Promotion of Women in Business

Nia Griffith Excerpts

Tuesday 22nd March 2011 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

I warmly congratulate the hon. Member for Maidstone and The Weald (Mrs Grant) on her excellent opening speech and on securing the debate. I thank the many Members who have contributed in a positive way. There is much that we can agree on in terms of the need for encouragement, mentoring, sponsorship, role models and enterprise awareness, and those are very much the steps we need to take.

Ensuring that women can participate as fully as possible in business and enjoy full recognition of their abilities and potential is vital not only to promote a more equal and just society, but to make the best possible use of their skills to increase wealth creation and make a more prosperous society. Women are, of course, involved in many different types of business, from the self-employed woman who works just a few hours a week to the woman with the busy corner shop or the woman working in the very largest of companies. Many of the difficulties they face are not necessarily specific to women. Generalisations over the huge diversity of business can be misleading, and there are, of course, many excellent examples of good practice and success stories.

Over the past 30 years, women’s employment has significantly increased and women are making a greater financial contribution than ever to family incomes. Therefore, it is not surprising that more women’s jobs, particularly jobs in the service sector, have been affected in the current economic crisis than in previous recessions. With the expected job losses in the public sector likely to affect women disproportionately due to the high concentration of women in the public sector, it is important that the Government do more than simply hope that the private sector will grow. There needs to be a clear strategy for growth and encouragement for women to take up jobs in the private sector, particularly those who have not worked there previously.

During Labour’s time in office, we introduced measures that have supported women. We extended maternity leave and introduced paternity leave. We also introduced the right for parents and carers to request flexible working, and many speakers today have mentioned its importance. There is more to do to ensure that employees and employers are aware of the right to request flexible working. It can be daunting to be the first in a workplace to make the request. Many women are worried that such a request might harm their career prospects or make them look half-hearted about work. Properly managed, flexible working, such as changes in working hours to allow a parent to drop off children at school in the morning, can result in the mum or dad feeling much less stressed and better able to concentrate on their work. For some women, it can make the difference between continuing in work and having to leave a job.

[Lorely Burt]

I agree with all the points that the hon. Lady has made. Is it not good that the Government are introducing flexible working for everyone, because that deals with the stigma of asking? Anyone can ask for flexible working, whether they are picking up their children or going to the golf course, so it is seen as part of the norm and not a condescension for someone because they happen to be a parent.

[Nia Griffith]

Indeed, the opportunity to have flexible working is extremely important. That is why it is particularly perturbing that news is coming through of an exemption for microbusinesses. That effectively denies employees in businesses with fewer than 10 employees the right to request flexible working. I question the Government’s rationale for making that exemption. They seem to be saying that denying employees that right will somehow stimulate growth in the economy.

If we cast our minds back a few years, we will remember that the Prime Minister, in his speech to the 2007 Conservative party conference, spoke about flexible working:

“Companies that have adopted this have found that they are able to grant the request in the vast majority of cases, they have actually found that productivity has gone up, profits have gone up, staff morale has gone up and keeping staff is easier.”

So what exactly has changed? Will the Minister explain what sort of analysis his Government have done that suggests that flexible working hampers growth? What economic impact assessment did his Government do before deciding the exemption for microbusinesses? How will this move impact on women in business? How is it compatible with the Prime Minister’s promise when he was in opposition that a Government whom he led would be the “most family friendly ever”?

The loss of the right to request flexible working will affect both men and women, but at the moment, it is likely to affect women far more widely than men. It will be yet another obstacle to women being able to combine work and family responsibilities. It might mean some women giving up work altogether, or it might deter women from seeking promotion. Was an equalities impact assessment undertaken on the exemption decision, and if not, why not? We are getting used to the Government breaking promises, and that action is usually accompanied by some sort of lame explanation, so I am curious to learn how denying employees the right to request flexible working will stimulate growth in the economy. To most people, it just looks like a backwards step.

When in office, the Labour Government introduced the Equality Act 2010, which not only streamlined the law by replacing nine major pieces of legislation and around 100 statutory instruments with a single Act, but introduced measures to create a more level playing field and make life fairer for women. Those measures include requiring gender pay reports, using public procurement to improve equality, extending the use of positive action in the workplace, and protecting carers from discrimination—although that, of course, applies equally to men and women, the reality is that women are more likely to be carers. Can the Minister confirm that his Government will implement in full all the measures in the 2010 Act?

We, on the Opposition Benches, welcome the work undertaken by Lord Davies of Abersoch in producing the Department for Business, Innovation and Skills report, “Women on Boards”. In particular, we welcome his recommendations that UK-listed companies in the FTSE 100 aim for a minimum of 25% female board member representation by 2015, that FTSE 350 companies set their own challenging targets to ensure that more talented and gifted women can get into top jobs in companies across the UK, and that those targets be set in the next six months and chief executives review the percentage of women they aim to have on their executive committees in 2013 and 2015.

The question is how we ensure that companies really make progress. The lesson from Norway, which is often quoted as having 40% women on boards, is that it does not happen simply by exhortation. That was tried first, but it took quotas to achieve the 40%. It is not nice to be accused of being on a board solely to make up a quota or to be used as a symbol that a company is addressing gender equality, but companies need to ask themselves exactly how appointments to boards are made. Does the process stand up to scrutiny? Is the best person for the post appointed? It may be that the best person for the post may not even be encouraged to apply. I hope that the recommendations in the report will make companies look very carefully at the whole pattern of promotion within the organisation, as many hon. Members have suggested, and identify whether there are factors, such as particular types of socialising after work, which tend to exclude women. It may be that much more subtle forces are at work, which amount more or less to that well documented tendency to select people like oneself.

What exactly will the Government do to ensure that the recommendations in Lord Davies’s report are fully implemented? Will the Government require companies to disclose each year the proportion of women on boards and in senior executive positions, and the proportion of female employees in the whole organisation, as recommended by Lord Davies? Will the Government insist on the disclosure of meaningful information about the company’s appointment process, as recommend by Lord Davies? How will the Government take forward the recommendation that a

“combination of entrepreneurs, existing providers and individuals needs to come together to consolidate and improve the provision of training and development for potential board members”?

The situation of part-timers needs particular attention. Some women find that they need to go part-time to combine work and a family. Other women would like to work part time, but are afraid of the consequences of doing so, knowing that too often going part time will set them back a long way in the pecking order. I have employed women part-timers, and have always found that their attitude to work is anything but part time. They invariably give over and above what is required for the hours they work. We need companies to take a serious look at how they deal with employees, largely women, who are working fewer hours than the full working week. Are they included in decision-making meetings? Are they encouraged to further their careers and seek promotion while remaining part time? Are they given training opportunities? Are they allowed to work part time only if they can find a person with whom to job share to replicate the exact pattern of a full-time post? Is part-time working considered appropriate only in the lower ranks of the company?

What is happening in other countries? In Spain, gender equity laws passed in 2007 obliged IBEX 35 firms to get a minimum of 40% women on boards in eight years. France passed a Bill applying a 40% quota for female directors by 2016. In Germany, the Justice Minister has threatened legislation if boards do not achieve a better balance in the next 12 months. Can the UK also move forward and can that be done without introducing quotas? Will the Government give companies sufficient encouragement to make the necessary changes voluntarily or will we find ourselves back here in two, three or four years’ time ruing the lack of progress?

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)]

This has been an excellent debate, and I congratulate my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) on securing it. We heard some powerful speeches, in which Members showed their experience and knowledge of the matter.

One of the key things mentioned by my hon. Friend, which was picked up by others, is that it is not only about equality but about business performance. I shall stress that aspect because I believe that the issue is about growth. We have the Chancellor’s Budget tomorrow. I believe that the Budget and other such measures are aimed at improving corporate performance and thus the performance of the wider economy.

My hon. Friend spoke of the extra benefits and skills that women bring to the boards of our great companies—their attitude to risk, how they manage employees and how they think about customers. She was right to say that the studies cited in Lord Davies of Abersoch’s report and elsewhere are unequivocal on the subject. The evidence is unambiguous that having more women on boards improves corporate performance.

The debate focused on the leadership of women on boards, following Lord Davies’ report. It was good to see such widespread welcome for his report. We also heard about practical support for women and families in the workplace and about supporting women entrepreneurs. I shall try to cover all those aspects. Before doing so, however, I make two further comments on my hon. Friend’s speech.

First, my hon. Friend reminded us of the Prime Minister’s aspiration for a third of Ministers to be female by 2015. Her speech may be an early suggestion that she is heading for promotion. Secondly, she made the important point that men need to listen to women in this debate. One of my favourite books when reading on the subject at university was a book about men and women in conversation called “You just don’t understand me” by Deborah Tannen, a socio-linguist. Listening to each other, particularly across sectors, is most important. We need to understand each other.

It is not only about listening in this debate, as we try to improve business and Government performance on the matter, but about putting that message across in the workplace, with employers and employees listening to each other and having grown-up, adult conversations. Indeed, many of the concerns that lie behind what was said this morning can be addressed in a way that does not require legislation or regulation. My hon. Friend spoke well and to the point.

Many Members spoke of legislation and non-legislation, and it is important that we realise the power of the nudge—the power of the non-legislative approach. That is one reason why I was keen to publish what has been called the employers charter. It sets out what employers can do under current legislation, and gives examples of the sort of conversation that employers are allowed to have with their employees—for example, about maternity leave and workers’ plans. It is important that we change some people’s perceptions about employers. Actually, employers have rights if they behave reasonably, and they can therefore work productively with their employees.

Right-to-request legislation, which was mentioned today, is a sort of nudge. It is about enabling employers and employees to have a conversation about flexible working. I have some concerns about the way in which the previous Government implemented right-to-request legislation. They took a prescriptive approach, and some employers find it rather regulatory and over the top. However, the Government are committed to right-to-request legislation. We will consult on it in due course. As I made clear in a written statement—

[Nia Griffith]

Will the Minister give way?

[Mr Davey]

In a moment, but first I want to reply to my hon. Friend. The hon. Lady may want to intervene if she does not like my answer.

When we consult on extending the right-to-request legislation to all employees, we will also consult on whether there should be an exemption for micro-businesses. That may be appropriate because conversations are more easily had in small businesses. As my hon. Friend the Member for Skipton and Ripon (Julian Smith) said, by and large smaller firms are better at having such conversations than larger companies. We will listen to people when we consult; the hon. Lady may believe too much of what she reads in the papers.

[Nia Griffith]

The question is whether people have the right to request flexible working. As everyone who has spoken today has been very much in favour of the right to request it, and as no one is obliging anybody to grant it, what is the difficulty with insisting that micro-businesses do the same as every other business?

[Mr Davey]

The hon. Lady anticipates our consultation document. I believe that we will get the balance right, and better than the previous Government did; their approach was over-prescriptive. Indeed, that points out one of the differences between the two parties. I regret to say that for the vast majority of this debate, the hon. Lady was the only Labour Member here, but the Labour Government seemed often to think that the only way to secure progress in this area was through regulation and legislation. Sometimes that is needed, but it is often not necessary. For example, the employee engagement taskforce led by David MacLeod and Nita Clarke, which is business-led and is trying to promote best practice in employee engagement, and the employers charter that I mentioned earlier both take a non-legislative approach, and that can have a big impact.

Other questions raised this morning relate to the wider debate, particularly on how to take forward Lord Davies’ report. That report focuses not only on Government but on companies, their chairmen and chief executives and on the head-hunting industry. However, it recommends how the Government should ask quoted companies to report on their performance on this matter. We will be publishing proposals on improving narrative reporting following our consultation—the document was published in July 2010—and that issue will be included. I assure hon. Members that the Government strongly welcome the report, which paves the way to massive improvements in this important matter, on which the previous Government did little.

The hon. Member for Llanelli (Nia Griffith) asked whether the Government were taking forward measures in the Equality Act 2010, but she may have missed the fact that most of its provisions were brought into force on 1 October 2010. We have concerns about one or two areas, particularly to do with section 78, which provides for mandatory reporting on gender equality, and we are working with business to see whether we can take a voluntary approach, which we think is right. While we engage with business on that matter and try for a voluntary approach, we will not commence, amend or repeal section 78.

Another matter raised by the hon. Lady was that child care is inadequate and often unaffordable. I am proud to say that, in the spending review, the Government did not merely maintain spending on that but increased the opportunity for child care, particularly for the young of deprived families. Our commitment in that area is strong.

That brings me to the debate about maternity leave, paternity leave and parental leave. We will be consulting on that later this year. We already have a lot of legislation on the matter, but it does not work terribly well. It is inflexible, gender-biased and it does not work with the grain of many companies. Our consultation paper will take forward the coalition agreement, and I believe that we can achieve a win-win by making things more flexible for employees and employers. We want them to work better together to ensure that we have more family-friendly workplaces, but that it does not come at a cost for employers.

It has been an excellent debate. I pay tribute to my hon. Friend the Member for Maidstone and The Weald. I believe that the House could play a critical role. I do not know whether we could go for the Select Committee option put forward by my hon. Friend the Member for Skipton and Ripon, but I am sure that he will want to raise the matter with the Leader of the House. It certainly received support this morning.