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Mr. Harper: My hon. Friend might be interested to know—I am sure the Minister will be, especially as the issue is relevant to the public sector—that every single Government Department pays its disabled employees less on average than its non-disabled employees. In a number of them, that pay gap is significantly higher than the gender pay gap. The Home Office, which is the worst offender, pays disabled employees on average a third less than non-disabled employees. I am sure that that is not a comparison of people doing like-for-like jobs and that it has to do with the level of the organisation that people have reached. However, it touches on exactly the same issue, and the problem is bigger than the gender pay gap in some Government organisations.
John Penrose: I thank my hon. Friend for his helpful intervention. It precisely illustrates the point. If clause 73 is the answer to pay gaps, why is it the answer to only the gender pay gap?
The Solicitor-General: May I ask the hon. Gentleman a different question? If he is going to vote against the clause, why is he now trying to attach disability to something he is going to oppose?
John Penrose: Because we are trying to probe the Government’s reasons for doing this only for the gender pay gap. We think that there is an inconsistency in their logic. If the clause is, as the Government claim, the answer to the problem, why should it be applied only to gender pay reporting and not other inequities? Alternatively, if the clause is not the answer, we will be happy to vote it down, because other things should be done first. That explains why we have tabled the new clause, although we are also slightly bound by the selection of the Chair. It is important that we explore the matter. Why, under the Government’s proposals, will the measure apply only to gender pay reporting, and not to other strands of discrimination—disability was the one that we happened to choose to illustrate our point?
Lynne Featherstone: It is nice to see you in the Chair again, Lady Winterton.
From listening to the hon. Member for Weston-super-Mare, it seems that he wishes to minimise the seriousness of the discrimination that women experience, either because of their “choice” of jobs, or because of their absence from the workplace due to having babies. I will certainly look at the figures he puts forward, but given my impression from the evidence session, I think that he has reduced the number as far as possible. The 13 per cent. figure that he quoted, I understand, was basically a 17 per cent. pay differential in full-time work. We are starting from a different basis and we might not agree on figures.
John Penrose: I take the hon. Lady’s point about having to be very careful with figures that we cite. Mine came from the ONS, as I thought that I should base my position on an official set of numbers. If she has a figure that she feels is better, I ask her to let me know.
Lynne Featherstone: I thank the hon. Gentleman for that intervention. I have figures supplied by all the normal organisations. My anxiety is not truly with the gender pay information clause per se, but the timing of its introduction through regulation. I feel—I believe that there are Labour Members who feel this too—that women have waited a very long time. Organisations have been able to reduce the pay gap voluntarily for some time, although the statistics that I read from the EHRC on the number of employers that voluntarily complete equal pay audits make it clear that the rate of progress is pretty slow. I am not convinced that another four years of volunteering, even with the work that the Minister says will go on regarding metrics, will produce the step change that women need and deserve—and they deserve it now.
I was quite shocked by the CBI’s presentation at the evidence session because, like Conservative Members, it was pushing the idea that there is very little discrimination—I am still not convinced by that—or rather that that is not the reason for the pay gap.
Lynne Featherstone: Of course there are other factors, but I was merely saying that I felt that minimisation was going on.
The factors are being addressed. The Government have made tremendous strides on child care, and initiatives such as Sure Start have changed lives and made significant inroads into the problems. All the things that might discriminate or do discriminate against women give them less choice and less money than their male equivalents. That issue needs to be addressed and, to some extent, it is being addressed. The significant problem that remains is hidden within business in this country. The whole point of gender pay information is to create transparency and remove the problem from its hiding place so that we can all see what is happening.
Let us say that the CBI was right about this work. I will listen intently to the argument about the cost to business, but I doubt that it would be anything like as much as the hon. Gentleman says. However, let us see what is happening. We have recently, in the case of our own expenses, seen that transparency has been the only thing that can shake the establishment and change what was being hidden underneath. Transparency is the answer when it comes to providing the step change that we want on discrimination in respect of women’s pay.
Mr. Harper: One thing that the hon. Lady is missing is the information that one would need to produce. That is one reason why the Minister, rightly, has got the EHRC to carry out this discussion. Part of the process is straightforward, such as publishing a list of what people are paid. The difficulty comes when considering the content of jobs, comparable jobs and comparable pay. In a large organisation, if a bunch of people are doing job A and another bunch are doing job B, and they are the same, that is fine. However, if there is a multiplicity of jobs, it will mean considering the content of jobs, the skills required for them and what people are paid, and then making comparisons to determine whether that makes sense. That will not be straightforward. The CBI, the unions and the EHRC are trying to work out whether there is a way of producing that information in a simple form, but I suspect that it is not straightforward.
Lynne Featherstone: That is clearly one issue that we have to grapple with, because we are talking in advance of people coming out with the information or the metrics, around which there might be a coalition of the willing to agree the way forward. As the hon. Gentleman will know from this morning’s sitting, I am in favour of somewhat more rigorous and formalised pay audits, which would not go around metrics, but would involve, as he described, full disclosure of pay, levels of pay, values of pay and packages relating to pay. As I said, the only way to make the step change that women want for equality—without having to wait another 39 years, as we have waited since the Equal Pay Act—is to make these things compulsory. I am not convinced by the voluntary way forward.
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John Mason: Does the hon. Lady agree that we are getting rather a lot of red herrings from the Conservatives? Companies produce masses of information—probably too much—in their accounts. For example, they produce a list of pay for the top directors within bands. That information is also open to debate and discussion as to whether one company is paying its directors too much compared with another. That is not a reason for not producing the information. The first priority should be to make the information available, which may then lead to other questions that the Conservatives can worry about in due course.
Lynne Featherstone: I thank the hon. Gentleman for that helpful intervention; he is entirely right. The hon. Member for Weston-super-Mare was talking about an inordinate expense, and the point needs to be developed further. I do not accept what he said, but, were he to be right about the cost, no one would take such action voluntarily. [Interruption.] From a sedentary position, he indicates with an arm gesture that the idea is to get everyone off the hook.
John Penrose: Actually, my arm gesture was supposed to indicate that the hon. Lady is right that if the costs are as high as I fear they are, no one—including her, I hope—would want to take such action.
Lynne Featherstone: I do not accept the figures; I am waiting for the Minister to come back on them. From my experience in business, what we are discussing is not rocket science—particularly for big companies that have the wherewithal and the IT systems to produce such information. Little companies mostly know their pay levels. There are some issues about correctly valuing work, so we will have to disagree—pretty profoundly, actually.
Issues around discrimination are hidden in the system. The CBI has a point that often women and men are in different types of job and women’s work is paid less, even if it should be of equal value. In the evidence sessions, the Fawcett Society gave the example of paying people who pack meat in a factory differently from forklift drivers. Even though the skills and experience needed for those two jobs are comparable, because one job has been female dominated it tends to be a lot lower paid than the one that has been male dominated—that is partly a link to the previous discussion. Those employers are breaking the law and not necessarily realising it. That is why we have to require them to address the issue. If that information was published, it could be seen, realised and addressed, and the issue could be dealt with. There are some bad employers who get away with underpaying women and therefore resist transparency. Then there are those who discriminate without knowing it because they do not even realise that they are underpaying or undervaluing the work of women.
On the issue of transparency and the CBI’s assertion that many of their companies voluntarily publish gender pay information, we feel that the good guys will always publish such information. However, we are dealing not just with the good guys, and we have to go after those companies who use the fact that no one can see what they are doing to pay women less, either in particular or systemically.
I will be brief because we have already covered which factor is the largest and what the Fawcett Society said about the pay gap. However, a huge penalty attaches to part-time working, to motherhood, to discontinuous labour market records and to care and responsibility, the vast majority of which accrue to women. Organisations that are good at addressing pay, and that are open and above board and will publish such information, tend also to be those companies that have good policies and good practice and that deal with and get the benefits of diversity by promoting equality for women. Liberal Democrat Members feel that the introduction of mandatory pay audits would have a beneficial effect on companies.
The Solicitor-General: The hon. Lady has mentioned that a number of companies already disclose such information. According to the Tory version, however, they must be completely mad, because disclosure is so expensive that it would be silly to do it.
Lynne Featherstone: Conservative Members are coming from a particular place in this discussion. Those companies that already have pay audit systems seem to do everything better—they seem to have women in much higher grades, better policies for pregnancy and maternity, part-time and flexible working and so on. Liberal Democrat Members think that mandatory pay audits would have greatly beneficial effects—immediately and compulsorily—making a real difference to women. However, we understand the Government’s position and what they are trying to do. We do not agree with their position, but we will not oppose it.
Transparency, ultimately, is the key. That is why pay audits are necessary and must be mandatory. We cannot wait another four years. We did not introduce them in the times of plenty, or when the sun was shining, as Conservative Members like to put it. We do not want to see the proposals kicked into the long grass, particularly with the uncertainty about who will be the next Government. It is clear that we must take action now, and that voluntary pay audits are like waiting for Godot. If the Government fail to take such singular action in the Bill to change women’s lives for good, ironically—for they have an honourable record on equality—they will decree that women will remain second-class citizens, possibly in perpetuity if there is a change of Government.
A Labour Government could and should, if only for legacy, right the historic wrong and change the future of women. Unequal pay has meant women suffering in so many ways. Women have so many caring duties and come off so badly in terms of separation, divorce, child rearing and so on that, at the very least, we should ensure that they receive equal pay for equal work. If we do not do so now, then when, because 2013 will be too late?
The Solicitor-General: Interestingly, the Conservative Opposition seek simultaneously to vote down a clause that they intend to add to—I am sure that there is a line of rationality somewhere and that I am failing to find it.
New clause 9 would enable the Government to require private sector employers with at least 250 employees to report on their disability pay gap as well as their gender pay gap under clause 73. The hon. Member for Weston-super-Mare has spent a considerable amount of time, not just today but on many occasions, seeking to minimise the issue of pay discrimination against women in business. He does not tell a convincing story, and I shall come to that when I have dealt with the disability point.
The hon. Gentleman tries to pinpoint the problem, which he thinks is not the pay gap. He thinks the problem is elsewhere, including in poverty of aspiration among women—a deplorable assertion that is not too far from blaming the poor for being poor, as the Tories have habitually done. When he starts talking about one of the reasons being that women do not have expectations or aspirations—
Mr. Harper: Will the Minister give way?
The Solicitor-General: No. What I shall do is point out that there is a better understanding of where the disability pay gap comes from. The hon. Gentleman has had plenty of time to make his position clear. He made it all too clear for people watching—I see nods from all quarters. The hon. Member for Weston-super-Mare has, frankly, not a clue about the cause of the gender pay gap, but he argues a particular point to try to counter the need for a long-overdue toughening up of provision.
What is clearer is the cause of the disability pay gap. Let me deal with it numerically first. The disability pay gap is 6.4 per cent., compared with the figures that the hon. Gentleman quoted for the gender pay gap, which is much bigger. He of course excluded entirely from consideration the sharp end of the gender pay gap, which shows that the difference in the average hourly rate paid to a woman working part-time and a man working full-time is about 30 per cent. The lesser pay gap in relation to disability is none the less important. The hon. Gentleman made the point that we need to get more disabled people into work and to get them further up the ladder once they are in. That is where the deficit currently is in relation to disability. There is a clearer understanding of the causes and a readier recipe.
In any event, we already require private sector companies with more than 250 employees to include a statement in their directors’ reports on how they go about recruiting disabled people, retaining people when they become disabled during employment, training disabled employees and ensuring that they progress. That is the focus. We should continue to get more disabled people into work and ensure that they are represented at all levels of the workplace. That, rather than the new clause, is the route to reducing the disability pay gap and, more widely, to engendering better participation and fuller lives for disabled people because they get into better-quality jobs. Disabled people’s participation has increased some 10 per cent. since 1998. Some Government initiatives have helped, but we need to get people further in work as well as getting them into work. The positive action provisions in the Bill will help with that.
We already have a specialist disability employment programme that works with thousands of disabled people every year. In last year’s Green Paper, the Department for Work and Pensions said that we would press ahead with an enhanced specialist disability employment programme: work preparation, Workstep and the job introduction scheme. From 2010, that will provide a more flexible and personalised service to those disabled people with the highest support needs.
Last year, we doubled the access to work budget, which helps disabled people move into work and to stay in work. It provides funding to remove practical barriers when it is unreasonable to expect an employer to fund the entirety of such costs. We also think it important as far as possible to ensure that our approaches to the public and private sectors are consistent. There are no plans at present to require the public sector, through a specific duty, to report on its disability pay gap.
The public sector equality duty will build on the existing disability equality duty with a new specific one, underpinned by greater use of evidence and more consultation, and the involvement of those who will benefit from such a specific duty. There will be transparency and strong leadership from the public bodies to which we have given the task. Progress in securing improved outcomes for disabled people in the labour market is being made through the Bill, and it will be further enhanced across the private and public sectors. We are satisfied that that is where our focus should be, and I therefore invite the hon. Gentleman not to press the new clause to a Division.
We had quite a bit of the stand part debate this morning, so I shall just add some specifics and make some general remarks about the ludicrous assertions on how much it is likely to cost to present data that are already available in businesses. Various references have been made to the burdens on business—Tories talk about those all the time—and the extra pressure of the recession. I want to make it clear that for this Government, equalities are not just for the good times; they are for the bad times too. As it happens, 2013 is some time away, and we hope to be well through the recession before any such measure is compulsory.
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We acknowledge that some employers who are only just above the threshold of 250 employees might need to make adjustments, but the EHRC exists specifically to provide support in exactly such cases. We think that employers will meet their reporting obligations in the event that the power needs to be used in 2013, and there will be sanctions to follow if they do not. It is a long distance away, but it is none the less necessary to mention that there will be civil and possibly criminal sanctions for breach in due course if we cannot make voluntary arrangements. However, no criminal sanction is expected to entail a fine of more than £5,000. Contrary to what the Tories are suggesting in seeing obstacles all over the place, we hope that business understands better than it does that equality and business progress go together.
The hon. Member for Weston-super-Mare talked about equal pay being a good news story, but if we continue to progress in eroding inequality at our current rate—to use a calculation that I made for a different debate not very long ago—it will not be my daughter, my granddaughter or my great-granddaughter but my great-great-granddaughter who has a hope of equal pay with men. That simply will not do. He is pleased to say that on one measure, under-33s receive equal pay, but he must look at the real position. For a short period, single young women and single young men might have equal pay, although there is a good deal of evidence that within 12 months of graduation, women earn less than men, even in the same fields.
The position is not as clear as the hon. Gentleman suggests, but all manner of things have an impact, notably the ghettoisation of women’s work into caring, cashiering, catering, cleaning and clerical—the well-known five Cs—which are dominated by women, dominate the available employment for women and are low-status and low-paid. The availability of good-quality part-time work is limited, and it is unfortunate that the hon. Gentleman chose to leave out the part-time figure from all that he quoted about the progress that we have made, because it is a major factor.
It is not a surprise to the world that women have children, stop working to look after them and then want to come back part-time, so why is it acceptable for part-time work to be low paid? It is not, which is why we will create transparency, find out where that low pay is and get rid of it so that women are not penalised. Many of those women, of course, are single parents, as 90 per cent. of single parents are women. They will not be penalised. We will bring the matter out.
The hon. Gentleman’s proportionality argument does not work. We are not talking about a small, defined amount of discrimination. We simply do not know what the discrimination element is, but it is considerably bigger than the figures that he quoted, as I know from my 30 years’ experience in the field and from the Fawcett Society and all the other contributors, who are not happy with the attempt to minimise its role. If a single parent suffers only £1 less pay per hour than a man, she is suffering grievous inequality, which is likely to have a knock-on effect on her lifestyle and those of her children. That is not something that lends itself to being assuaged gently by proposals without any teeth. It must be stopped, and it must be stopped now.
The hon. Gentleman said that we could perhaps stop half of unequal pay if we had child care. Working that out would need a complicated formula, but he just plucked the figure from thin air. The Tories have no particular policies to enhance child care. When it comes to sharing care between fathers and mothers in order, perhaps, to free more women for work, we find that the only Tory proposals are unfinanced. Consequently, it will always be the lower paid who look after the children, and there will not be the pressure that there ought to be to increase female pay. He has no answers to unequal pay, whether or not it comes from discrimination. He is opposed to trying to get rid of discriminatory equal pay. On what basis exactly? Because he says that our figures on the cost are “not worth the paper they are written on.” Of course, he has no figure to put in their place. He has nothing except his belief. Lots of people believe in fairies at the bottom of the garden. There is no evidence of that, but there is evidence in our impact assessment of the exact cost.
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