discrimination still happens. I have spoken to women who are senior executives in investment banks and women working as council care assistants who have suffered because of it. Their stories are real and human.

--- Later in debate ---

[Nicky Morgan]

The point of the review is to take account of questions of exactly that kind. It is being conducted by the Ministry of Justice, and I am sure that my hon. Friend the Under-Secretary of State for Women and Equalities and Family Justice, who is also a Minister in the MOJ, has heard what the hon. Lady has said.

Girls often do better than boys at school overall, but evidence shows that their subject choices have a direct impact on their future careers and earnings, and that that imbalance can feed directly into our labour market. A proportion of the gap is also due to differences in years of experience of full-time work, or the negative effect on wages of having previously worked part time or—as was mentioned earlier—having taken time out to look after a family. That highlights the important role that employers can play in supporting women in the middle phases of their working lives by providing effective talent management, facilitating access to affordable childcare, and championing flexible working.

We also know that the gender pay gap is higher for older women. For many of them one of the major challenges is keeping their skills updated, but for others the main challenge is the need to reduce their hours to accommodate increased responsibilities to care for children, grandchildren and ageing parents. Again, employers have a key role, namely to provide a supportive working environment that will enable them to get the best out of all their staff. That will include flexible working.

[Mrs Miller]

The Secretary of State has mentioned older women. I recently looked at some statistics relating to women graduates. For more than 25 years more than 40% of university graduates have been women, and today there are female undergraduates in 53% of the Russell Group universities, which are the best in the country. Given those figures, is the Secretary of State as surprised as I am that fewer than 10% of executive positions in FTSE 100 firms are taken by women?

[Nicky Morgan]

I am delighted that my right hon. Friend is to be the first Chair of the Women and Equalities Committee. Yes, I am surprised, but I suspect that we all have friends who, although they were just as capable as us at university, did not decide to pursue a career for some reason, or are not as far up the career ladder as we might have expected them to be. I also suspect that that does not apply to all the men whom we may have known at university.

--- Later in debate ---

[Mrs Maria Miller (Basingstoke) (Con)]

It is a pleasure to follow the hon. Member for Lanark and Hamilton East (Angela Crawley) and no one could doubt her commitment to these issues. I also wish to congratulate the hon. Member for Ashfield (Gloria De Piero) on securing this important debate. Everyone can see from the level of participation so far that there are many Members who are interested in contributing, so I will try to keep my comments as brief as I can.

It is important that we recognise the achievements that have been made in reducing the gender pay gap not just by this Government but by other Governments over recent years. If we go back to 1992, when Baroness Shephard first became Minister with responsibility for women, we can see that we have made enormous progress, and that is coming out in some of the statistics that have been rehearsed today.

As I said earlier, the gender pay gap has fallen dramatically in full-time jobs for people under the age of 40. Although regional and industry variations still exist, it is important that we acknowledge the progress that has been made. Indeed, the full-time pay gap is the lowest and narrowest since records began. Progress has not been as good, however, for those in part-time work or those over the age of 40. It is on those two matters that we need to focus. I will try to have a conversation with the hon. Member for Ashfield about this later, but I am not sure that removing the segmentation of the data would give us the clarity we need in trying to find the answers to some of these problems.

It is right that every woman in this country should have the same right as every man to a job that uses their talents and does not marginalise them simply because of their gender or their caring responsibilities. The policies put in place over the past five years by the coalition Government have created momentum for further progress in the next few years. The modernisation of the workplace will help women across the board, whether through the support for career choices mentioned by my right hon. Friend the Secretary of State, such as the “Your Life” campaign, or through parental leave, the right to request flexible working, or tax relief on childcare. All those things will help to give women the same sorts of opportunities as their male counterparts and I applaud and welcome all of them, but I think that all right hon. and hon. Members in the House today will agree that there is an economic and social justice imperative to continue to tackle the gender pay gap, which is why I welcome today’s debate.

To put it simply, girls outperform boys throughout the education system and have done so not just for years but for decades. We are selling the country short by not allowing the best people to do the best job that they can. More than 60% of female youngsters get five good GCSEs, 10 percentage points higher than boys. Today, 29% of girls and 19% of boys achieve the EBacc. Girls outperform boys in English and maths at school and, as I said earlier, 53% of Russell Group university undergraduates are women. More women get first-class degrees than men and 70% of law graduates are women, yet just 20% of judges in this country today are women.

That has not happened just over the past few years. For more than 15 years, more women have gone to university than men and 25 years ago, when perhaps many of us were in university, 40% of university graduates were women—and they are in their late 40s today. We have an enormous talent pool that is alive and kicking, and we should do everything we can to use it in a country that is enjoying renewed economic success.

The Secretary of State talked about the causes of the gender pay gap and she is right that career choice is important, as is time out of the labour market. Some of the changes that have been made will help to fix those causes, but there is much more to do. I want to close by focusing on three different areas and I hope that when the Minister responds she will be able to reflect on them a little more.

The first is the importance of part-time and flexible working and ensuring that there are more opportunities for skilled part-time working. I have some sympathy with the Opposition’s motion today—although I think the Secretary of State is right that it contains some flaws—but we need to understand the data on flexible working. Indeed, the Business, Innovation and Skills Committee produced a report in 2013—I think that the Secretary of State might have been a member of the Committee at around that time—that recommended that more data needed to be collected on flexible working and part-time working. I would be interested to know what progress the Government are making on collecting and publishing data on working practices in that area. The Committee also asked the Government to consider their data collection. In 2013, just 3% of Foreign Office staff worked flexibly, whereas about 40% of Department for Work and Pensions staff did so. Collecting data is important. Are we really confident that we have the data available to understand where part-time working occurs and how successful it is?

My second point relates to older women in the workplace—something that the right hon. Member for Slough (Fiona Mactaggart) mentioned in her intervention. An enormous amount of change is going on and there is good momentum, but I would be concerned if anyone felt that the momentum that we see in younger women’s working practices will simply work its way through the system because I do not believe that that is true.

Some good work has been done, again, in the DWP on the challenges that older women face, particularly with work opportunities. It is particularly telling that in 1983 the British social attitudes survey showed that 13% of women aged 45 to 64 thought that employers gave them too few opportunities when they got older; today, the figure is 71%. Older women are not seeing opportunities to get back into employment, and they find it difficult to balance employment with their caring responsibilities. The carers pilot was an incredibly important piece of work to put in place. I hope that the Minister can tell us about the pilot’s findings and say when an action plan will be produced.

Finally, the role of women in senior management has been rightly a focus for many Ministers in recent years, and I am sure that we would all commend the Davies commission report, which has done so much to promote women’s involvement in non-executive positions on boards.

[Hannah Bardell]

The right hon. Lady makes a point about women in executive positions. Before I came to the House, I worked for an oil and gas services company where I was one of three women in a senior leadership team of 23. Does she not think that we need to do even more to encourage women into those executive positions, including by extending childcare, to which the Scottish Government have given a lot of support?

[Mrs Miller]

Governments across the United Kingdom will support women reaching their potential in whatever position they take. Certainly, in executive positions, that is important, but there has not been enough focus on executive, as opposed to non-executive, positions. The Fawcett Society is right to question whether unconscious bias is at play here, particularly in respect of the work that executive search firms could do to enhance the number of women candidates put forward. That is another area of work that the Government need to continue to make progress on.

Today’s debate is incredibly important, but we would be wrong to think that it will produce the progress that we need if we say that it is just about monitoring data or putting in place commission reports, although I know that that is not what the hon. Member for Ashfield is talking about. We need a culture change, which needs to be driven by changing working practices and by the sort of things that the Government have been doing in recent years.

[Several hon. Members]

rose—