Gender Pay Gap

Stella Creasy Excerpts

Wednesday 5th December 2018 Westminster Hall

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I beg to move,

That this House has considered the gender pay gap.

It is a pleasure to serve under your chairmanship, Sir David. I feel very greedy for having just intervened in the last debate and now having my own debate, but both debates are on matters that are close to my heart, because both make a big difference to our local communities.

I mean no disrespect to the Minister present—the Minister for Women—but I see this subject as a matter for the Treasury first and foremost, because I think that closing the gender pay gap is one of the most positive economic policies that we could have in this country, given the benefits that it would bring to our country as a whole. We have spent the past eight years, since I was first elected to this House, arguing about austerity—I know that there are different views on it, but Labour Members are pretty clear that it has not been a good economic policy. There are probably different views across this Chamber as to whether Brexit is a good economic policy—many of us are certainly concerned about the impact on our economy—but I hope there is agreement across the House that closing the gender pay gap would have a positive impact on our economy.

For me, it is interesting and telling that we do not see this matter first and foremost as one of economics. That is one of the challenges we have to address, because we know that closing the UK’s gender pay gap would add £150 billion to our GDP in the next couple of years and that an extra 840,000 women would be added to the UK workforce. Those figures reflect what the gender pay gap really is: untapped talent in our society. Given that we have gone through the horrors of austerity and we appear to be going through the horrors of Brexit, never more have we needed positive economic policies that tap into that talent, to help us try to redress the balance. To the person who tweeted me earlier this afternoon, saying that in debating the gender pay gap I may as well be debating “unicorns”, I say that today the “unicorns” are in the main Chamber, in relation to Brexit. This debate is very much a reality.

The gender pay gap is a reality that we have always known existed; we have always had data to show a general gender pay gap in this country. We know from the annual survey by the Office for National Statistics that the average gap is about 13%. However, what has changed in this debate in the last year has been the data about particular companies, busting open the argument in people’s workplaces and revealing to them the variations between different sectors. It has shown that 78% of companies in this country that have more than 250 employees are paying the men they employ more than the women—that is on average, so it is not just about individual men and women. That is a systematic undervaluing by those companies and organisations of the women who work for them, and of the possibilities that they could bring to their company or organisation.

[Hannah Bardell (Livingston) (SNP)]

I am delighted that the hon. Lady has secured this debate and it is a pleasure to join her in it. I was on the Delegated Legislation Committee that considered the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 and put them through. I was surprised, as I am sure she was, that the bar was set at 250 employees. I know that is a good start, but does she agree that some of the biggest challenges are in the small and medium-sized companies that have fewer than 250 staff, and that it would be fantastic to hear at least an expression of willingness from the Government Benches to extend that legislation as soon as possible?

[Stella Creasy]

I completely agree with the hon. Lady. At the moment, only about 60% of the British workforce are covered by that legislation, so when we talk about understanding the gender pay gap in this country, we still have 40% of the gap to understand. I will come on to that issue later because, like her, I am impatient and, also like her, I have a passion for that piece of legislation.

We should honour all of the parliamentarians involved in this, including my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), whose determination to get the Equality Act 2010 through set us on course to where we are today. Sometimes her contribution to this process is forgotten, perhaps by Members who are new to the House. Anyone who has ever dealt with her on these issues knows full well how passionate she is about them and everyone should recognise that.

The variation within sectors is also pretty telling for us, in terms of the kinds of experiences that women in our country—our constituents—might face.

[Danielle Rowley (Midlothian) (Lab)]

On that point about looking at different sectors, I used to work in the third sector—the charity sector—which people often refer to as “the women’s sector.” However, when we look at the top and at the management, we see that it is not reflective of the sector at all. Does my hon. Friend agree that that is a big issue?

[Stella Creasy]

Completely. One of the things that is so powerful about this data is that no sector—public, private or third—is immune from critique, because frankly none of them is valuing women in the way they could. That is reflected in how they pay them, how they promote them and how they work with them.

I am very struck by some of the brands that make a point of selling to women. After all, the one place where women have the majority of power in our society is in their purchasing power, as we account for 70% of purchases in this country. Yet those brands that make a virtue about selling to women are often the ones that, when we look at their pay gap, are some of the worst in this regard. I would not necessarily have put Sports Direct up there as champions of feminism, but its gap is 6%. Contrast that with Sweaty Betty, which has a 62% variation; with Monsoon, which has a 36% variation; or with Boux Avenue, which sells lingerie and has a 75% variation. Even when we are buying those companies’ products, they are not necessarily using the money to pay their women employees equally.

Many people have rightly challenged the data about the gender pay gap. After all, there were only four measures, so I agree that the data is a blunt tool. There are certainly things about the data that I would like to know more about. However, my argument today is that just because the data is not perfect does not mean it is not powerful. I absolutely agree that we need to understand much more than just gender when it comes to inequality in the workplace, the undervaluing of talent and what that means for our economy. It certainly means that we need to understand whether we can get better data on how black and ethnic minority employees are treated in the workplace. We know that the full-time pay gap for black African women is 19%, and that for Pakistani and Bangladeshi women it is 26%. That is in contrast to the general gender pay gap of 18%. Black male graduates earned a whopping £7,000 less per year than their white counterparts in the past 10 years. One of the things we know is that although black men have been more likely to invest in higher education than their white counterparts, they are less likely to have benefited from it in their pay packets. That is an interesting challenge for us.

This data also does not tell us about part-time work, which is absolutely crucial for women because, at 73%, the majority of part-time workers in our country are women. We know that there is a gender pay gap within the data for part-time work, but it is not as clearcut as the one within the data for full-time work, which is the data that we have for these individual companies. The data also does not tell us about age. For many people, understanding the difference of the gender pay gap, and therefore understanding what is driving it, is crucial when it comes to age. People presume that the gender pay gap is something that happens later in life. Actually, we are already seeing a gender pay gap building up with graduates, within 18 months of them entering the workforce. Again, that tells us that the gender pay gap is not necessarily what people think it is.

Also, in relation to the point made by my hon. Friend the Member for Midlothian (Danielle Rowley), the public sector cannot lecture the private sector in this regard. When we look at the NHS, we see that 77% of its employees are women but it still has a substantial gender pay gap. That should tell us—as the people in charge of public services—something about our ability to value women and their worth in the workplace. Indeed, the private sector pay gap has decreased, from 20% to 16%, while the public sector pay gap has widened to 13.9% in the past five years.

The data also does not tell us what difference getting qualifications makes. Again, when we go on to consider what might be causing the gender pay gap, people make presumptions about the impact of training and qualifications. Actually, when we look at the data, we see that it is not necessarily the case that women who have been educated to a higher level, such as degree level, are being paid more. Indeed, despite more women being educated to a higher level, there has been little or no change in the gender pay gap between groups of workers qualified to a degree level since the early 1990s. We also see a gender pay gap when it comes to apprenticeships. For level 2 and level 3 apprenticeships, women earned an average of £6.85 an hour, compared with the average for men, which was £7.10 an hour.

One of the things that is so powerful about this data is that, because it is so localised to particular companies, it helps people understand what is happening directly to them in a way that a general statistic does not. I have met the Minister to talk about one of the challenges in this regard: when the data was published in April this year, what impact did it actually have on the ground? I ask that because it is one thing for us here in this House to analyse the data and maybe call to account those firms that sell to women without paying women properly, but it is another thing to talk to our constituents about their experiences of what the data shows about their workplace.

Therefore, when the data was published, a cross-party group of MPs put together an anonymous survey called #PayMeToo to try to understand the experiences of women at the coalface. As the Minister knows, the responses were pretty shocking. People often say, “Data is a great disinfectant. Publish the numbers and that will drive change.” The data from the #PayMeToo survey shows that we might be publishing the data, but we are certainly not telling women to talk about it, and those women trying to talk about it in their workplaces face a hostile environment—I hesitate to use that phrase, but it is very clear from the responses we got.

Women were being told that that was just the way it is; that they work in sectors where there are not any women, so why would they expect women to be paid the same as men? They were being told by HR departments that they should bury the data; that they should not be difficult; that they needed to raise a grievance if they wanted to talk about those issues. They were being told that they could get a pay rise, but it would not be equal to that of their male colleagues, because it was about trying to manage the impact of the fuss that was being created. They were recognising that their companies were using what they called “very creative reporting” to try to minimise the gender pay gap, and so pretend that the issue was not happening. They were being told, “Don’t worry. Next year we will employ some more lower-paid men, and that will sort the problem.”

One of the things that I hope the Minister will commit to is following up that data and gathering it herself next year, when the second lot of data comes out. It should not be up to MPs to try to grab these qualitative pieces of research, when what consistently comes back to us speaks of the hostility that women face regarding the impact of this data; of just how sensitive it is for people to talk about what they earn in this country; and of the presumptions and cultures behind the gender pay gap, which we have to deal with.

Let us try to deal with some of those presumptions. At the moment, it is true that we have only half the story with the data, and many commentators both online and offline, including in The Spectator—I am sure Toby Young is watching—will try to fill in the rest of the blanks for us. They tell us that it is about women and their lifestyle choices—bluntly, that women have kids, therefore they want to work flexibly and to take time out, so of course they are going to be paid less.

[Jess Phillips (Birmingham, Yardley) (Lab)]

My husband has kids.

[Stella Creasy]

As my hon. Friend says, her husband has kids. She pre-empts what I am going to say: this is not about women, but about parenting. One of the challenges for us is to support both parents to be equally culpable for the child that they have created, including looking after that child, because that is one of the things that would help women in the workplace. There is an impact on women’s earnings when they become parents, but there is not as much of a gap for fathers. For mothers the pay gap is 30%; for fathers it is around 10%. We also recognise from figures provided by the Office for National Statistics that having children can only account for a third of the variation in gender pay. One of the things we have to nail in this debate, if we are to close the gender pay gap and get that economic benefit, is the idea that this is all about having kids. A big chunk of the variation cannot be explained by childcare or caring commitments.

The second thing people say is, “This is about women putting themselves forward. Women do not ask for pay rises; women do not seek promotion; women do not want to be in charge.” Thankfully, we also have research showing that is simply not the case—that, as much as we might admire her in many other ways, Sheryl Sandberg is wrong. This is not about leaning in; this is about systematic discrimination against women in the workplace. An Australian study. Clearly shows that men and women ask for pay rises, just as much as each other, but that men are four times more likely to get one. That is the same for men and women of similar attainment or qualifications, and for men and women of certain ages. Let us stop blaming women for the gender pay gap, because it is not their fault; it is the fault of the environment they are working in.

That environment is what we need to tackle, and that is not just about getting a few more well-paid women at the top—although, if we are honest, we have seen over the past eight years that that is not going brilliantly either. Britain’s public companies will need to appoint women to 40% of their board positions over the next two years if they are to meet the voluntary target that the Government have set, and 100 companies in the FTSE 350 have either no women or just one woman on their board. However, if I am honest, it is not women at the top who I am really concerned about, because the vast majority of the gender pay gap is about low pay and women. It is about the value that we attribute to certain sectors, and the fact that those sectors are dominated by women. The silent majority in this country that we need to speak up for is not the women who we are going to see on the back page of the Financial Times. This is not about getting a few more women in top positions, although some companies have worked out that that would skew their figures; this is about the millions of women working in jobs that are systematically undervalued and underpaid.

We see a lower pay gap within low-paid industries, but we still see a pay gap. Over one in five female workers are low paid, earning less than two thirds of a typical hourly wage or just £8.55 an hour, compared with just 14% of men. That silent majority needs us to recognise that challenging the gender pay gap, and getting the better productivity and the economic benefits of doing so, comes about through how we think about those industries. It comes about through how we think about progression and flexible working within them, and not taking no for an answer; not thinking that this is somehow just about women being more confident or more articulate, or even a bit of anti-bias training, welcome though it would be.

[Danielle Rowley]

My hon. Friend is making a fantastic and powerful speech. Some 80% of administrative and secretarial staff tend to be women, and when a construction company in my constituency of Midlothian went bust, the men who were the engineers and had the manual jobs found further employment quite quickly. However, the women who were in the admin roles did not, and found themselves unemployed. Does she agree that is another issue that is creating gender inequality in the workplace, on top of the gender pay gap?

[Stella Creasy]

Absolutely. One of the things I want to come on to is the rise in self-employment, and in particular how that affects a lot of women who have lost their jobs in industries where self-employment is now the norm. A lot of our equal pay legislation and gender pay work is out of date because of the way in which people are now working, and I would love to hear the Minister’s thoughts on whether we need an equal pay Act for the 21st century that can take account of what a comparator is for somebody who is self-employed. Certainly, for a lot of those women, that will be a live issue.

Equal pay is still a problem. The Equal Pay Act 1970 is older than I am, but we know that women are still facing basic problems in being paid the same as men to do the same jobs. We know that the 84% drop in the number of cases is more to do with the cuts in legal aid than with an end to the problem, as the legal cases involving the BBC and Asda prove all too well. However, the gender pay gap is not illegal; it is just immoral and, frankly, inefficient. That is the issue that we have to get right, because it is an issue that our competitors are getting right.

That is the third thing that I want to say to the Minister. We can argue about the data—I press her to improve the quality of the data we get with the second lot in 2019, because there is more we can do—but data is not enough. Indeed, the data and the reaction to it shows that people are quite comfortable with the idea that we should have a gender pay gap, in a way that they would not be comfortable with poor productivity in their firms. We have to change that culture, and when our competitors are doing that we have a real problem.

[Hannah Bardell]

On the matter of culture, does the hon. Lady agree that the erroneous and inappropriate misuse of non-disclosure agreements is making a massive contribution to poor culture, with women particularly being silenced, resulting in the suppression and oppression of women and their voices in the workplace?

[Stella Creasy]

I absolutely agree. Indeed, that hostility to women’s voices being heard at all is one of the things that has come out of the #PayMeToo data. The fact that someone is powerful and has the money to silence someone else does not mean that that person’s voice should not be heard. I will support any of the measures on non-disclosure agreements that I know the Select Committee on Women and Equalities is looking at, not just about sexual harassment but about harassment in the workplace, because it is clear from the data we are getting that women do not feel able to come forward and do not feel protected. Indeed, when we see the BBC—a major public employer—trying to silence women, what message does that send to women who want to talk about equal pay?

We can learn lessons from our competitors. We can learn from Iceland, which has brought in some very serious fines to make sure that there is enforcement of equal pay. It is no good having legislation if there are no real teeth to enforce it. In Germany, employees can now get the details of six of their colleagues’ pay so that they can do a direct comparison, which has had a big impact on changing conversations about the worth of women in the workplace.

However, I am also here to say to the Minister that time is up for asking nicely, because we have been asking nicely for some time for these issues around pay and progression to be dealt with, and the pace of change is glacial. When our competitors in Germany, Belgium, France, and elsewhere across the EU—even in California, for Christ’s sake, which is hardly a bastion of socialist public policy—are introducing quotas and recognising that pushing those quotas helps push the pipeline, the question for us is, “Why do we want to be left behind as a nation?” Left behind we will be, because even if we can struggle to get a few more women on boards to meet that target for 2020, we are not doing anything about that pipeline. We are not doing anything fundamental to ensure that the talent that exists on the shop floor that is currently underpaid is being picked up and fast-tracked. That would help change the country.

That matters because of the economic impact of failing to pick up that talent. It matters when we hear companies saying that when it comes to promoting women, “Most women don’t want the hassle or pressure of sitting on a board.” Of course, we know that women do not deal well with pressure, obviously. They say, “All the good women have already been snapped up. That’s why you can’t find them,” or, “We already have one woman, so that’s enough, surely.” Of course, all women can be represented by one woman on a board. They say, “Shareholders just aren’t interested in this issue.” Frankly, if shareholders are not interested, they are not watching the world or their bottom line.

A global analysis of more than 2,000 companies showed that companies with women in at least 30% of leadership positions had profits that were on average 15% higher. If shareholders are not pushing for and demanding change, clearly they do not want to make any money, but that is what is happening now. We can keep asking nicely and trying to improve the data, but even if we improve the data there is that comfort with having a gender pay gap that means our economy is going to be held back, and that needs to change.

We should be asking about part-time work and whether we need to lower the threshold, at least from 250 to 100 employees. We should hold to account those companies that try to avoid putting in their partnership data, and we should get the data on black and ethnic minority employment and disability within our workplace. But we should also make a commitment that we will act, and acting means doing what our competitors are doing. It means setting some clear targets and having consequences for those firms that fail to act.

We know that next April we might see data that is a little bit better. After all, they will have had a year to try to figure out how to game the system, but gaming the system does not get the economic benefit. Let us stop apologising for wanting to close the gender pay gap and start demanding that we do, because this country cannot afford not to. What will the Minister do to ensure that the data we get next year is better, clearer and more diverse? What does she think is the appropriate timescale to keep asking nicely? Will she commit to when we might bring in quotas if we do not see change? She will find friends and champions across the House if she does. I also know that if she does not, Britain will not get the productive workers it needs. Blaming women for the problem will not help our economy. Helping ensure that every firm, every public sector organisation and every charitable organisation makes the best use of its staff will give this country the brighter future that the Prime Minister claims she wants. We want more than one woman at the top; we want many. That is what Britain deserves.

[Sir David Crausby (in the Chair)]

I want to get to the Front Benchers by 5 o’clock. There is only one Member standing, but there is not much time in a one-hour debate.

--- Later in debate ---

[Stella Creasy]

I do not have long. I had asked the Minister whether she would consider the Government Equalities Office doing its own survey of the direct experiences of women of the impact of the data. I again make that plea to her. It is absolutely no use us talking about that here without the data. We did that through the #PayMeToo campaign, which I hope the Government Equalities Office will look at. We know that 9% of organisations submitted data with impossible outcomes; there was 1% with bonus payments of essentially more than 100%, which does not make any sense. There are questions about the data.

The Minister talks about 40% of companies having action plans, which means that 60% do not. We could have several years of trying to refine the data, but fundamentally, women in this country are being underpaid, and our economy is suffering as a result. Please, Minister, do not think that this is just about trying to explain to Ryanair that you do not, frankly, need a penis to fly a plane; this is about what drives change. If it is not quotas, it is not asking nicely—that is what the data tells us. I really hope that she will recognise the change.