Equal Pay and the Gender Pay Gap

Rebecca Pow Excerpts

Wednesday 1st July 2015 Commons Chamber

[Nicky Morgan]

Thank you, Mr Deputy Speaker.

I congratulate Blandford school, in my hon. Friend’s constituency, on its initiative. There are indeed many people who can inspire pupils of all ages by telling them about the career choices that are available to them. I know my hon. Friend’s three daughters well, and I know exactly who wears the trousers in his household.

Let me now make some progress. I was talking about seniority. As we know, women are still less likely to progress up the career ladder. They represent 47% of the work force, but only 34% of managers, directors and senior officials. We also know that women are sometimes not as well paid as male colleagues even when they achieve similar seniority. That may, of course, be the result of direct discrimination—which, as I have said, is already illegal—or it may be more subtle, and reflect, for example, men's greater willingness to negotiate pay rises. Either way, on this issue, the existing legal protections have a clear role to play. However, I hope that I have made it clear that the causes of the pay gap are complex. The response from Government and employers must therefore reflect that complexity and avoid over-simplifying the issue, which unfortunately still happens. That is precisely why under this Government we are taking action on all fronts. It is why we are taking action to raise girls’ aspirations, to support women with childcare and to get more women up the career ladder.

Our efforts must start early. I am passionate about the work we are doing to raise aspirations in schools and to ensure that no child, regardless of their gender, race or background, thinks that some careers are not for them.

[Rebecca Pow (Taunton Deane) (Con)]

On that note, does my right hon. Friend think we should provide more careers advice in schools, particularly through businesses and engineering companies? Should not more advice be provided on science, especially in relation to the STEM subjects? We can then help women to progress up the career ladder in those areas where we have a gap, and perhaps role models would be helpful.

[Nicky Morgan]

I thank my hon. Friend for her intervention. She might have seen an advance copy of my speech, because I am going to talk about careers advice. Perhaps I should just press-release it and then we could move on with the debate.

We are broadening the career aspirations of girls and young women by encouraging them to get into STEM-related careers through the “Your Life” campaign. As we have already discussed, we have also published new guidance for parents, “Your Daughter’s Future”, which we will continue to promote.

As hon. Members have said, support with careers is vital. That is why in December last year I announced a new careers and enterprise company, to be led by employers and independent of Government. That company will help to transform the provision of young people’s careers experiences. It will help to ensure that all young people, irrespective of gender or background, aspire to great things and know how to achieve them. I am delighted to inform the House that Claudia Harris, a former partner at McKinsey and a graduate of Harvard Business School, has been appointed chief executive. Claudia is exactly the role model schools and businesses need, with her passion for female leadership, her drive to excel and to make a difference. I should of course also mention the fabulous chairman, Christine Hodgson. As I always say, if you want something done well, ask women. That is nowhere more true than with the England women’s football team. I am sure we all wish them every success in tonight’s match.

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[Emily Thornberry (Islington South and Finsbury) (Lab)]

Reference has been made to one of my predecessors, a Member of Parliament for Islington East. Perhaps, as the first woman to represent Islington South and Finsbury, I should point out that my constituency incorporates Islington East. There was a time in the 1930s, I must confess, when the good people of Islington East were so keen on women MPs that it once had a Tory representative—and she was a woman. Given what she was up to, it seems that she was not necessarily a traditional 1930s Tory: she was very interested in women’s equality.

Let me turn to more general matters. Those who will read the report of our debate may not fully appreciate this, but a large group of female Conservatives have been sitting together throughout, although not all of them have spoken. They have made one mistake, however, and I urge them to think about it. They are sitting on the wrong side of the Gangway. I am told that in 1997, when a large number of new Members arrived in the House, those who sat on the Government side of the Gangway were promoted, while those who sat on the other side were not. So girls, move over there so that you can get yourselves promoted. I am just trying to be helpful.

[Rebecca Pow]

I have been wondering what a traditional Conservative woman is.

[Emily Thornberry]

I do not think it would be a good idea for me to rise to that question. I have only 10 minutes, and I want to make some important points about equality, particularly women’s equality.

I think that, when the Equal Pay Act 1970 was passed, Barbara Castle was right to describe it as a

“historic advance in the struggle against discrimination in our society”.—[Official Report, 9 February 1970; Vol. 795, c. 914.]

Unfortunately, however, it has not stood the test of time. In those days, there was blatant and obvious discrimination between the sexes. It was easy for an individual woman to take her case to a tribunal, point to the man who sat at the desk next to hers and who she had realised was being paid more than her, and prove that she had been discriminated against; but time has moved on, and we now need legislation that is not simply reactive. We cannot rely on individual women to root out evidence of discrimination and take their cases to a tribunal. Besides, the process has never been more difficult, not only because tribunal law has become so complex—many cases continue for as long as seven years—but because tribunal fees are at such a level that it is no surprise that there has been a 79% drop in the number of equal pay claims. Those fees have rightly been described as a tax on justice.

However, there are more fundamental problems. I think that we need to look at a new type of legislation that has begun to be introduced and that can be very effective. Conservative Members had better take a deep breath, because I am about to mention the Human Rights Act, a proactive piece of legislation with a beating heart which could be moved to the centre of our constitution and ensure that work was done properly. Another proactive piece of legislation is the Bribery Act 2010. Under that Act, a company has to prove that it has structures in place to manage things in such a way that, if a person is bribing someone else, they are acting as a lone wolf and the company has done everything it can to stop it. It has resulted in a culture change in our companies, which is very much to be recommended.

A new equality Act could do the same thing. Our current Equality Act does not do that. It has failed to foresee the fragmentation of pay-setting, even within an organisation. It has the most ridiculous loopholes. For example, if I as a woman were to leave a job because I felt that I was not being paid properly and was being discriminated against, but I did not want to take the matter to a tribunal, and then I realised that, to make matters worse, I had been replaced by a man, who was not being discriminated against and was being paid more than me for doing the same work, I could not use that as evidence that I had been discriminated against. How crazy is that. We need to look again at some of these ridiculous loopholes.

It is to be applauded that we are looking further at pay transparency, but that is not in itself sufficient. The Equality Act is up for its five-year review. The Government have said that they are looking again at whether the Act has achieved its stated aims. The Under-Secretary of State for Women and Equalities and Family Justice has said that

“Parliament will consider this information before deciding whether to gather further evidence on how the Act is operating.”

However, it seems to me that we should introduce a new Bill. As Barbara Castle rightly said:

“I have no doubt that some employers will try it on…undoubtedly, pockets of discrimination will remain—unless women organise to put a stop to it.”—[Official Report, 9 February 1970; Vol. 795, c. 928.]

So let us do that. Let us organise and stop it.

A new Act should be proactive and not reactive. I strongly suggest that successful claims should trigger a mandatory company-wide audit, including proper job evaluation studies. That does not just mean listing what the women get paid, what the men get paid and what the different jobs are. We should be drilling down into companies and looking at what skills are being used, what the women are doing compared with the men, and seeing whether there is systemic discrimination in a company. It would be right for tribunals to be able to trigger that. It could be done before the case even gets to the tribunal, where there are negotiations before the case officially kicks off. However, it should also happen afterwards if a claim against an individual is upheld.

There should be a flipside to that. If a company has done a proper, deep and profound voluntary audit, that should be a prima facie defence against any equal pay claim. We need to do this by way of carrot and stick.

Other things need to be done. There has been a chilling effect on some negotiations because of widely publicised cases in which trade unions have negotiated with an employer to try to get rid of discrimination within a company and to introduce equal pay, only to find that many of the women feel that the settlement has not been sufficiently fair, and the trade union has ended up being sued itself. New legislation could include guidance so that everyone knows where they stand and where their settlement should end up when trade unions and employers negotiate. That again could be a prima facie defence against any equal pay claim.

At the moment, legislation is too complicated, and the tribunal process is too obscure, too difficult and takes too long. It seems to me that many people are running away from using our tribunals and any legal process to enforce equal pay. Good as it was at the time, it seems that the 1970 Act is not fit for the 21st century, and we need to look at it.

Not only should we have new codes of practice so that the parties know what is expected of them, but we need to streamline our tribunal process and bring in experienced, senior judges to adjudicate more complex claims—those cases where preliminary issues get appealed and go back to the tribunal, and then another preliminary issue is taken up and appealed. For that reason, these cases can take seven years. It is not right. The current process is not fit to do what we want it to do.

We should look again at introducing questionnaires. Why have the Government stopped the process whereby, if a woman makes a claim against a company, the company is supposed to answer a questionnaire to give proper information on the practices within the company? The Government said that they were cutting red tape. That is one way of looking at it, but another way is that they disempowered women from taking their equal pay cases to tribunals. If we are looking again at what we should do with tribunals, we should reintroduce the questionnaire. We can make it two pages if we are worried about it being red tape, but we must ensure that that short-form questionnaire includes important information such as, “Has the company been sued before? Have you done a proper audit? When did you last do a proper audit?” Women will know exactly where they stand before they begin the process of taking a case to a tribunal.

I have talked about the ridiculous loophole whereby if I am replaced by a man I cannot use that as prima facie evidence to show that I was discriminated against. I feel very strongly about this issue. I have written extensively on it. For those who are interested, I have written on “Comment is free”, there is a long article in the New Statesman, and those who are really techie can go to my website.

A new Act will not, of course, solve all the problems. We cannot have equality without proper flexible working. I say that as a mother of a precious daughter, but also of two precious boys. I want my boys to be fathers and to be able to look after me when I get old, and to be able to balance their work and family life, and for their family life to be as important to them as it will be, I hope, to my daughter. When we talk about women’s liberation, we must not leave the men behind, because this should be about the liberation of all of us. Flexible working is very important for us all.

We should also look at the fact that women tend to cluster in certain professions. We may have left the kitchen, but we have not gone very far. The majority of us still do things like cleaning and cooking, secretarial work, nursing and looking after children. Those are the main sorts of work we do, and, guess what, it is seen as women’s work and, guess what, it is not paid as well as men’s work. We have to look at that if we are serious about equal pay. The importance of proper careers advice for boys and girls has been mentioned, and understanding the careers available in STEM subjects is particularly important.

These are long-term goals. Right now we need a new equal pay Act. Let us be radical; let us not be afraid; let us get on with it.

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[Rebecca Pow (Taunton Deane) (Con)]

I congratulate the hon. Member for Inverclyde (Ronnie Cowan). I am so pleased to hear that his constituency is open for business and I am delighted that he is living out his early dreams by finally getting into politics. He speaks passionately about his area and I know that he will speak up for it well while he is here. I also want to congratulate the other Members who made maiden speeches today. We had two excellent speeches from the two Bs, Bermondsey and Bury St Edmunds—the hon. Member for Bermondsey and Old Southwark (Neil Coyle) and my hon. Friend the Member for Bury St Edmunds (Jo Churchill). I know that they will both be a working part of the operation of this Chamber and I welcome them.

I also want to congratulate everyone who has contributed to today’s debate. I speak as a woman who not only set up my own small business in my constituency some 12 years ago but has juggled work for large companies and corporations, including the National Farmers Union, the BBC and ITV, with family life since leaving university. Yes, that was a long time ago, but all that has happened since. I am now the first female Conservative MP for Taunton Deane, so I have a particular interest in today’s debate, as do many other Members.

I particularly want not to be negative but to highlight that although there might be a long way to go with differences in pay between men and women, we have made enormous strides. More women are in work than ever before, 14.4 million nationally, and there are more women-led businesses than ever before. To prove that point, in Somerset there are 1,957 women members of the Federation of Small Businesses, with 577 of them within the Taunton postcode area.

I want to focus especially on the growing surge in women running their own businesses, which, of course, puts them in control of their own pay. Some 20% of small and medium-sized enterprises are either run by women or are women-heavy—and by that I do not mean anything about weight: I mean, of course, that they are predominantly run by women. SMEs led by women contributed £75 billion to the economy in 2012, which was the latest figure I could find.

In my experience in Taunton Deane and through joining and working with a range of women’s business groups, women-centric businesses are growing and they are successful. The Government must do all they can to enable and encourage those businesses to grow. Let me give just one example of a very successful small business in Taunton Deane. It is called Mastergen and is in a very rural location, in the village of West Bagborough. It is a women-only company made up of six women. The managing director is Alison Dunphy, and I spoke to her earlier for an update on how they are doing. I am pleased to report that the company is doing well. It specialises in supplying quality dairy and beef genetics to farmers throughout the UK. To the uninitiated, that means bull semen, and very important it is too. So successful is the company that turnover has doubled in under nine months and the company won the Taunton business incentive award last year.

[Mrs Anne-Marie Trevelyan (Berwick-upon-Tweed) (Con)]

My hon. Friend’s comments bring me on to an issue that I want to raise. In my constituency of Berwick-upon-Tweed—another B—we are all to a man very proud to support the Bronze family, who have spent years travelling hundreds of miles each week to help their daughter Lucy fulfil her passion for football. That young woman is now kicking winning goals for our England women’s team and hopefully will do so again tonight against Japan. I hope that Members will keep their fingers crossed. Does my hon. Friend agree that we should encourage the lottery sports fund to focus on investing in sports clubs and facilities that are committed to investing in girls’ sports such as cricket and football? I ask because the subject of bull semen leads us to the male sports, and in cricket and football we are seeing spectacular results from our female players—

[Mr Speaker]

We are extremely grateful to the hon. Lady.

[Rebecca Pow]

I thank my hon. Friend for her interesting intervention. I do not know whether she knows this, but my daughter played cricket for Somerset, so I am very keen to promote women’s sports. Indeed, during my campaign, I became very involved in promoting women’s sports down at the football ground with our Taunton football club. I urge the Government to do exactly as my hon. Friend suggests as much is to be gained from incentivising and encouraging women’s sports.

The women in that bull semen company, many of whom have children, work effectively, intensively and flexibly. Flexibility is the key for women in the working world, and we need to give them the tools to get the job done. I am pleased that a number of my hon. Friends mentioned flexibility earlier in the day and I am confident that the Government are supplying the tools in an increasingly thoughtful and practical way to enable that to happen.

Women, with their talent, are a key to driving this country’s economic success. Obviously, the more successful the economy, the more pay will rise and the more women will benefit. Of course, women’s pay must always be equal to that of men across the board, and our female children—to join the team, I have two girls aged 23 and 20—should never have to think about whether they might be paid less than men. We really do need to get those girls, who are so good at taking their exams, into science, engineering and even manufacturing—all areas that have been highlighted today.

I praise the Government’s recent moves to modernise the workplace by introducing rights to more flexible working for employees, which will increasingly help women, and I also very much welcome the 20% support for childcare costs for up to £10,000 a year for each child.

[Angela Crawley]

Does the hon. Lady accept the point made earlier by one of my colleagues about the Fawcett Society’s research suggesting that 85% of cuts to benefits, tax credits, pay and pensions have a greater impact on female members of the household than on their male counterparts, and that that has a substantial impact on child poverty figures and women’s ability to move on in the workplace?

[Rebecca Pow]

That is why we need to get the economy moving to improve all those areas and why childcare support is so important in helping to top them up. That support is very much welcomed by all the women I speak to.

I welcome the introduction of 15 hours a week of state-funded early education for three and four-year-olds. Although I welcome that support, I know from speaking to a range of women in work that many of them are calling for it to be introduced when children are even younger, to enable those women who want to do so to get back to work sooner. I support my hon. Friend the Member for Portsmouth South (Mrs Drummond), who said that we must recognise those women and even fathers who want to stay at home to bring up their children, because nothing is more important than what we do for our children in bringing up the next generation.

[Emily Thornberry]

Of course, the hon. Lady is absolutely right: such decisions—whoever makes them on behalf of their family—should be in their family’s best interests. Some women may wish to work part time and take advantage of tax credits. The difficulty is that they need to work 16 hours a week to get tax credits. Is there not a problem therefore with offering only 15 hours childcare, particularly as children have to be dropped off and picked up again?

[Rebecca Pow]

The hon. Lady makes an exceedingly good point, and it is something that we should throw into the mix.

In my constituency, the gender pay gap is the lowest on record, due largely to the progress made during the last Government, because the economy in Taunton Deane has really improved. The disparity between men’s and women’s pay is relatively small at 11% and, with the actions being taken by this Government, is coming down all the time, which, of course, I welcome.

I am pleased that the Government are taking this issue seriously. I see some people shaking their heads. The figure is still too high, but I am confident that, with the measures that the Government are putting in place, the gender pay gap in my constituency and elsewhere will continue to come down, and I shall be pressing to ensure that that happens. I have an all-women political team, both in London and in Taunton, and they are of mixed ages—some older, like me—so we are addressing the issue that was raised earlier. Indeed, with the glorious flood of new, young—and not so young—female blood coming into the House, I am sure that we will all work on this very important issue together.