Business Innovation and Skills - Minutes of EvidenceHC 342

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Oral Evidence

Taken before the Business, Innovation and Skills Committee

on Tuesday 27 November 2012

Members present:

Mr Adrian Bailey (Chair)

Paul Blomfield

Katy Clark

Mike Crockart

Rebecca Harris

Ann McKechin

Mr Robin Walker

Nadhim Zahawi

________________

Examination of Witnesses

Witnesses: Brona Reeves, Barclays and the Employment Lawyers Association, Jemima Coleman, Herbert Smith Freehills and the Employment Lawyers Association, Sarah Jackson, Chief Executive, Working Families, and Denise Linay, Royal College of Midwives, gave evidence.

Q86 Chair: Good morning and welcome. I apologise for the very slight delay. We were under the impression that one witness was missing but that obviously is not correct. May I thank you for agreeing to come before the Committee? First of all, would you introduce yourselves for voice transcription purposes, starting with you, Denise?

Denise Linay: Hello, I am Denise Linay. I am Head of Organising and Engagement at the Royal College of Midwives.

Sarah Jackson: I am Sarah Jackson. I am the Chief Executive of Working Families.

Jemima Coleman: I am Jemima Coleman. I chair the Employment Lawyers Association working party responding to this consultation and I am a solicitor at Herbert Smith Freehills.

Brona Reeves: My name is Brona Reeves. I am a director in the legal team at Barclays but I am here representing the Employment Lawyers Association as well.

Q87 Chair: Thank you very much. Some questions will be personspecific; others will be general questions. If you have a comment about another person’s answer to a question, feel free to say so. Equally, if there is a question posed to everybody and you feel that all the points you might have said have been covered by other speakers, do not feel obliged to add to them. We are on a pretty tight time schedule. Thank you very much.

May I start with a question to Denise Linay? You criticised the terms of reference of the inquiry as being too focused on women in very senior positions, rather than concentrating on the experience of the majority of women in the workplace. I was interested in that. Could you elaborate on it?

Denise Linay: I think it is fair to say the majority of midwives would not have an aspiration to be on a board. In fact, being at that level in our profession actually takes you out of the clinical area. Most midwives want to stay in the clinical area, so they would not have those aspirations. However, they would have aspirations to develop within their career, to be promoted, for example, and we are seeing those opportunities for promotion diminishing over time. We are also seeing the opportunities for training and development diminish as a consequence of the squeeze on public sector finances.

Chair: Thank you. I am sure your concerns will have been noted by the Committee and hopefully will be addressed when we come to our final report and, obviously, other stages of the inquiry.

Q88 Ann McKechin: When you look at the gender pay gap, you notice-when you start looking at the statistics-that it varies enormously by age range. When people come into the work force at about 20, the pay gap is not significant, but it grows with age. There is also a big difference between fulltime work and parttime work. I just wondered how you might explain the complex data. Is a single figure that purports to cover the pay gap actually particularly helpful in the discussion?

Jemima Coleman: I think it is helpful, but it does have limitations. In order to put forward proposals for what solutions could be used to address the gender pay gap, it is very important to have a clear and detailed understanding of the underlying data. As we saw last week with the Office for National Statistics, the headline gender pay gap figure was about 19.7%, but when you strip out all the parttime workers and simply look at fulltime male and female workers, the pay gap then went down to 9.6%.

Similarly, as you highlight in relation to age and region, generally women’s pay is keeping step with men’s pay in their 20s and 30s, but then there is a huge jump in the 40s up to about 20% pay disparity. That continues into the 50s; even at 60+ there is still a 20% gap. It is important to consider what is happening for women in their 30s and 40s. Is this an indication of the broader, underlying reasons of the impact of motherhood on many women’s working careers and the lack of quality parttime work? What can be done to address job segregation issues, which may mean that women who started jobs in their 20s and 30s are perhaps not able to progress to the highest levels of organisations?

Sarah Jackson: I just wanted to comment on the parttime pay gap, which I think is very significant. We do an annual benchmark of our employer members. We see a real disconnect between what managers say about their parttime and flexible workers. They say they do a better quantity and better quality of work, but when it comes to performance appraisals, the benchmark shows that fulltime workers do better than flexible workers, and parttime workers do less well than flexible workers. There is a real disconnect there. There is something going on in terms of organisational and management culture about how flexible and parttime workers are valued, which has an impact on women’s ability to progress in their careers.

Q89 Ann McKechin: Would it be better to focus on the difference in the gap between parttime work and fulltime work? Would that be a better indicator of where you think the crux of the problem lies?

Jemima Coleman: Certainly, men are equally affected by the disparity between parttime work and fulltime work. There is something like a 37.5% differential between all parttime workers of both genders and fulltime workers. It particularly hits women because they are about three times more likely to be working parttime, which is why it is very relevant to this Committee.

Q90 Ann McKechin: They might be working parttime at a younger age, relative to men. Is there any analysis of whether age has an impact on it, or is that simply the case across all age groups?

Sarah Jackson: I would say it is more about formality versus informality. What we see is that men are more likely to be working flexibly or parttime informally, i.e. below the radar, whereas women, because of their caring responsibilities, generally speaking-this can be for childcare or elder care reasons-will negotiate a formal, contractual change to their terms and conditions. Their parttime work is visible in a way that men’s parttime work often is not.

Q91 Chair: Can you just clarify what men working parttime "below the radar" means?

Sarah Jackson: Basically, you can negotiate a change in your working hours by going to your manager and saying, "I want a change in my contract." Generally speaking, that is what women will do because they need the security to ensure that a change in manager, for example, will not mean that the new person says, "Yeah, you do not come in on Tuesday afternoon. Now I want you there." Men are much more likely to do something informal: to get on and do the work but not have a formal change to their contract, which means that in organisational terms their flexible working is not visible. It is below the radar in that way. It is very distinct.

We did a study with Cranfield University some years ago that showed that very clearly. There is a complete difference in the way in which men and women approach parttime and flexible working.

Q92 Chair: Would you spell out the evidential basis for that? I have never come across it, yet you seemed to have based your observations on legitimate research.

Sarah Jackson: I can send you a copy of the research we did with Cranfield University, for example. We have been doing regular benchmarking with our employer members. The majority of our employers are large, private sector organisations. They talk about the difficulty they have in evidencing their own flexible cultures, because they say, "We record the people who make a contractual change to the terms of their employment. We can tell you who is working contractually parttime and flexibly. We know anecdotally-because we are good employers and we are trying to create a flexible culture-that we have a lot of people who are working flexibly informally." However, it is very hard for them to track them.

I can certainly send you what we have, but what I am describing is something that is known anecdotally as opposed to firmly evidenced, because it is informal.

Chair: I accept that.

Q93 Ann McKechin: Is it in certain job sectors that you find this? Is it in construction, for example?

Sarah Jackson: No, in construction people are shiftworking. Anything where there are formal shifts and you are looking at lower-paid people, you would be less likely to see that, but as soon as you get into positions where you are looking at professionals or managers, then that becomes very strongly the case.

Chair: Yes, it is very difficult to get formal evidence for informal activity.

Sarah Jackson: That is exactly it.

Q94 Ann McKechin: I wondered what sort of data could be collected and presented. How should this data be used? Would more detailed data help to put pressure on reducing the pay gap? Sarah has mentioned informal work and how that data is difficult to collate. I just wondered whether you thought the way in which we collect data at the moment is actually helpful, or is there more we could do?

Brona Reeves: I think there is much more that could be done on collecting pay data, as Jemima flagged. The headline figure grabs the headline very quickly and very easily, but it does not tell anything like the complexity of the story, and therefore put us in a position to address it. I think the key drivers for us would be further information on what employers are doing in relation to parttime employees, women returning to roles following maternity leave and the impact, as you raised earlier, at different ages or periods in the employment lifecycle. I think that is a particular opportunity for us to address things in different ways. This is something that not only addresses women but also men staying in the work environment.

Q95 Ann McKechin: Jemima, you mentioned the issue about appraisals, which I was quite intrigued about. You said people in parttime work seemed to be rated lower than those in fulltime work. Is this just simply research or do you have full evidence on this?

Jemima Coleman: Was that in our response?

Sarah Jackson: I think I made the point. We have evidence from the benchmark that we do, and there was also a study done a few years ago by the Institute for Employment Studies, both of which I can happily send to you.

Jemima Coleman: I think perhaps it is implicit when you see that there are people doing similar roles on a parttime basis and a fulltime basis. When you look at the pay disparity, some of that may be a result of the appraisal grade ratings. There may be a whole lot of other factors at play; it may be informal decisions made about the level of commitment of that individual, for example. We are aware of the stereotypes that are made about the commitment of parttime employees as compared with fulltime employees. It is given a veneer of objectivity by the correlation of appraisal grade ratings, but this may mask an underlying discrimination.

Q96 Ann McKechin: Finally, is there data that allows us to distinguish between different job sectors and regions of the country? Are there any marked differences?

Jemima Coleman: Yes, some of the data that was in the Office for National Statistics report last week showed, for example, a 20% pay gap in the East of England and the South East. That was the highest pay gap. The lowest was in Wales and Scotland, at 16.3%. In London, the pay gap had actually reduced to 16.4% compared with what it was previously. Women’s pay had increased over the last year in London as compared with men. This, again, is illustrating the limitations of the figure. Many more women than men may have been made unemployed. I think the Financial Times reported yesterday that two-thirds of new employment had gone to men, in terms of jobs created since 2010. That is an illustration of how sophisticated you need to be in your response.

Ann McKechin: When you are examining the figures and interpreting them?

Jemima Coleman: Yes.

Q97 Nadhim Zahawi: Do you think the public sector equality duty, section 149 of the Equality Act 2010, works in the public sector? Is it a template that could be used for the private sector? You may not all have a view on this. Denise will probably have one.

Denise Linay: Certainly at national level it could. I was on the Equalities and Diversity Group, which is a subgroup of the NHS Staff Council, for a number of years. Certainly, at national level there is real commitment to the public sector equality duty. It was often very difficult to see who the employers and who the staff were in that group.

As it goes down to trust level, I think the commitment dilutes. I think this is because of other pressures. Certainly, one of the things we did at national level was introduce a pay audit toolkit, which is on the NHS Employers website. We started developing that when it looked as if it was going to be part of the Equality Act-to undertake pay audits. We continued developing it because we thought it would be good practice. My understanding is that very few trusts have actually used it.

Q98 Nadhim Zahawi: Denise, can you describe your concerns about the Government’s proposed changes to employment law, particularly the impact on working women and the changes to public sector employment and pay?

Denise Linay: Do you mean terms of the employment law?

Nadhim Zahawi: Yes.

Denise Linay: That was about taking away the opportunity for tribunals to make recommendations. We have very good employers within the NHS, but we do have some that are not so good. They tend to reoffend. I think if a tribunal had the opportunity to make those recommendations, it could have a real impact.

Sarah Jackson: May I go back to the public sector equality duty?

Q99 Nadhim Zahawi: Yes, and if you want to give us your views on the proposed changes as well, we would be happy to take them.

Sarah Jackson: First of all, the public sector equality duty gives us a very useful tool. It gives us a structured approach to tackling institutional sexism. We used it a few years ago. We used the gender equality duty to highlight recruitment practice in the Civil Service. We did a mystery shopping operation, where we looked at all of the jobs that were advertised on Civil Service Recruitment Gateway for a week and we discovered that the vast majority were being advertised as full-time posts but actually-if you had the courage to ring up and ask-many of them were available on a parttime or flexible basis.

What that meant was that the duty was not translating into consistent practice in terms of giving men and women equality of opportunity to apply for jobs. We did some campaigning around that, and I am pleased to say we have achieved a result. In its response to the Modern Workplaces Consultation, the Government is now saying that the current recruitment system for advertising Civil Service vacancies has a default setting which states, "This job is available for fulltime, parttime or flexible working arrangements."

Departments that wish to deviate from that must make a business case. I think that is a very useful example of how the public sector equality duty can be used very practically to enable an organisation to look at its practice, understand the gap between policy and reality and then take steps to make changes that will have an impact on women’s ability to enter the work force.

Brona Reeves: Just picking up on that point, one of the issues I actually looked at for today was whether there was any research on the impact of the public sector equality duty. In its original form, it has been in force since 2001. It came out of the Stephen Lawrence inquiry. We would all probably say that, in terms of racial equality and the steps that public sector bodies have taken with regard to race diversity issues, we have come a long way. Could I find any statistics or analysis on the impact of this to point you towards today? I could not. I think that, in itself, is surprising.

It is very clear that there are areas of the public sector where there have been significant advances, as against the private sector, in terms of representation at the most senior levels. The percentage of women is 10% or 20% higher in many areas of the public sector than it is in the private sector. To your question about where I see that going in the private sector, absolutely I can see some sort of role for it. It would naturally be not as wide as the public sector equality duty because that, of course, addresses services. I think it perhaps would be a step too far to ask private sector employers to take that on. However, can I see a much narrower focus in terms of what employers do to advance equality and equality of opportunity? Yes, I can. Some of the approaches already set down in legislation-for example by perhaps looking at certain sizes of employers, initially-would give a very good basis to look at that.

If we go back to the impact that it might have, I think we all accept that transparency has been a big driver in addressing some of the more negative discrimination issues that we see in terms of direct discrimination and, for example, the conscious treating of traditional women’s jobs as less well paid. Those have been very well addressed by equality legislation. Do I think transparency, in a broader sense, in the private sector would have an impact? Yes, I do.

Jemima Coleman: It is right that transparency is a powerful driver of change, but I would highlight that much of the equal pay litigation in the public sector arose from the job evaluation schemes, which quite formally ranked certain jobs as equivalent or of equal value. Whilst that could provide a defence for the employer going forward in relation to any equal pay claims, it also could expose historic discrimination and fuel a lot of litigation as a result.

Q100 Nadhim Zahawi: What do you think about the proposed changes to employment law?

Jemima Coleman: In terms of the broader changes, there is so much that is either under proposal or has been recently introduced. We tried to draw out some of the aspects that might have a particular impact in this area.

Firstly, the obligation to pay a fee to bring a tribunal claim may have a negative impact. Repealing statutory discrimination questionnaires may take away a tool that allowed quite important and valuable disclosure of pay before the individual actually brought a claim. Increasing the qualifying period for unfair dismissal to two years from April may make people generally feel a little bit more insecure in their employment and less likely to raise issues of sex discrimination or equal pay.

On the flip side, potentially, there are financial penalties for employers who breach discrimination and the new tribunal power to order equal pay audits for those employers who have been found to breach discrimination legislation. Those may have a positive impact in focusing the employer’s mind on the importance of ensuring pay equality. There has also been an important Supreme Court decision, Birmingham City Council v Abdulla, which showed that you now have six years to bring your equal pay claim rather than six months. That, again, may help focus employers’ minds on the issues.

Q101 Ann McKechin: This comes back to the first question we asked Denise, about women in lower-income jobs. There is a fee of £1,200 to take an employment tribunal case if you are not a trade union member. That must actually rule out a whole sector of the female work force-in particular those on very low pay.

Denise Linay: It certainly would if it was to do with flexible working. My experience in taking cases within trusts on flexible working is that it can be a fairly toothless piece of law. The only way you will get anywhere is through the tribunal system. Most women, if they are looking for parttime work or have just come back from maternity leave, will not be able to afford that unless they are a member of a trade union that will finance it. Of course, if trade unions are going to finance those cases, there will be a reduction in those cases that go through to tribunal because trade unions have to bear in mind the value of the case in terms of their whole membership.

Sarah Jackson: It is something we are very concerned about. We run a legal helpline for employees, the vast majority of whom are on family incomes of less than £28,000 per year. These are people who are desperate to keep their jobs. We try very hard to help them settle their dispute with their employer before it gets anywhere near a tribunal, but for those few who do go through, it will be a significant barrier to them to have to find that sort of money-or we will have to go to our donors to set up some sort of fund to fund it. Time and again, we hear from women who say, "I can see that this is illegal, but I cannot afford to lose my job. I am not going to challenge it."

Q102 Chair: Do you think that this may actually incentivise people to be members of trade unions who hitherto have not been?

Denise Linay: Hopefully.

Chair: Is there any evidence that is likely to happen?

Denise Linay: The evidence that we have-and I think most trade unions have-is that people join for that protection, that insurance, if you like. Being a professional organisation gives additional value, but they join because they are worried about what could happen to them. It may incentivise people to join a trade union.

Q103 Paul Blomfield: I was going to ask a general question about equal pay audits, but I wondered if I could just follow up on Nadhim’s question to Jemima. You talked about the impact of pending legislation. I wondered if you have a particular view about the Government proposal to trade employee rights for shares, and whether you would like to share that with us in terms of the impact on women.

Jemima Coleman: It is quite a controversial proposal. There has been a lot of positive information about the value of employee share ownership, but coupling it with surrendering employment rights puts a different spin on it-particularly if you are trying to encourage best practice and the importance of treating people fairly in terms of dismissing for a potentially fair reason. Introducing a right where you surrender your right to claim ordinary unfair dismissal in return for shares may send the wrong message about the importance of treating employees properly in the workplace.

Specifically, one of the rights to be surrendered is the right to request flexible work, save in relation to when you are returning from parental leave. That, again, could have a disproportionately adverse effect on women. There are issues as to whether introducing the employee-owner status as a policy may in some cases indirectly discriminate against women because fewer women than men may feel able to accept that status because of those constraints in relation to requesting flexible work, for example.

Sarah Jackson: From Working Families’ perspective, what we are really concerned about is the mixed message coming out of Government as a result of this. For something that is going to be of benefit for so few-even the CBI says that this will be a niche product-it is sending out a very strong message that employing people who might wish to work flexibly or take maternity leave is a burden on business. I think that is a tremendously dangerous message to be going out. It directly contradicts all of the other good messages that are coming out around extending the right to request flexible working and the new proposals for shared parental leave. I would really hope that the Government think long and hard about that particular one.

Q104 Chair: I have sought in vain to get a perspective from the employee share ownership movement. Have you seen any opinions from them on this?

Sarah Jackson: Yes. In fact, I gave evidence to the Committee on this last week. I quoted the CEO of the Employee Ownership Association . He said he could not see why the benefits of employee share ownership should be dependent on giving up employment rights. I think that was generally the feeling of Working Families and many other organisations. Employee share ownership is a very good tool for engagement; it is a very good way of motivating employees and improving performance. However, there seems to be no logic to say you then have to give up your employee rights to take advantage of that.

Chair: That is what I would have expected them to say. I just have not seen evidence of it to date.

Q105 Nadhim Zahawi: I was not going to come back on this but I would now. When I look at my career before coming into this place, I founded a startup business called YouGov. The only way you can recruit when you are a startup-because the attractions of going to a big organisation are so much greater-is through equity and share ownership. The risk in the back of our minds always-and it was the inhibitor to hiring more young, talented people to the startup-was, "What happens if it does not work out: if the employee is not right, or the relationship or the business model does not work?"

When I look back, I think behaviourally we would have hired many more people if we were able to say, "Look, for the shares, we have the flexibility that if things go wrong, we can rightsize very quickly without the additional cost." Yes, it is niche, but there is a driver behind this, which is about encouraging startups-especially highgrowth start-ups.

If we want to compete with Silicon Valley and some of these other places there must be room for this sort of thing. It is not because people want to treat their employees badly. I do not think anyone who starts a business-unless they are criminal-would want to do bad things to their employees-certainly not in the hightech end of the highgrowth startups. It would just mean that we would have been more confident about perhaps doubling the number of people we hired rather than being reticent about it because of the cost element that occurs if you need to let people go.

Sarah Jackson: With respect, you already have two years. There is no right of unfair dismissal for two years. Frankly, if a business is starting up and it cannot get its management and performance right in two years, it will probably not be very successful.

Nadhim Zahawi: It took more than two years at YouGov, I can tell you. If you took a snapshot, in two years we were struggling. It was only when we reached our third year that we actually made anything.

Sarah Jackson: You must have known within two years who your good employees were.

Nadhim Zahawi: Not necessarily-that was not always the case. Some people who were close to leaving the business stayed on and turned out to be the stars of the business.

Sarah Jackson: I think it would be better for the Government to be giving the message to startups, "You have two years to get your people policies and your performance right."

Nadhim Zahawi: I just gave you a personal perspective; that is all.

Chair: I think we have gone far enough down this particular argument.

Q106 Paul Blomfield: I set that one running. As you know, the Equality Act 2010 gave Government the power, through regulation, to require private employers to undertake equal pay audits, but they have decided not to pursue that route and introduce such regulations. Do you think taking a different decision and requiring private employers to undertake equal pay audits would have been a better step and would have helped address the weaknesses there may be in a voluntary scheme?

Brona Reeves: I actually contributed to the consultation on the introduction of that law, and that was one of the issues we looked at. I do not mean to give a vague answer, but in part it very much depended on how equal pay audits would have been implemented, going back to the point at the beginning relating to the complexities of the evidence. If your equal pay audit merely required a onestop figure for a company, then all it would really tell you is that there are not many women at the senior level. It would very much depend on how it is implemented.

In terms of a lost opportunity, one of the things we do not see-and one of the things that was decided at the time, as I recall-is that there would effectively be a voluntary monitoring, which the Equality and Human Rights Commission would look into. They would revisit the issue of whether compulsory pay audits were appropriate. I have not seen any employer voluntarily carrying out any audits, and the Equality and Human Rights Commission does not have the budget, apparently, to investigate this issue further.

Taking it to the current proposal, which is potentially to require the pay audit when an employer loses an equal pay case, if we look at the number of cases that would impact, off the top of my head I think it is about 32 a year. We certainly think that the current proposal would do little if anything to change the current dynamic. Would equal pay audits change the dynamic if taken forward? To one degree, we have to say absolutely yes. If we look at the public sector experience, largely, the change-and, let us be honest, the mass litigation-in that area was driven by the job evaluation schemes, as Jemima mentioned. Would equal pay audits have changed that? Yes, I think they would, but we have to balance that with the wider detriment to society of potential further litigation in the private sector at a time of economic crisis. I do not think there is an easy answer.

Q107 Paul Blomfield: Is that a view you would all share?

Jemima Coleman: There is one thing I would add to that. Whilst I think it is true that regulation can drive social change and achieve results more quickly, perhaps, than voluntary initiatives, it is also important to bear in mind, particularly in this context, the importance of having real engagement and commitment to the issue. For example, voluntary disclosure can be driven more by peer pressure if it becomes the norm for all companies to disclose certain things, perhaps where there is investor pressure encouraging a change in behaviour, or Think, Act, Report, which is the voluntary initiative started by the Equality and Human Rights Commission. You can sometimes get a better level of engagement from businesses where it comes as a result of those kinds of initiatives-rather than by having regulation imposed.

Brona Reeves: A neat statistic in terms of how the law does not actually revolutionise things too much comes from Norway. As you all know, in 2003, they brought in a compulsory 40% level of female representation on boards, but if you actually look at Norway’s gender pay disparity, it is still pretty much at the same level as ours.

Sarah Jackson: Voluntary should not be the same as optional. There needs to be a very strong message coming out of Government to the effect that equality and diversity lead to better business outcomes. Pay audits can be very useful tools. It is that same thing about measuring the gap between what you think you are doing and what you are actually doing. Then you can work out what business steps need to be taken to correct the situation.

Q108 Paul Blomfield: May I come back briefly to your point, Brona? On the negative side-you said it with some caution-you said there was a problem because it might lead to litigation. Is that not unduly cautious in the sense that litigation would presumably arise from a demonstration of unequal pay?

Brona Reeves: In part I absolutely hear that, but we can look at the experience of the public sector. There is a legal argument that we have done the equal pay legislation and the law is much clearer as a result of that, but frankly-to shoot all of my legal colleagues in the foot-an awful lot of money and resources on that went to lawyers debating the niceties of equal pay law. I absolutely hear the point that if there is litigation, that means there is a problem, but I think as a wider social point we have to look at where we are spending our money and our time. It was in the press this month that Birmingham City Council has a bill of £757 million in relation to its equal pay. The wider point is: what else could they have done with that money?

Denise Linay: A couple of references have been made to the NHS job evaluation scheme, which has been equalityproofed. There was a big case, Hartley v Northumbria Healthcare NHS Trust, a couple of years ago. If we go down the route of regional pay, local pay and terms and conditions, that evaluation scheme may just break up. We may see more equal pay claims.

Q109 Rebecca Harris: I would like to pick up on what you were saying about how we go forward. One of our witnesses last week said the legislation is simply too complicated and recommended we have a voluntary approach. Basically, the message was, "If you can do it, we expect you to do it." Would you want to comment on whether you think that could work in practice? Basically, the message would be that if you can do it, we would expect you to do it-rather than actually compulsorily forcing companies to do it.

Brona Reeves: I agree that it would be a very positive way to do it. I think in some respects it feels as though we have already been there, to a degree. That was the original proposal: we would see where we got to in respect of voluntary reporting. I think carrying out an equal pay audit is a very large step for any employer, be they large or small, not least because of the litigation risk but also because there is no defined standard out there in terms of what exactly is meant by an equal pay audit.

This goes back to the points we were making on statistics. There is a headline figure, but there is also a much more brokendown figure, which will address every pay scale. The fact that those equal pay audits have not happened-in circumstances where many employers are making very good steps towards progressing equality-tells a very strong story about the actual difficulties of carrying out an audit and the risks of doing so.

Denise Linay: You may see good employers doing it and bad employers not doing it.

Jemima Coleman: In terms of, "If you can do it, you should do it," I think of the model used in relation to the proposed narrative reporting requirements, where quoted companies will have to disclose metrics about the percentage of women at director, manager and employee level. It does not look at pay; it looks at the percentage of women within your organisation. In a similar way to much of corporate governance best practice, you often see the biggest companies leading by example; that may lead to a trickledown, positive impact on other companies.

Q110 Chair: Do you think if the approach were regulatory, there would be a danger of having very ineffective audits-a tick-box approach, if you like-that would meet the requirements of legislation but not really address the problem?

Sarah Jackson: Yes, absolutely.

Denise Linay: I think that is a risk. Certain organisations can be very good at ticking boxes and not actually having anything behind that.

Chair: We now move on to the Clegg proposals.

Q111 Paul Blomfield: Denise, you expressed some reservations about the proposals in terms of shared parental leave. Could you just outline your concerns, particularly in relation to the protections that women now have on maternity leave that they would not have on parental leave?

Denise Linay: I do apologise. I did not actually write our response; I was the only one available to come along today. I think that is to do with the issue about redundancy: there are greater protections in redundancy situations if you are on maternity leave. We do have concerns if the norm becomes 18 weeks. Everything else being equal, if you have an equal partnership between the woman and her partner, that might be okay, but, of course, not all relationships are equal. We are worried that women may come back from maternity leave too early because of that unequal relationship.

Q112 Paul Blomfield: Sarah, did you want to come in on that issue?

Sarah Jackson: I would say that we were pleased that the 18 weeks was dropped from the final proposals, which were published a couple of weeks ago, because we too had shared that concern. We were looking for a model that would enable couples to have the maximum choice but protect the woman’s right to 52 weeks maternity leave, which has, in fact, been enshrined in the response to Modern Workplaces.

We feel we now have something that will be very helpful because it enables couples to have a conversation about how to use 52 weeks’ worth of maternity leave and 39 weeks of maternity pay. Obviously, where we need to go next-in terms of how we support women in the workplace-is to look at what we can introduce for men that are men’s rights alone and are not dependent on the wife or partner’s employment status, which we still have enshrined in the new transferrable leave.

Brona Reeves: Addressing one of the themes raised in earlier comments, we do not see the law as a panacea for all of this. From personal experience, Barclays has always allowed its employees to swap leave if they both work for Barclays; to be honest, the takeup from its male employees is still incredibly small. Whilst on paper it is an absolutely fantastic idea, we still come back to wider socio-economic issues relating to why men may not feel able to take that leave and why women may still.

Q113 Paul Blomfield: I am interested that you raised that point, because anecdotally, and from everybody we have talked to, I am sure that is absolutely right. As a big employer, what can you do to challenge that culture?

Brona Reeves: Speaking personally-not representing Barclays but being employed by a large employer-I think there is a lot you can do culturally and internally. For example, we have a families and parenting network, rather than one that is focused solely on women returning from maternity. It has a much broader scope.

You can offer similar benefits to your male and female employees-although, to be fair, as an employment lawyer I see a large area of risk with the new legislation that it will actually mean that there will be a reduction in the benefits offered to women, because the risk to an employer will be that they have now many more employees who can access parental leave and they cannot simply pay the woman for three or six months and not the man.

I think there will be an initial levelling down, but it is more important to look at this holistically. It also goes back to many of the things we have talked about in relation to parttime and flexible working. We have fabulous opportunities now in terms of technology to be much more flexible in how we approach work. As long as that is applied equally to women and men-and promoted by large and small employers alike-we have an opportunity to have a much more diverse work force working in many more diverse ways, but we have to promote that.

Paul Blomfield: I am sure we could have a long conversation about this, for which we do not have the time

Rebecca Harris: That is what I was going to talk about.

Chair: I was about to invite you in, Rebecca.

Q114 Rebecca Harris: At the beginning, we spoke about the difference between parttime and fulltime in terms of the pay gap, stereotyping and whether there is a lesser level of commitment and so on that affects this. Much of the evidence we saw from the "Woman’s Hour" phonein we had a week ago was people ringing up and talking about this. They had come back on a parttime basis at a lesser level and were not getting promotions in the same way or not getting the same level jobs.

What could we do to try to promote parttime, flexible working generally and promote a parity of esteem? What would you recommend?

Jemima Coleman: I think there have been some funding initiatives for quality parttime work programmes. In our report, we referred to one in place at Royal Mail, where there is specific encouragement for the organisation to implement, at senior level, parttime arrangements or job share arrangements, which was seen as a key way of improving female representation within the organisation.

There is also quite a lot that can be done generally in terms of celebrating best practice and drawing attention, as some organisations have done recently, to power parttimers, people who are holding very senior roles on a parttime basis, celebrating those and rolling out best practice-perhaps even having some kind of guidance to best practice so that it is no longer seen as a careerlimiting move to take a parttime role.

Sarah Jackson: I think there are three things that need to happen: one is role models at the top. Jemima referred to the power parttime list, which was published last week. We did something similar about five years ago, where we were looking at case studies of people holding down senior jobs on parttime patterns. It is very exciting to see that five years on it is possible to produce a list of 50 senior parttimers. However, still, five years on, only four of the 50 are men. There is a real need for male parttime role models to come out of the woodwork.

The second thing we have to do is make sure that recruitment into flexible and parttime work is available at every level. That is where we really have to look at how jobs are advertised, and get away from the legobrick notion that every job is a MondaytoFriday, 9 to 5 job. For example, I am working with a group of private sector employers within the DWP; we are looking at developing a strapline that Jobcentre Plus and employers will be able to use on a voluntary basis to alert people to the fact that a job is available on a flexible basis. It will say something like, "We are happy to speak about flexible hours."

The third thing we need to do is develop more skills in job design, because it is a challenge for employers to think beyond the legobrick approach to work. We all know what a job looks like: it does look like Monday to Friday, 9 to 5. We must change that because only then will we release the potential that men and women have to contribute to the organisations they work for and also share the caring at home, so that people are not funnelled into, "I am a woman; I do the caring," and "I am a man; I have the career."

Q115 Rebecca Harris: I agree we want to do that, but I am not quite sure how we do it.

Sarah Jackson: We do it step by step. We start off with the best practice. Certainly, organisations like Herbert Smith Freehills and Barclays, who are both members of Working Families, are already doing good things. We have the power parttime list. We can put more effort into highlighting role models, not just within organisations, because you have to be able to look up through an organisation and see someone who looks like you or looks like how you might want to be in 20 years’ time. We also need to normalise this within the public debate; that is where the power parttime list is brilliant. It has had fantastic coverage; let us have more like that.

Let us use the public sector equality duty to ensure that not just the Civil Service but the NHS, for example, starts advertising every post on a parttime basis. Let us normalise that so that the private sector also think, "If we want to get the best and have the widest possible talent pool to recruit from, we should be advertising this job as being at least available for a discussion about what the best working pattern to suit the talent and the job is."

Skill in job design is something that we will have to work on harder. There are organisations that can offer that training and expertise. Certainly, Working Families has been working with our members to help them identify sources of help there, because it is something that managers feel very anxious about.

Denise Linay: We have a strange situation in midwifery where you are more likely to be working part time than full time now. That is not just because of family pressures; that is because of the pressure of midwifery. Midwives tend to reduce their hours and then take up opportunities doing agency and bank work, for example, to make up their hours. It is the pressure of midwifery.

Parttime work is not such an issue; it is flexible working that is the issue. Certainly, where a trust has a shortage of midwives, there is less opportunity for employers to be able to have flexible working opportunities.

Brona Reeves: In terms of the law’s role on that, I think the ELA’s perspective is this: do we see a role for the law in terms of its current structure? We probably do not. What the law says on flexible working at the moment is really clear-cut. There is a specific statutory process to be followed. There are only limited reasons an employer can turn down flexible working. There are, of course, arguments about whether employees actually will bring claims under that and whether employers will take a tickbox approach to that. In terms of what the law can do to advance that, I think the only steps the law can take would be positive ones-as opposed to implementing more legislation on an absolute right to parttime working.

Going back to the reporting that we talked about earlier, one area where we could see a role for the law is in requiring employers-perhaps starting off with larger employers-to report on what they do to promote parttime and flexible working and to promote what they do positively as opposed to what they do negatively, i.e. what they must do.

Q116 Chair: Could I just pick up a point that Denise made about midwives? Just so that I can be quite clear in my own mind, did you say that there are many midwives that work parttime but actually work in other professions as well?

Denise Linay: No, they would have a contract that was parttime and then they supplement that with bank and agency work. That could be within the same trust. It is just that they are not committed to fulltime contracted hours. They have that flexibility. That is largely because of the pressures of working in the NHS at the moment.

Chair: I just needed to clarify that.

Denise Linay: In terms of flexible working, the criteria used to turn it down are fairly broad. An intelligent employer can always fit something into those criteria. If an employer does not want to offer flexible working, then the only way is to go to law. Most midwives-and certainly ours-do not want to go to employment tribunal because they believe-whether this is right or wrong-that it would have a detrimental impact on their future careers.

Chair: Thank you. I think we have reached the end of our questions. I would just say, as I do to all our panels, that if you feel in retrospect that there is something that you would like to add to the answers that you have given, do feel quite free to write to us and give us that information. Equally, of course, if we feel that there is a question that we should have asked you but did not, we may write to you and would be grateful for your response to it.

That was incredibly helpful. Thank you all very much.

<?oasys [pg6,cwe1] ?>Examination of Witnesses

Witnesses: Ceri Goddard, Chief Executive, the Fawcett Society, Daisy Sands, Policy and Campaigns Manager, the Fawcett Society, Helen Wells, Director, Opportunity Now, Rachael Saunders, Head of Communications & Policy, Opportunity Now, and Sophie Garner, Discrimination Law Association, gave evidence.

Q117 Chair: Good morning and welcome. I will first ask you to introduce yourselves for voice transcription purposes, starting with you, Sophie.

Sophie Garner: I am Sophie Garner, Discrimination Law Association.

Rachael Saunders: I am Rachel Saunders from Opportunity Now, Business in the Community.

Helen Wells: I am the Director of Opportunity Now and my name is Helen Wells.

Daisy Sands: I am Daisy Sands, Policy and Campaigns Manager at the Fawcett Society.

Ceri Goddard: I am Ceri Goddard, Chief Executive of the Fawcett Society.

Q118 Chair: Thank you very much. I would particularly emphasise the point that I made to the previous panel. Some of the questions that we ask you will be personspecific; others may be general. In the case of general questions, do not feel that you all have to answer every question if, in fact, the points you wanted to make have been covered by another panellist. Again, even if there is a personspecific question, if you feel you can add to it, feel free to do so.

May I start? Again, this question is to all, but, given that there are five of you and only limited time, I would particularly emphasise my previous comments. What is the business case for equal pay between men and women? How would you summarise it? Who will lead on this?

Ceri Goddard: I will start with some general points. I think it is important to look at the business case on two levels. First of all I think you need to look at the economy as a whole, which is obviously very pertinent to the times we are living in. The business case for women’s pay being equal with that of men is that first of all you will see revenues going up into the Exchequer. Secondly, you are likely to see the spend on benefits going down. Thirdly, there has been a raft of evidence from the Fawcett Society, the EHRC, independents and others to show that increasing women’s participation in the labour market could add literally billions, potentially, to our gross domestic product. I do not think any of those points are necessarily politically contentious. I think all political parties would concur to differing extents with those basic points.

I think there is then the business case on a sectoral or organisational level. There is less of a case being made thus far in the private sector. There are probably more examples of cases made in the public sector-I think that was probably referenced by some of your previous evidencegivers-because of the nature of the public sector equality duty and the like. There has just been better practice there. That said, there are some growing examples of good practice in the business sector. I think it cuts across both. The business case in the private sector is first of all around three main areas, recruitment: getting the best talent pool and the best staff, retention of those staff, and productivity, i.e. the bottom line, which I think is also quite important. There has been significant evidence to suggest that it also has an impact on how profitable businesses are.

Q119 Chair: Earlier I think you said that revenues would be up, and you have made a number of assertions and very confidently claimed that there is general agreement on them. Can you point to research to provide an evidence base for your assertions?

Ceri Goddard: Regarding the assertion around revenue, one particular study I was thinking of was carried out by the Equality and Human Rights Commission, the Women and Work Commission, a few years ago. They looked in quite a lot of detail. They took an estimate of how many women were participating in the labour market at the time. They looked at how many women would want to participate if barriers to work were removed, including concerns around unequal pay. They then did a calculation about what that would contribute to women’s employment activity levels in the market, and therefore what that may contribute in terms of tax revenue and the Exchequer. As you can imagine, there are differing conclusions from different pieces of research.

However, for example, only last week Maria Miller, the new Equalities Minister, in her first speech on women in the economy, made it quite clear that this Government saw women’s greater participation in the labour market as key to economic growth and cited a growing critical mass of evidence. But that particular piece of evidence on the revenue was from the Equality and Human Rights Commission.

Q120 Chair: Playing devil’s advocate, can you think of any research done that is actually counter to what you have claimed?

Ceri Goddard: No, in short. I think that is because it is relatively recent. This is an important point on the business case. The Fawcett Society and others would acknowledge that there is still more of a business case to be made and led by business itself, which does not suggest there is not one. It is only 40 years since we had the Equal Pay Act. Even though it is quite shocking how little we have progressed, it is not that long a time.

The business case has social and cultural arguments. As I mentioned, for a long time it was seen predominantly as a social justice and human rights case, which I would argue is still hugely important-and, actually, should be the primary concern of this Committee and of Government. With that said, happily there has also been a growing body of work to show that this is not just about equality legislation being a tickbox but also a tool. This is about building a stronger and more productive economy and workplaces. I think you are seeing a growing body of evidence there but it is behind, somewhat, I suppose, quite significant socio-economic legal evidence around the human rights and social justice argument, which I would argue is of primary importance.

Q121 Chair: Would any other panellists like to add or subtract from anything Ceri has said?

Helen Wells: I would like to add rather than subtract. Opportunity Now works and has worked with business for 20 years in trying to communicate, search, find and articulate the business case. I have lots of examples. For example, one of the FMCG companies that we work with looked at the make-up of their most successful brands and their most successful teams that deliver to their retailers. They found that the teams that had the largest financial profit were the teams that were diverse. Those are small examples of the business case, but it extends through to the much bigger macroexamples. I know both the Women and Work Commission and the Women’s Business Council have estimated women’s contribution to the economy, and it could be somewhere between £23 billion and £26 billion, depending on how you look at it.

Q122 Chair: Have you or would you be able to provide us these microexamples?

Helen Wells: Absolutely, yes. We run something called The Times Top 50 Employers for Women and we actively ask for examples. Here is another example that is a small example but one that demonstrates the business benefit. One of the law firms we work with estimated that if they lose a female lawyer four or five years into their training, it costs them £200,000. Articulating that kind of number does focus minds in terms of saying that this is very much a commercial reality and a business case. This is not just a women’s issue; it is also one of economic and business success.

Sophie Garner: I also do not have much expertise when it comes to the research on this point, but obviously the concerns about the business case would presumably come from organisations that at the moment have a very limited pot of resources. The judgments that have come out in relation to equal pay in the public sector have been devastating for many organisations.

I suppose, with regard to equal pay, what you have to do is retain women in there. If the whole object of the exercise is to get more women involved and active in the economy, they need to have mentors and role models. If we ensure that there is equal pay going through an organisation up to its upper echelons, we are going to encourage more women to come in and stay in a working environment-and stay economically active.

Q123 Chair: May I move on to a question, which I asked the previous panel, about the public sector equality duty? Do you think section 149 of the Equality Act 2010 works in the public sector, and do you think it is a template that could work in the private sector? I am asking this to all; is there anyone who would particularly like to lead on it?

Helen Wells: The principles behind the equality duty and the Equality Act we very much welcomed. The principles in terms of measurement and knowing where women are within your organisation, and making that public and being transparent about it, are powerful drivers for creating change.

Ceri Goddard: Very briefly, the key thing that the public sector equality duty reflects is, I suppose, a positive obligation on public bodies to preempt discrimination. It is about prevention rather than cure. I think there is some powerful learning there in terms of applying that to the private sector. My colleague mentioned earlier the huge cost of equal pay tribunal cases against public sector bodies. One wonders how much would have been saved, had those bodies been acting in accordance with the law in the first place and not paying their staff unequally.

I think we look at the legislation entirely the wrong way around sometimes: closing the stable door after the horse has bolted. There is a principle there about putting much greater onus on the private sector to think in advance whether or not their activities, business and employment practices are likely to further gender inequality. However, this should not just be because of a legal requirement but also because of the business case that we have touched on. If we are going to apply those principles, it is hugely important that is done, both in the context that we are a civilisation and these are basic standards of equality, and because it will make your business more productive and more effective. That is a basic point of principle that I think could be very helpfully applied in the private sector.

Daisy Sands: I think the principle of the public sector equality duty should be regarded as something that is very productive. It is about enabling public sector bodies to get their services and policies right to obtain the best fit for their service users, and to best use their own resources for that purpose. Those principles are certainly applicable to the private sector as well. But I would say that we at the Fawcett Society are concerned about current Government rhetoric around the public sector equality duty and noises that public bodies no longer need to produce equality assessments. However, that of course is contrary to the law as it stands; that due regard duty is very much in place and public bodies will need to show how they pay due regard to the law. There are conflicting messages coming out of Government there, which is concerning for us.

Sophie Garner: I would agree with that. The SchneiderRoss report of 2009, commissioned by the Government Equalities Office, looked at this. Almost universally, the people responsible for enforcing the PSED found that it was useful. This is in relation to the old equality duties before they were merged into the single equality duty. It is one of the bits of evidence that was used when it was pushed forward and the single equality duty came into being.

One of the problems they found was introducing it into the private sector by way of procurement. That was one issue that the respondents felt could use a bit of beefing up. There is obviously an implication from people who have used it on the ground, who think it is useful, saying, "Actually, it could be extended further into the private sector."

Rachael Saunders: May I follow on from that? I think there is evidence from some of our members. One of the drivers for their work on equality has been their work with public sector organisations. As public sector organisations, there is an expectation on them that they reach the standards expected in the public sector. The public sector equality duty is already a driver for driving up standards in the private sector, so there is no hard line there currently and it absolutely would make sense to look further at procurement and how that could be strengthened.

Sophie Garner: I would agree also with the comment about mixed messages. In fact, equality impact assessments are not necessary under the public sector equality duty. They are very useful; it is a good idea to do them; however, they are not actually a requirement.

There is all this rhetoric: "The burden that business is under is absolutely dreadful." Actually, business does not have to do this anyway. It seems that on the one hand the Government is pushing forwards this agenda, as I was talking about-and trying to get more women into the work force and make it more diverse-yet, on the other hand, it seems to be chipping away at the edges of things that have actually been very useful.

Q124 Paul Blomfield: I wonder if I could ask a question of Sophie. Taking a different perspective of Government policy, in your written evidence you expressed concerns about the way that the Government’s spending plans were negatively impacting on women. I wonder if you could develop that point and explain why you think those policies are disproportionately affecting women.

Sophie Garner: In its overview of spending in 2010, the Government indicated there was an issue with regard to the fact that most single parents were mothers and most lowearners were mothers. When you look at the actual impact in financial terms, there is pretty much a parity across the board in terms of cuts to benefits and tax credits, etc, but the problem is that, because there are so many more women who are poorer and are single parents, as a proportion of their net income those cuts really bite.

One issue that is key in this is the proportion of women who work in the public sector. Of course, a much greater proportion of women work in the public sector than men. There is a doublewhammy effect, because those women are also relatively senior within public organisations, so there is a situation where there are a large number of redundancies in the public sector, and that is impacting many families. Many public sector workers are perhaps secondwage earners in their home. Their mortgages will be jeopardised as a result of the fact that they have lost their job. The whole picture, therefore, of all those redundancies tends to focus in on problems that are being caused to women rather than men. Those are two of the key points.

Q125 Mr Walker: I would be interested to hear from all the organisations on the panel what their views are regarding the proposals for more flexible working-particularly flexible parental leave, with parents able to choose how they share care of their children.

Helen Wells: There are two things here. One is that extending the right of flexible working to all is a powerful message that this is not just about mothers. Obviously, our end point is to create greater parity between men and women, but I think sometimes the messaging around flexible working-that it is a reasonable adjustment for mothers and an adjunct to business as usual-actually stops it being mainstreamed into the culture of organisations. Extending the right to request flexible working to all is very positive. We really work to try to encourage, communicate and demonstrate to organisations that it actually brings business benefits and solutions.

I also think the change to the parental legislation is a positive move, in that it will bring greater parity between men and women and not have such a gendered view-as we do at the moment.

Daisy Sands: I would echo Helen’s points, particularly around flexible working and the benefits there, but we have a number of concerns in terms of the actual legislation. The statutory requirement has now being replaced in law with a code of practice, which is actually weaker. There are some concerns about that. An ongoing concern that we have is that there is a 26week qualifying period; you are only actually able to request flexible working once you have been in post for six months, which obviously presents problems for those with children, for example, who will need and utilise these practices the most. Obviously, on entry into jobs, that option is not available, which presents a conundrum.

Also, in terms of conflicting messages, we have concerns around the messages coming from Government. Obviously, flexible working is one of the provisions that is being included in the new employeeowner scheme, which is the rightsforshares scheme currently being processed through Government. As I said, that very much gives a mixed message, because the message is that flexible working is a hindrance to business, is red tape and hinders growth. If we look at the Modern Workplaces Consultation, very much the opposite is being said. It talks about flexible working as a productive thing for business. We are very concerned about mixed messages there.

On flexible parental leave, we certainly very much welcome the changes. Obviously, we are disappointed that there has not been an extension to paternity leave. I think this is really about culture change. For those couples who are informed, have that information and are able to take those decisions, it is great, but it really needs to be supplemented with an awarenessraising campaign so that both employers and employees know that these provisions are out there. The Government at the moment estimates that only a maximum of 8% of fathers will take up this initiative. It needs to be twinned with a campaign to drive attitudes and awareness in order for this to be utilised, but I think ultimately the Fawcett Society would support a more Scandinavian model, i.e. a "use it or lose it" scheme, which is where you see the real shift in culture taking place.

Sophie Garner: Certainly, parental leave is something to be welcomed. Again, it would have been better if that was increased a little bit, but it is good. It is a good start.

Generally on this particular issue, it is all very well that the measures are coming at an early stage, but what you see with many professions and organisations is the problem of retention. You get this lovely bouquet of flowers at the beginning, as it were, and then halfway through your career, as you progress up, things turn a slightly different colour. I think it is very welcome. In terms of flexible working, I do not know whether there will be any more questions on that or if I should talk about it now.

Mr Walker: No, please do.

Sophie Garner: Again, it is a welcome move but there are certain issues with it. Certainly, I agree with the points that have already been made. It is all very well to have these organisations that sign up to Think, Act, Report and have these wonderful flexible working policies and have award schemes; that is lovely, but the vast majority of employees are based with SMEs and do not have employers who are that enlightened. Having an awards scheme does not necessarily incentivise them to get on and deal with the issue on a daily basis.

I recently did a little straw poll of lawyers I know who have dealt with these cases. Very few cases under flexible working regulations come up for consideration by the tribunals because, for reasons already stated, women just cannot afford to take those claims and risk losing their job. That is the reality of the situation. Something that might be useful is perhaps looking at how the flexible working regulations work as it is and at what reasons employers give when they turn down people’s applications for flexible working. I think one of the last witnesses used the word toothless; that is the same word I would use as well. Employers can virtually make up any reason they want and mask it behind the set of reasons that are deemed acceptable under the regulations.

There is no way of getting around that at present; there is no way of challenging that. Looking at how this will be taken forward, there are an awful lot of men who will have this option-fathers or not-but they will be looking at what impact it will have on their job. They will look at how it worked for women. It is not always a happy picture. Perhaps we should look into research into that particular aspect and, at the same time, perhaps at how you can produce flexible working in very small organisations. That would be good. I think this point has already been made. Tailormade or identikit examples of this can be produced for people.

Q126 Mr Walker: I had a followup point about what you said about the retention of people who have gone back to work. I notice in the written evidence from the ELA there was a focus on American Express and some good examples there of what they had done. I was just wondering whether you could expand on that at all.

Sophie Garner: I cannot remember exactly what they did; that is one of many examples that are set out in our Equality Opportunities Review. I know that Opportunity Now deals with a lot of those organisations. Generally, these measures involve flexible working where men are able to work at home, where they are able to take more flexible parental leave and other measures of that sort, which are pretty normal for large organisations and are within their capacity but not within the capacity of small organisations.

Q127 Paul Blomfield: This is at a slight tangent, but given that we are talking about small organisations, in preparation for this inquiry I held a roundtable in Sheffield, which was for women in business. It was attended by a lot of women who run SMEs, particularly at the micro end of SMEs. Incredibly important though it is, a lot of the debate we have on regulation is focused on large employers, yet we are looking at economic recovery being largely driven by the SME sector.

Looking at that sector in my area, there are an incredible number of able young women who are driving the SME sector and yet in that context regulation is not what helps them. Clearly, they were sharing experiences of businesses collapsing when they were trying to balance the responsibility of running a business with childcare.

I just wondered whether you had any thoughts, as a panel, in terms of what ways the Government could intervene to support women in that situation?

Helen Wells: Opportunity Now’s view is that too often flexible working is positioned as a burden to business; actually, we like to look at it on the other side of the coin. How does it actually help businesses? For example, there is a law firm where all of the lawyers are based at home. They have much lower overheads. There are ways in which you can position flexible, agile and smarter working such that it can aid business, rather than be burdensome.

Q128 Paul Blomfield: I fully accept that argument, but I am looking at microbusinesses on the SME spectrum, where stepping back is incredibly difficult. I am also looking at the more developed maternity packages that are available in large businesses and are employersupported. They do not apply in the same way to precarious small businesses in their early years of growth. In what areas could there be more intelligent intervention to support that sector?

Rachael Saunders: May I suggest that part of the answer is in your question? The lack of access to affordable, flexible childcare in many places is an issue. You would also hope that the culture change that would come with the change to paternity policy might mean that in that situation, if a woman was running a small business, her partner might take on a significant level of childcare.

I do not think there is a single silver bullet. However, a culture change that sees families and the state or voluntary sector take a greater role in providing affordable, flexible childcare is a path to change that we need to support those women.

Ceri Goddard: I would agree with everything that has been said, particularly the point on childcare. The Government has a programme about supporting enterprise and smallbusiness mentors and the like at the moment. One thing I have heard women on the Women’s Business Council and small business owners say is that that would be very helpful. It is interesting to look at the public sector equality duty and the Government’s own duty to properly assess whether or not these schemes are appropriate. For example, there is a scheme where they have 500 business mentors and they are investing in providing advice to businesses on the ground to SME businesses. It was suggested today that perhaps they could guarantee an amount of time and investment on femaleled businesses, for example, because a growing number of women are going into enterprise but they still are outstripped by men in terms of ownership of small businesses.

We are doing some work with Google at the moment, who have been looking, in particular, at internet businesses and finding-unsurprisingly, if you think about it-that there is a greater percentage of women getting involved in internet businesses because it fits around a lot of their caring responsibilities. They were saying that they have been doing a programme with BIS. The Government have been promoting the use of the internet in microbusinesses, but interestingly, they have not done anything targeted at women, despite the fact that evidence has shown that women would disproportionately benefit from this. A simple thing might be to start by reviewing the current package for SME businesses and enterprise with perhaps a more careful eye to whether or not it is benefiting women and looking at that systematically.

I really echo the point on regulation. I think it is unhelpful to say that these regulations do not help these women or small businesses. I would disagree. We have just touched briefly on some of the benefits of flexible working and some of these regulations in terms of the business case. If you are a small business, I would guess that you do want to retain your staff; you do want to set up a working model that means that your productivity will be higher.

Anecdotally-I would stress this is anecdotal-there does seem to be a growing number of women employers and small business employers who are employing other women, other carers and other mothers and fathers, precisely because they have an understanding of that and are setting up business models to reflect that social reality. What those small businesses and those women need is a combination of regulation and investment; let us make them alive. We have a raft of regulations and hardly any investment, whether it is in the Equality and Human Rights Commission or anywhere else, targeting small businesses. How do you do this? What does this look like if you have five or six staff members? We need practical examples. That would make a world of difference. I think the research is there. A small investment at this point could pay a significant dividend for those women-plus the structural things around childcare and investing in business mentors. Cutting Sure Start will not help particularly, especially in a constituency such as yours.

Q129 Mr Walker: I just wanted to come to Opportunity Now and ask about your involvement in the Think, Act, Report process. How do you feel that is going, one year in?

Helen Wells: In terms of the principles, for 20 years we have said to businesses that transparency, knowing where you are, doing something about it and measuring are levers for creating change. Yes, we were involved in Think, Act, Report. We have promoted it; we have a transparency award that we give to organisations that put data in the public domain. Having said that, I think there is more that can be done to communicate it. I have conversations with many businesses on a daytoday basis and I think it is relatively under the radar in terms of people knowing about it. We absolutely support the principles of organisations taking their own action.

Q130 Mr Walker: We were just hearing from Ceri that the smaller organisations are perhaps where the opportunities are. How far down the scale of business organisations do you feel that initiative reaches?

Helen Wells: We work with large employers. If they are members of Opportunity Now they tend to be more progressive and doing more in this field. A lot of those organisations do not necessarily know about it. In terms of how far it has reached through the business pipeline, I definitely think more could be done.

Q131 Mr Walker: Do you see it as an alternative to regulation or something that is complementary to it?

Helen Wells: I agree with the principle that the change that we want to see in workplaces, society and the economy cannot be driven just by regulation. Some of the challenges are so complex and nuanced that the process needs to be owned by organisations.

For example, we have been doing some research. One of the statistics we have found is that organisations that do unconscious bias training for the people who make recruitment decisions are eight times more likely to have women be successful in their recruitment. There are some really complex cultural issues that cannot necessarily be addressed by legislation alone. Encouraging organisations to understand why they need to change, how and in what ways they can change and measuring that impact so there is a virtuous circle in terms of saying how it is good business is a good start. In terms of publicising it so people know about and understand it, there is a lot more the Government could do.

Rachael Saunders: May I add one piece of information? We are in the process of publishing our annual benchmark and, of our members-i.e. mostly bigger, progressive organisations-54% privately gave us information about their pay gap. Of that 54%, 13.3% have already put it in the public domain. Of the more progressive organisations, just over half are able and prepared to give us the information and a smaller number have published it. Transparency is a really important lever but it is very much a journey that we are quite near the beginning of. However, our members have always been very clear on this sense of transparency. The competition and peer pressure that it generates is a really important lever for change.

Sophie Garner: I would endorse the point in relation to its being a twopronged approach. There must be both. Certainly, in terms of publicity it must come directly, I would suggest, from Government. It must be something that filters all the way down and is something that people really pay attention to. Unfortunately, it seems the measures we have-Think, Act, Report, for example-do not quite get there. It needs something extra; it is difficult to see what that is other than an amazingly expensive advertising campaign. However, if you are looking at changing such entrenched attitudes it must be something very significant in order to reach the majority of employers.

Ceri Goddard: The Fawcett Society would also say that it is critical to have both a regulatory approach and a voluntary approach. Specifically on the small business front, I noticed in the last session you talked about the pay auditing requirement. There is no more powerful an advert than the threat or possibility of there being additional regulation. It is interesting: when you look at quotas in Norway or when you look at the Equal Pay Act here when it first came in, what was presented in both cases was that the Government was going to give itself the power to do that; everybody knew it had the power to do that, but it did not use it straight away. That was a significant incentive to businesses to get themselves together. It does not mean it cannot apply to small organisations.

Actually, we can look across the sea at Northern Ireland and Quebec. In Northern Ireland, it was not about equal pay but there was huge resistance about whether smaller businesses could pay Protestants and Catholics the same. They actually managed to come up with guidance, regulation and advertising to show that organisations as small as 10 people could do that. Similarly, in Quebec and Canada they came up with practical guidance and regulations covering organisations as small as 10 people. It has shown it can be done. It is actually about the political will combined with the business will. It is really important that it is not just people in Whitehall and politicians who set out exactly how businesses should do it but they should set a minimum bar and outcome that is expected. Of course, there can be a greater role for businesses in leading on what that looks like. It has to be both.

It is very unhelpful at the moment, in times of austerity and recession, to see equality pitted against growth in this way and this described as red tape. I cannot emphasise how unhelpful this is. It is not only not moving us forward; it is threatening to take us backwards.

Q132 Chair: May I just ask, on the concept of socalled red tape and so on-I have not asked this panel-do you think there should be compulsory pay audits?

Helen Wells: I think the threat of compulsory pay audits is quite helpful, but pay audits are, in and of themselves, a diagnostic tool. They are a tool to lift the stone up and see what is underneath it. There needs to be further action, buyin and ownership. Businesses then try to unpick and solve some of the challenges they have found. In and of themselves, they are a useful tool for organisations to understand where they are and some of the challenges, but they are not the end point. They are a start on a journey in terms of understanding-

Chair: I am still not clear. Do you think there should be a legal compulsion for companies to have one?

Helen Wells: No, I do not.

Ceri Goddard: The Fawcett Society’s position is that it would be helpful if there was a legal compulsion, though, like any other kind of what are called special measures in international, domestic and European human rights law, the idea is that they would be in place to effect a change in culture. To effect a change in practice you would hope you would not require compulsory audits for the next several hundred years, but the reality is that progress on the pay gap in the UK is glacial and is actually stagnating at the moment. There is a threat that it may be going back with the significant numbers of women moving from the public to the private sector as a result of austerity policies.

It is not only the Fawcett Society; there are legal professionals, trade unions and some employers who are doing it themselves. I think there is a growing argument that there should be some kind of legal compulsion. Whether or not it should be called a legal compulsion is really quite helpful. The whole law seems topsyturvy to me. As an employer who has to do a payroll, surely most employers would say, including the CBI, that their objective is to pay men and women fairly. Nobody would dispute that. Why is it so hugely problematic for them to then start to do that in the first place? There could perhaps be some voluntary period for them to get their house in order, which I think is perfectly reasonable.

On a historical note, they did not really have that when we moved to the notion of equal pay for equal value. It could be done in such a way that gives business and employers time to do it, but I really think the time has come.

Chair: We have two different perspectives on this.

Sophie Garner: The Employment Lawyers Association’s position is the same as the Fawcett Society’s. Yes, there should be some regulation in place to ensure that gender pay gap information is published. It is published by organisations. I know that in the last panel a comment was made that this may to a certain extent be a tickbox exercise. Tickbox exercises can be useful, because they bring those issues to the forefront of the employer’s mind. It being in their consciousness is something that does start to move the process forward. Generally, though, the ELA is in favour of this.

Q133 Chair: That is interesting, because you partly anticipated my question about the danger of its becoming a tickbox exercise. Would you say that even if it were a tickbox exercise-and you have already answered that question-it could actually still be useful in promoting this?

Sophie Garner: Yes, I would say it would be. As I say, it brings it into people’s consciousness. It just means that they are having to go through the exercise of looking at exactly what they are doing. I appreciate that for many businesses it is very difficult to achieve parity, because market forces can, at different times, affect which people are employed. Over time, however, this should even itself out. To publicise that information and to make clear that those organisations are good and have enforced the legislation in this area does not seem to be a bad thing. It does not seem to be overly burdensome, either. If you have a payroll department or somebody who does payroll, it would presumably be relatively simple to put that forward.

Helen Wells: Obviously, I want better parity between men and women and for men and women to be paid better. Some of my reticence about equal pay audits, in and of themselves, as a solution, is that they look at one part of the jigsaw puzzle. They are an important part of the jigsaw puzzle but they are looking at the process, the organisational barriers and pay and reward. They do not address or look at some of the bigger picture in terms of where women are in organisations, occupational segregation and leaking pipelines. We have always championed them as a very important tool, but I do not think they necessarily are the solution for pay parity.

Daisy Sands: I would add, as well, in terms of looking at the public sector specifically, obviously the public sector tends to have national pay scales, which means that there is a greater degree of transparency in the public sector on the pay gap. Although it may not be clear to draw a line between the smaller pay gap in that sector-obviously it is a multifaceted thing-I do think those national pay scales in the public sector have achieved a reduction in the pay gap in the sector overall.

Q134 Chair: We are likely to have regional pay in the public sector.

Daisy Sands: That is a great concern for the Fawcett Society.

Chair: We are running out of time.

Rachael Saunders: Briefly, the issue with this conversation is that people mean a lot of things when they talk about a gender pay audit. We can talk about a gender pay audit; what Helen has spoken about is a very in depth, diagnostic tool. Even in some parts of the public sector where in theory there is a clear kind of pay scale there is an awful lot of muddiness. There is a lack of clarity around who received bonuses and additional benefits.

A lot of the equal pay cases that are going through the courts now are not about basic pay; they are about all the other things that people get. Even in the public sector, where people have the nationally negotiated Green Book or whatever, it takes time and a lot of trust internally. You have to turn over a lot of stones to find out what is really going on. You need to have a willingness from the organisation itself-both a leadership decision and trust within the organisation-to unpick that. That is quite different to what other people might also be talking about, which is asking, "You have a certain number of grades in your organisation. How many men and women are there at each of them? Are people on a parity of grade being paid in the same way?" It could be the even simpler thing, which was talked about a number of years ago, which was just an overall organisational pay gap number.

Part of the challenge is that you can define what you mean by a gender pay audit in different ways and each of us would have different opinions about how you might use each of those different tools. This is quite a broad, complex discussion. Our perspective is that the gender pay audit is that really detailed deep dive into how people really are being paid and rewarded and valued. That is best done when the company chooses to do it, has bought into it and is led effectively and the organisation as a whole is willing to offer up the reality of what is really happening. You are unlikely to achieve that in an authentic way through compulsion.

Chair: Thank you. We have opened up a number of fairly big debates here, actually. I would repeat what I said to the previous panel. If you feel that there is additional evidence or answers that you have not been able to give, please send them in as supplementary evidence. Equally, of course, we may decide that we would like to ask you one or two more questions, which we will send to you. That was very helpful. As I say, I think we could have gone on for quite a long time on these issues.

Examination of Witnesses

Witnesses: Sarah Veale, Head of Equality and Employment Rights, Trades Union Congress, Ro Marsh, National Officer, FDA, and Sharon Greene, National Women’s Officer, UNISON, gave evidence.

Q135 Chair: Good morning and apologies for running slightly behind time. Actually, you could well have come in before.

Ro Marsh: We thought about it but decided to keep sitting out there and chatting.

Chair: Thanks very much and welcome. May I invite you, for voice transcription purposes, to introduce yourselves, starting with Sharon?

Sharon Greene: I am Sharon Greene, National Women’s Officer, UNISON.

Ro Marsh: I am Ro Marsh, the National Officer for Equality and Diversity for FDA.

Sarah Veale: I am Sarah Veale, Head of Equality and Employment Rights at the TUC.

Q136 Chair: You presumably were not there when I said this to the previous panel. Some questions will be person-specific; that does not preclude anybody else from adding to or subtracting from them, if they feel it is appropriate. Equally, some questions will be to all of you, but do not feel that you have to supplement what others have said if you are just repeating. We are timelimited and need to move as quickly as possible.

May I start with a general question? It is to all of you, although one of you might like to lead on it. Do you think the public sector equality duty, section 149 of the Equality Act 2010, could be used more effectively to address inequality in the public sector?

Sarah Veale: The short answer to that is yes. We think the public sector equality duty for gender has been a very important tool for employers and trade unions in the public sector to work together to achieve systemic change. The problem with the system of individual rights to shift the gender pay gap and other important sex discrimination issues is that it is incremental and does not always have a lateral impact.

The particular advantage of the duty is that it works across. At worst, it would be a boxticking exercise; at best, it is not that. It involves discussion and iterative processes; it can be used differently in each bit of the public sector. There have been some examples that we have picked up where it is beginning to have quite a beneficial impact. There have been one or two cases that the EHRC have picked up as well. The Southall Black Sisters was one particular example. That was actually the race duty, but it shows how this can be used actively to deal with problems when they occur in public bodies. I think colleagues in the public sector, actually, might be better placed than I am to talk about how effective it has been.

Sharon Greene: Yes, absolutely. From our point of view, the public sector equality duty was never meant to be an adversarial duty. It was always something that we welcomed as an opportunity to work in partnership with employers and Government to deliver goodquality services and the best outcome for service users and providers.

We welcomed the opportunity it presented us to talk to all the policy makers about what was best for communities. None of us are experts in all fields and by consulting with stakeholders-including unions and communities-it was possible to get some quite good outcomes. An example of where it goes wrong, as Sarah said, was Southall Black Sisters, where there were some quite harsh judgments in the appeal. Ealing Council were told in no uncertain terms that they had failed to act in accordance with the duty and failed to recognise that there were very real problems. As a punitive thing it works, but that was never what we wanted. We always wanted to be able to work in partnership.

Ro Marsh: The FDA represents senior managers in the Civil Service, the top of the NHS and here in the House of Commons. I know that that is slightly out of your remit because you are looking at business but the Civil Service has been able to demonstrate good practice because of the public sector equality duty. I am absolutely sure they would not be where they are now-which is not perfect as it is-if it were not for the public sector equality duty.

An example of that is the review going on in the House of Commons right now, looking at the gender equality at the top of the House of Commons staffing levels, because it has been recognised that you have not achieved that within your own house, literally. I think being able to demonstrate good practice as a consequence of the public sector equality duty is something that is really positive for business.

One of the things that struck me, in thinking about what I was going to say today, was that the first female Permanent Secretary was appointed in 1955. Yet here we are, 57 years later, and still only 20% of Permanent Secretaries are women. We are not yet even there with the public sector equality duty. I am, as I know my colleagues are, really concerned about suggestions of weakening that duty. There is a review coming. It is already weaker than we would like it to be; we would like it to be stronger. We would like the Civil Service, the Houses of Parliament and the public sector generally to be held to account more than they already are, and the suggestion of a further review is extremely concerning. The duty does not go far enough; we would like it to go further and not to be weakened.

Q137 Chair: That is very interesting. Following on from that, do you think it could be used more effectively to address inequality in the private sector, possibly through public procurement, by inserting provisions in contracts that would require inequality to be addressed in equal pay audits?

Sarah Veale: We would certainly agree with that and it is something that the TUC has called for. One of the most important things you can do with public procurement is use it to ensure that working conditions are at their optimum, rather than just basing it on issues of cheapness and what the most attractive contract might be in that sense. If you have a procurement policy that also stipulates the way, perhaps, that recruitment companies that gain the contracts should be operating, it would want to look at things like recruitment practices, training for apprentices, and the stayingon and promotion rates for women. There are a whole range of different indicators which would usefully be looked at. We would certainly see procurement as being a very important lever for pushing some of the achievements in the public sector, which have yet to be realised in the private sector.

It is worth saying that there have been some significant improvements in the public sector over the years, some of which are directly attributable to the duty. However, others are attributable to the work of trade unions in concentrating the minds of public sector authorities on the importance of issues like gender equality. In terms of improving productivity and so on, I think the private sector could learn quite a bit, for example, from the much narrower gender pay gap in the public sector. That is not there by accident. It is there because of positive policies that have been specifically been put down to address the problem, because the public sector can see there is an advantage in having women’s talents properly used and not allowing unequal pay to be the sort of blight that it still is in the private sector. So the short answer to your question is yes, absolutely.

Sharon Greene: There are other issues that could also be taken into account. Sarah mentioned recruitment practices, but, for example, you could include a requirement that a company demonstrated a commitment to flexible working, which is a big thing on the Government’s agenda now. There could be greater opportunities, for example, for young black men to be employed or at least offered the opportunity for employment. We know the employment level for those young men is around 50%. That is something that could be addressed without too much difficulty. However, flexible working and decent parttime working opportunities could also be included and, provided all companies were on a level playing field, that could make a very positive contribution to a fairer society.

Q138 Chair: May I again play devil’s advocate? It is fair to say there is a school of thought in a section of the private sector that partly as a result of this sort of legislation the public sector is overpaid, bloated, expensive and could not survive in the private sector. Have you any comments on that?

Ro Marsh: That is certainly something that is not true for FDA members. I was going to talk about this in the bit about particular occupations because in the professions-things like lawyers, scientists, statisticians and economists, who make up a lot of the FDA and Prospect-women tend to come into those jobs not for the pay but for the nonpay matters, because you can get a lot more in private practice as a lawyer and a lot more from the Bank of England for economists and statisticians and so on. They come because there is flexible working, because there is decent provision for maternity and a culture, at that level at least, in the Civil Service of being supportive of women’s recruitment and retention.

That is why all the trade unions are very concerned about the review of terms and conditions that is happening in the civil service. It is not being done in a positive way to say, "There is good practice in the Civil Service; how can we demonstrate how well we are doing in the Civil Service and show businesses how to recruit and retain women, in particular?" The review is seen very much as a way of cutting people’s terms and conditions. The bits that are under attack are those very "soft pay" costs, which actually are what attracts women to the Civil Service, despite being potentially able to earn a lot more in the private sector. There is a perception about the Civil Service being bloated and overpaid. It is absolutely not true for that level of the Civil Service and I dispute it being true for the rest of the Civil Service.

Sarah Veale: You do not want to encourage a race to the bottom, either. The private sector has this attitude that because terms are comparatively good in the public sector, this is somehow iniquitous and should be stopped. There is the attitude that the public sector should come down to their level. There is now povertyrate pay in some sections of the private sector and this has a huge impact on women working part time.

The private sector should be aiming to get things to the better level we see in the public sector, rather than the other way around. If businesses argue that they cannot afford it, they should have a look at what some of their own organisations are saying about the benefits of equality, doing more to promote women and putting women into more senior positions.

Ro Marsh: There are still women in particular in the Civil Service who are on the minimum wage. This used to be a big issue. Half of the time I am a national officer, so I actually do negotiate in various Government Departments on pay. Every year in some Departments there was a real issue about, "Crumbs, we need to put these people’s pay up to the minimum wage because the minimum wage has gone up and we have not had a chance to do that." That is slightly recognised by the way the Government have implemented the pay freeze. In the Civil Service, the pay freeze affects lowerpaid people less than it does the more highly paid people, which is causing issues for us, of course, but that is a recognition of the fact that a lot of the Civil Service is only just on the breadline.

Q139 Katy Clark: This is perhaps more directed to Sarah, but is for anyone on the panel. In the last session we heard quite a lot about the costs of equal pay cases and the point was made that perhaps we should look at it the other way, as the costs that would be saved if it was not necessary to bring equal pay cases. Have you looked at the impact that the failure to pay equally has on the state, particularly through welfare and benefits budgets, etc? Is the failure to implement equality policies something that you have done any work on?

Sarah Veale: We have done quite a lot of work on that, which we can send in to the Committee. It is almost intuitively right that it will cost the welfare state more if you pay women poverty levels, because they simply cannot afford to exist on those levels. There is then a political argument about how much the state should be subsidising employers who refuse to pay a decent wage to people. That is obviously a matter of political opinion, but certainly it would be difficult not to see that paying women very low wages and still having a big gender pay gap will hit the public purse at some point. It is then a question of political opinion as to what you do about it and the exact level of intervention. We certainly have done some work that shows that link and we can send that on to the Committee.

Sharon Greene: We have done some research, which was carried out by the Working Lives Research Institute. It is a hugely long document, which is why I did not send it in to you, though I am very happy to do so. It was an interview with about 6,500 UNISON members. It talked about how austerity measures, including equal pay, had impacted on their lives and the things that they were having to cut back on, which included such basics as food for the family. The growth of food banks in this country is another indication of how low pay is impacting very hard on working people’s lives.

Q140 Mike Crockart: I want to turn specifically to the subject of equality impact assessments. I address the first question to Sharon; you made some comments on them in the evidence that you submitted. Specifically, why do you think that equality impact assessments, which publish changes to policies and procedures, including staffing, should be reinstated on a statutory rather than a nonstatutory basis? There is a view that, especially for smaller companies, this is red tape that gets in the way of doing business. Especially at times when the main priority is to establish economic growth, anything that gets in the way of that should be reevaluated to make sure it is providing some sort of benefit.

Sharon Greene: The failure to carry out equality impact assessments leads to bad judgments and bad decisions. If you make a bad decision it costs more to put it right than to make the right decision in the first place. If you involve stakeholders, unions and the community you will have the chance to make the correct decision in the first place. Yes, it is a level of bureaucracy, but it does not have to be. It can be a very simple process. You can do a very quick assessment of whether or not there will be adverse impacts on particular groups in the community. Once you have done two or three of them, it is actually very easy. We do them in our own union for various bits of work that we do. There is a wealth of information and guidance out there. The EHRC produced some really good guidance. It does not have to be a very expensive and timeconsuming process, but it does lead to better decision making and communities’ and service users’ buyin.

Sarah Veale: The other thing is that small businesses, quite rightly, complain about excessive litigation. However, if you do impact assessments and get your recruitment right and your practices and procedures are proper, for a start you will avoid a lot of cases being put in against you; secondly, if they are, you have much more robust evidence to show that you are doing your best. Tribunals will tend to take a more lenient approach if it is some unintended consequence of a policy than they would if you had done absolutely nothing and not made any effort whatsoever.

Exactly as Sharon says, once you have got into the hang of them they are quick and quite easy to do. You reap huge benefits from it. A lot of businesses that have done them, including small ones, have said, "Actually, having done one now we would not stop." It is quite important, because people do instantly and immediately think these things are red tape, but as soon as you unthread the red tape, as it were, and work your way through what it is they are intended to achieve, you can actually suddenly experience the benefits first hand.

Q141 Mike Crockart: Do you think it is a fear of what is involved in doing such an assessment that stops people from wanting to do them?

Sarah Veale: Yes, there is a lot of that. Funnily enough, having just said that it avoids litigation, there is a wrongful fear that it will actually produce litigation because it will expose things that will then stimulate claims. However, I do not think that is the case. If you identify where there are problems and work with your staff to address those, the propensity for them to sue you would actually be very much reduced. That is an understandable fear, but probably a false one.

It is regrettable that the Prime Minister recently announced that the Government would not be doing equality impact assessments any longer because-whether the Government ignores them or not-they do show that, for example, the employment tribunal fees that are to be introduced definitely will have a particular impact on women, because of the fact that women tend to be low-paid and will be much more likely to be put off litigation simply because they cannot afford the risk that they might not get those fees back. You do need to know these things and it is a shame if, for the sake of a red tape announcement, they have not thought through what the impact will be in terms of public policy.

Q142 Mike Crockart: Equally, is there not an argument for targeting equality impact assessments on specific areas? I have sat on any number of Statutory Instrument Committees where there is a page at the back that has a box to tick to say, "The equality impact assessment has been done", but looking at the legislation, you knew from the start that there was no potential for any kind of impact in equality terms because of the type of legislation that it was. It feels like a tickbox exercise just for the sake of a tickbox exercise to show that we are thinking about equality issues.

Sarah Veale: They are not tickbox exercises. I do not think they are, actually. I think they are reassurance for people. Actually, with a different hat on, I sit on the Government’s Regulatory Policy Committee and, really, the impact assessments and the equality impact assessments are doublechecked and if it looks as though it is just boxticking and it is selfevident that there will be a race impact they are sent back and the Department is asked to have another look.

I can see what you are afraid of, but in fact they are pretty rigorous and, even though you just get the box ticked, someone has gone off and had a look and talked to the stakeholders and worked out that this is fine. As you say, often selfevidently it is not, but that kind of reassurance is worth it, rather than saying, "We will just pick on the sectors where we think there is a problem." You will miss some sectors that do not obviously have a problem, but a problem will emerge when you look more closely at it.

Ro Marsh: To do that would devalue them, in fact. I do think they are seen by some people as tickbox exercises and unnecessary bureaucracy and so on, but actually many of the Government Departments and agencies that have conducted them recognise their value and see that they are positive.

Until two years ago, there used to be an annual award for "transformative equality impact assessments". The FDA sponsored it for a couple of years, because it was the Civil Service saying, "We recognise that these must not be tickbox exercises and that they can be transformative and make a difference to organisations." Small agencies were coming along and demonstrating good practice. The way to demonstrate that is by doing the impact assessment and saying, "We looked at how we were going to restructure the office and we wanted to make sure that we remained an attractive employer for women or for under-represented or disadvantaged groups or for the general public and we did that through the equality impact assessment."

Last week, there was an example given to me where the Ministry of Defence apparently decided to close off several of its lifts, not for austerity, but for green reasons. They did not do an equality impact assessment and, when they were asked to do so by the unions, realised that disabled members of staff were being severely disadvantaged. Of course, they had to turn the lifts back on again. It was a very simple issue. If they had just done what could be seen as a tickbox exercise: "Have you thought about the effect on disabled people?" they would have realised, "Oops, no." Ticking boxes can actually make you think. But I agree with you: it is absolutely essential that it must not just be bureaucracy. If you just do it on specified things it will be seen as being punitive, whereas what we would want-and what I certainly would want in the Civil Service-is for them to be seen as something positive and good, where the employer can demonstrate good practice.

Q143 Mike Crockart: I was not suggesting that they should be done in specific areas as a punitive measure. It is much more the model of health and safety, where it is a riskbased approach; you are targeting areas where you think there is an obvious and very real need for it to be done.

Ro Marsh: I am suggesting that it will be seen as punitive if it is not done routinely and automatically. In local government-I know because my daughter works in local government-it is seen as something routine. They know they have to do it. It is a bit like you were saying: it is at the back of all the Committee reports. It is absolutely appropriate that it is routinely done. But not just because statute says, as I keep saying, but also about ensuring that you are a decent employer and a decent provider of service to the public.

Q144 Rebecca Harris: What do you think the impact of budget cuts on the EHRC will be?

Sarah Veale: They have had a very significant budget cut. They have also been put on zero budget measures for next year, which is pretty drastic. There have been criticisms of the EHRC, some quite loudly proclaimed. There is nothing wrong with a bit of forensic accounting and making sure that they are providing good value for money. The fear, though, is that the cut is so huge that the whole organisation has been knocked sideways. What is equally worrying is the change in the rules under which the EHRC operates, which are being made in the Enterprise and Regulatory Reform Bill. In particular, there is a worry that taking away their general duty might have exactly the opposite effect to what I suspect this Government is hoping for.

What that good relations, general duty has been able to do is allow the EHRC to pick on areas, rather like you were talking about, where there is clearly a big problem and do a proper investigation, take evidence and produce a report with recommendations for change. If you take away all that, they will not be left with an awful lot other than performing their statutory duties, which is, of course, something that they absolutely have to do. However, it means also, I suspect, that businesses will start to see them just as an organisation that jumps in and intervenes legally when necessary but is not really there to provide all the support.

A lot of the work the EHRC did, and was spending a lot of its money on, was actually not very well promoted. They were actually providing a huge amount of advice and support for small businesses and others who were nervous about discrimination law and needed somebody at the end of a phone line to talk them through what the problem was, help them get things right and avoid a tribunal case. The fear is that it has been such a huge cut that they will not be able to do very much other than their core functions, which might be what the Government intended but I think is a missed opportunity.

Inevitably, when you have a cut of that size you lose huge numbers of staff. You do not necessarily lose the staff that you might feel are better off moving on; you lose highly skilled, expert people who were doing a great job. It is much too much too quickly. A lot of it, frankly, was politically vindictive rather than a cut that really was evidencebased and in line with cuts elsewhere. Obviously, you would expect the TUC not to approve of these sorts of cuts anyway, but even setting that aside, this one is draconian compared to the cuts in some of the other regulatory bodies.

I think it will take the EHRC a bit of time to get back on its feet. It will get back on its feet; we have a huge amount of confidence in the institution. It has a great new chair; it will have a new board; and it will go forward. However, I think it is regrettable that it had to be hacked so badly in order to get it transformed. I worry a bit about the level of outside interference that has been going on. I would hope, very much, that that will now withdraw and the EHRC will be allowed to find its feet and be given some better resources to enable it to do more than simply legal interventions and the core functions that it has.

Sharon Greene: I absolutely support everything Sarah says. It is also important to say that when Sarah said there is a degree of outside intervention, the human rights element of the EHRC has been attacked, generally, by the media. There is scapegoating of certain groups, whether it is migrant workers or Travellers or suspected terrorists; their rights are trumpeted as being above the rights of the ordinary people. That is a media construct and that has led to a lot of people opposing the EHRC without actually understanding the very valuable work it does do. Included in the valuable work is the grants that it gave to hundreds of small organisations working in the community and supporting people in need. It is a great sadness; some of those organisations will inevitably be forced to close as they will also lose funding from local authorities. I think we will feel that. Possibly, we will feel it in the courts, too, because people will not have somewhere to go for help and advice that might have stopped them needing to take a court case.

Ro Marsh: That is really significant. I do not have a lot to add. We have FDA members who are directly affected by the cuts to the EHRC. I wanted to say that one of the concerns I have is the loss of the legacy of the EHRC, i.e. where it came from. Cutting it so far that you are losing some of that real history, knowledge and background of where it came from is tragic as well. The fact that there is no statutory code behind the public sector equality duty any more, which was administered by the EHRC, is itself unfortunate.

Q145 Ann McKechin: Just to follow on from that question about the Equality and Human Rights Commission, my understanding is that the helpline service, which the EHRC had in relation to employment matters, has been passed to ACAS. It would be helpful if you could let me know whether you think ACAS have the capacity to deal with these types of cases or whether the public are aware that if they have a discrimination in work case ACAS are now the body that actually provide general advice. That message does not seem to have got through.

Ro Marsh: No, they have only recently launched a telephone helpline, which is actually being run by the private sector, is it not?

Sarah Veale: The private sector is doing their helpline now, which is a worry as well because it detaches it from the Commission. What happened before was that the Commission was able to use some of the queries that came in not to poke at particular individuals but to use the examples to work out where there were systemic problems. It was extremely important that you had that link. The public had confidence in a helpline that was run by a professional body, whereas I suspect the public would have less confidence in a contracted out company running it, particularly given the reputation of some of the ones that have failed spectacularly more recently, quite frankly.

ACAS does a fantastic job, but it also has had a funding cut and there is a worry about whether ACAS will be able to continue to provide that level of service. Brilliant though ACAS are, their particular specialism is not discrimination. I think it would be understandable if people did not ring them up as the first port of call, though I would hope people would, because it is there as a public service and they have a very good active helpline where you can actually speak to a human being at the other end of the line, which might be more costly but I think pays dividends in terms of business confidence. ACAS is popular with small businesses.

Q146 Ann McKechin: Sarah, in your written evidence you stated your concerns about proposed changes to employment law and the fact that people will have to pay a fee if they want to take a tribunal case and also the fact that they can no longer demand a questionnaire of their employer. Are there any particular sectors of work where you think this will really impact the types of cases that may now no longer be heard?

Sarah Veale: On the questionnaires, I think that will be a massive problem. Again, I do not think it will help employers in the long run. It is being done because employers have complained that there is too much formfilling and all the rest of it. I think it looked like lowhanging fruit, but actually employers will find that they still have to provide all that information in a much more circuitous and expensive way. The questionnaires were hugely important for unions representing people, for solicitors and for individuals to be able to work out, through the information they received from the employer, whether or not they had a case. If you want to avoid misplaced litigation, the one thing you do not do is get rid of the one document that allowed you to get the information you needed from the employer. I know there is a lot of talk about vexatious litigation; trade unions are very important organisations that prevent a lot of what might be called vexatious litigation.

The one thing we have found the questionnaires to be incredibly useful for is a sifting process, because we do not support every single member who comes up and says, "I want to go to the tribunal." It is quite the opposite. We sit them down and say, "What is the problem?" If it looks like a discrimination issue, you use the questionnaire to talk to the employer, possibly physically if you can do that, but otherwise to get the information from them. That will sometimes result in the representative turning around to the member and saying, "Well, actually it is not discrimination. You would be better off maybe getting ACAS conciliation or we can take you back in to talk to the employer."

It is a terrible misjudgement to do this. It will not make a difference in terms of red tape; they are not difficult to fill in. I think it will misfire pretty badly. One thing I would really urge the Government to reconsider is that decision to get rid of the questionnaires.

Q147 Ann McKechin: It is a form of predisclosure, so that you can judge the strength of the case.

Sarah Veale: Exactly, yes. It is exactly that.

Ro Marsh: We would totally support that. We did not put it in our evidence to this Committee, but we did put it in in response to the consultation on the repeal of the Act, because it is something we feel very strongly about. There are equal pay questionnaires as well; we have a load of those out at the moment, actually, in several Government Departments for various reasons, which we might come back to. However, it is really about what Sarah was saying. As a national officer, not just an equality officer, I deal a lot with cases where we persuade people they do not have a legal case. We spend quite a lot of our time telling our members they do not have a legal case. Not being able to demonstrate that any more means there will be much more recourse to employment tribunals for cases that should actually never get there, because when that disclosure comes it will be evident that there is no case. Being able to have that disclosure before has been really helpful; I think it is terrible.

Sharon Greene: There is another side to that coin, which is that, particularly in the community and voluntary sector, where you may have very small employing boards or bodies, by using the questionnaire we can actually extract from them information that can help them change their policies and procedures. We do not have to go to court; we do not have to take a case. They change what they are doing as soon as they realise that, actually, they are acting in a discriminatory way. They may not have been aware; they may just have been trying to meet budgets or whatever. However, we found it really helpful. We did not put that in our submission, because it came in too late, but we do have some information on that if you want it.

Q148 Mr Walker: There is a recently published report on apprenticeships. We have had evidence from the TUC on that. Last week we heard from Diane Johnson of the ECA, who spoke about the fact that two out of 300 apprentices to be electricians were women. The TUC presented written evidence suggesting ways to improve this, including a procurement policy to require suppliers to recruit a balanced intake of apprentices as a contractual requirement. I just wonder if you could expand on that, in particular with industries such as the electricians and the construction industry, where, again, it is 1% to 2% and not much higher. How would that work practically to raise that level?

Sarah Veale: I can see exactly what you mean. If you do that now, when there are so few women working on a construction site, it will not work. In a sense you would have to put the horse before the cart. The problem with some industries is that they are absolutely womennogo areas, still. You can spend hours trying to work out why women do not find working on a construction site particularly attractive, one of which might be the behaviour of the male construction workers, quite honestly.

There are issues at management level about how you manage things like construction sites, but much more important, I think, is what happens to girls and young women at school and university stage. Teachers can and do their best to encourage girls to go into those maledominated areas and you can get them interested up to a certain point, but it appears that when they reach a particular age-I am the mother of two daughters myself-something comes in called peergroup pressure. However good they might have been at science or something technological, or however much they might have liked the idea of being a train driver or something like that, they start to become more conscious of what other girls and young women think. They stop and feel, "I would get laughed at if I did that."

Having gone through that particular mill, they then look at the profession or job and they see it is entirely maledominated. You must be quite a courageous young woman to go off into a career, profession or job where you were surrounded by men and the assumption was it was a man’s job. The trouble is, of course, that this is a massive chickenandegg situation, because, while you have got men in particular industries, that has traditionally meant that the pay rates have been much better and the areas that women end up going to-called the five Cs: catering, cleaning, caring, clerical and cashiering-are largely done by women and the pay levels are much lower.

This whole area of occupational segregation in apprenticeships and work is absolutely massive. It feeds the gender pay gap problem and is selfperpetuating. How do you go about changing all of that? I wish I could provide a neat answer that would solve the whole problem; I am sure everyone does. However, we must do far more in the careers service to try and give support to girls and young women when they get out there. I have some sympathy with businesses when they say, "We do our best. We would actually like to see more girls apply, but look at that: we put out an advert that says we particularly welcome applications"-because they are allowed to do that, to correct an imbalance in their workplace-"but we still do not get girls or women applying; or we get them applying and they are simply not trained or educated in the right areas for us to be able to take them on without disproportionate expense. What can we do?" There are massive problems, still, that have to be tackled on that front.

The procurement thing is supposed to give businesses a nudge to look at what they are doing and think, "Actually, if we make a real effort, pull in 10 girls from the local school and really concentrate on and protect them, and get them to where they should be, we would then steal a march on other companies that had not done that in terms of procurement." That is the kind of way that was supposed to work. I appreciate I am making it all sound terribly easy; it is very difficult out there.

Q149 Mike Crockart: You have answered my question, which was more generally, across the panel, what your views are on how to increase the number of women taking up apprenticeships. You have outlined the difficulties. On the last point you made about businesses going into schools and promoting their industry to girls in particular but also to boys, let’s face it: there are not enough people thinking of apprenticeships. There are many people who go on to university who could well have done apprenticeships. There was an all-party parliamentary group on social mobility and highlevel apprenticeships in industry. It was people who were effectively getting a higherlevel degree through the apprenticeship route. That is the sort of thing that is not known particularly widely. Is it just about the industry going into schools more, speaking to parents more and overcoming their attitudes to apprenticeships?

Ro Marsh: It is about culture, isn’t it? Sarah has talked about it already. It may sound like it is something that is not very relevant to the FDA, but another example of good practice is that recently, in the last few months, the Civil Service went out to schools and brought in a load of 14yearold schoolchildren to the Civil Service. They took them down to London. These kids had never been to London before; it had never occurred to them that the Civil Service was something they could consider. As a consequence of that, hopefully a lot of those kids will go back to their schools and talk about the Civil Service as being somewhere they can aim for. Being 14, it is before they have made their choices about their GCSEs as well. It is about doing it both ways, so industry goes to the schools. I used to go around schools and talk about trade union membership back in the days when I worked for UNISON. That was about telling the school kids what their options are and changing that culture. I think it will take a long time. That a local builder comes to a school and talks to 14yearolds will not make a difference overnight, but it will have a trickle effect.

Q150 Chair: In the context of this response, the Committee has just completed its report on apprenticeships and one of the recommendations that was in the report was that schools should be evaluated on the number of people who go on to do vocational education as well as for ALevels and higher education as a way of changing the mindset of the teachers within the school. Do you think that there is a role in promoting equality through this provision?

Sarah Veale: There definitely is. There is a general problem in this country that vocational careers are not rated nearly as highly as going to your university and being an academic. In Germany, they are much better at appreciating, and making sure there is general cultural appreciation of, the worthiness of a skill and a manual trade. In this country, for all sorts of reasons, the goal of the schools is to get as many children into university as possible, regardless of whether it is actually the right choice for that child. This is terribly generalised. There are some schools who I do not doubt have done a huge amount on their vocational education and getting children into good jobs and good apprenticeships, but you need far, far more on that. You need to do more to stimulate schools to see that it would make school much more comprehensive in the real sense if it is taking as much notice of the children who get jobs at 16 and do really well as the ones who get into university, as well as lauding their achievements. They tend to have Oxbridge as Nirvana and then anything else down at the bottom is just alsorans. It is such a shame.

Chair: We will see how the Government respond to our recommendation.

Sarah Veale: Good luck.

Q151 Chair: I will finish off with a couple of questions. We are running out of time, so could you be brief? Do you think the positive action provisions of sections 158 and 159 of the Equality Act could be used more effectively?

Sarah Veale: The answer to that is always yes. The fact that you are asking whether they could be used more effectively means they are not being used terribly effectively at the moment. There are sections of the Equality Act that, I am afraid, have either been repealed recently or have not been put on to the statute. One I would particularly mention is section 78 on equal pay, where the Government say that they are not going to implement that section on gender pay reporting because they think the voluntary way is the best way forward. The gender pay gap, however, is absolutely stuck. It hardly moves every year. It is highly regrettable that bits of the Act that could make a difference, positive action being one of them, have been neglected, not commenced or tossed aside as something that is nice in a good time but not to be had in an economic downturn. I think that is wrong. The only way you are going to move things forward on gender equality at work-and elsewhere, actually-is positive action.

I do not use the word positive discrimination. I do not think we would agree with that in the TUC, but taking measures to promote a class of people who are clearly disadvantaged, even if only temporarily, is absolutely essential to make some difference to shift the blockage and get a critical mass of women moving forward. It is within European law; it is perfectly legal to do this.

Ro Marsh: As I mentioned earlier, there are various reviews in the Civil Service and the House of Commons that recognise that there is an issue about representation of women at senior levels. Without some form of positive action, those will not be addressed. Actually, I do think there are opportunities and that these should be taken for it to be used more effectively, even if it is just promoting this and changing the culture that appears to exist, which appears to show that the most senior people have to be men.

Sharon Greene: You can look at own my union as an example of how positive action works very effectively. I do not think you can imagine much more of a maledominated world than the trade union movement 30 years ago, but we have taken some very positive steps to encourage the participation of women, disabled and LGBT people. We now have a general secretariat which is half women and half man. Most of our senior managers are now women and the difference in our trade union is shown through the issues that we negotiate on and the issues that we care about. That involved an element of quotas, if you like. We call it fair representation. We also took positive action measures, including targeted training and recruitment. So it can be done.

Chair: Thank you for your contribution. I repeat what I said to the other panels: if you feel that in retrospect there is anything further that you would like to add to answers you have given us, do feel free to send them as supplementary evidence and they will be given due consideration. Of course, if we feel there is a question we should have asked but did not, then we may write to you and would be grateful for your response. Thank you very much.

Prepared 19th June 2013