Equal Pay (Transparency)

Sarah Champion Excerpts

Tuesday 16th December 2014 Commons Chamber

[Sarah Champion (Rotherham) (Lab)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to make Regulations under Section 78 of the Equality Act 2010 to require employers of more than 250 employees to publish information relating to the pay of employees for the purpose of showing whether there are differences in the pay of male and female employees; and for connected purposes.

Forty-eight years ago, the women of the Transport and General Workers Union at Ford Dagenham got up from their machines and marched for equal pay. Today we have the privilege of having some of those women here in Parliament. Sadly, they are not here to celebrate a victory won, but to support a campaign to deliver on the promises that were made by Barbara Castle and this Parliament when we passed the Equal Pay Act 1970. I am ashamed to say that 48 years on from that historic strike and 44 years since the Act was passed, equal pay is still no more than a promise.

Women in Britain earn, on average, just 81p for every £1 earned by men. In my constituency of Rotherham, women earn just 77p for every male pound. Over a lifetime, that means women miss out on a staggering £200,000—enough to buy a house outright. Young women in their 20s, who the Government like to claim do not face the problem of the gender pay gap, get paid an average of £1,570 less a year than their male peers. In 10 years, that amount will buy them a car or pay for a deposit on a house. It is a life-changing amount that young women are denied.

It is not just women who are poorer because of the pay gap; it is their families too. Equal pay is an issue for all of us. No father, husband or son wants the woman they care about to work in a world where they are valued less for being a woman. The Government may claim that there is no need to worry and that the gender pay gap is falling, but I would hardly call a small fall last year, after a widening gap the year before, a victory. It is true that the last Labour Government closed the pay gap by almost a third, but even that progress is too slow. Women should not have to wait another 44 years for the gap to disappear.

Birmingham city council and, more recently, Asda demonstrated that pay inequality—being paid less as a woman for doing work that is of equal value and demands equal or even higher skills—is still a factor for women across the UK. We have progressed from the days when jobs would be advertised with one hourly rate for men and another for women, but that does not mean that the biases do not continue—they are just more subtle. According to the Chartered Management Institute, the average man’s bonus is £11,000 more than a woman’s.

The inequality becomes self-perpetuating. Men who have earned more in one job enter at a higher salary than women doing the same job who are already employed. That is justified not by performance, seniority or skill, but by the realities of recruitment. Sometimes, as in the case of Birmingham city council workers, there are historical pay inequalities that have simply never been rectified. All I am asking for is equal pay for equal work. Whether on the shop floor or the trading floor, that principle is as relevant now as it was back when the women of Dagenham marched.

Pay transparency—the simple act of a company publishing its gender pay gap—would mean that these differences were public for all to see. Why should the burden be on women to investigate pay inequality and to ask their colleagues how much they earn? How can we expect women to call out their employer if they do not even have access to the evidence? We should not have to wait for whistleblowers. We need to empower women to use the equal pay laws that are already in place.

Of course, the pay gap is not only about how much workers in the same job are paid. It is about equal reward for equal work. It is about valuing people’s skills and experiences equally, regardless of their sex, whether they are a parent or have just returned from maternity leave, and whether they are working part time, flexitime or full time. It means not only being paid for the job that they do, rather than the person they are, but being able to expect that if they do a good job, they will be promoted; that they can keep progressing in their career; and that reaching the highest-paid role is possible.

The workplace is changing and there are many examples of businesses that are committed to breaking down these barriers and of women who have made it to the top of their professions. However, today, in this very Government, there are 18 men in the Cabinet and only five women. In the Chamber, 23% of MPs are women and the majority of those are Labour. The Liberal Democrats have not even appointed a woman to the Cabinet in their four and a half years in government.

Pay transparency would push companies to focus on why the pay gap still exists, whether it is because women working on the shop floor are paid less than men in the distribution centre, despite doing work of equivalent skill and responsibility; because men in the company are getting higher bonuses; or because the highest-paid roles in the company are held by men. All those factors require changes to be made to allow equality in the workplace.

This is not about naming and shaming, about telling companies what to do or about micro-managing them; it is simply about changing the emphasis. Pay transparency places the responsibility on employers to be actively conscious of the law on equal pay, and to have policies to address the gap. It is a simple ask, and we know that because some employers, although too few, do it already. PricewaterhouseCoopers recently announced that it would join Genesis Housing and the three other companies that publish their pay gap.

This is not a vast new administrative burden on employers. It would apply only to employers of over 250 employees, and would be as simple as publishing the information in the companies’ annual reports. What it will do is focus minds. Businesses that already publish their figures tell us as much. The insurer Friends Life says that it publishes its pay gap by each pay grade for two key reasons:

“one is trust and the second builds on the old adage, ‘what gets measured, gets managed’…This was shown to be the case when we reported a slight widening of our gender pay gap at two middle management grades in our 2013 Report. The issue was investigated and the explanation included in the report.”

Openness and transparency are principles that this House should be voting for and that Governments of all colours should champion. However, on entering Government in 2010, the two coalition parties announced that they would not be implementing section 78 of the Equality Act 2010, which the last Labour Government introduced to enable pay transparency. The former Lib Dem Equalities Minister, the right hon. Member for Hornsey and Wood Green (Lynne Featherstone), made a speech in June 2012 in which she said:

“I firmly believe that for most companies who are trying to do the right thing, voluntary business-led initiatives are key. They secure more buy-in and achieve more lasting change than the big stick of legislation…It is not about forcing companies to report information they don’t want to.”

The Government believed that that passive approach would bring about lasting change.

The “Think, Act, Report” scheme has been hailed by the Liberal Democrat Under-Secretary of State for Women and Equalities, the hon. Member for East Dunbartonshire (Jo Swinson), as bringing about “significant steps forward”. However, when asked, the Government admitted that only four—it is now five—of the 200-odd companies that were signed up to the scheme had published their pay gap. That is hardly surprising when the Government’s website for “Think, Act, Report” tells companies that they should publish information on their gender pay gap only

“if they feel comfortable doing so”.

That is hardly robust encouragement from the Government.

It appears that the Liberal Democrats have had a change of heart. They now admit that section 78 of the 2010 Act was the right approach all along. We still have time before the election to make pay transparency a reality. It does not require primary legislation. Section 78 already gives the Government the power to make regulations to require pay transparency across all large employers.

Finally, I want to pay tribute to Grazia magazine and its readers for their fantastic campaign, “Mind the Pay Gap”, which has seen tens of thousands of women sign the petition to enact section 78 for pay transparency. I also thank Unite and all the other unions that have championed equal pay for decades for the thousands of working women across this country.

Today, Parliament has the opportunity to take a big step closer to making good on the promise of equal pay, which was fought for and won by the women of Ford Dagenham 48 years ago. MPs of all parties must listen to the voices of women up and down the country and support pay transparency today.

Question put (Standing Order No. 23).