Equal Pay and Flexible Working Bill [HL]

My Lords, I declare an interest as the deputy chair of the Equality and Human Rights Commission, a body which is closely involved with the Government Equalities Office in discussions on the forthcoming equality Bill. I thank the noble Baroness, Lady Morris of Bolton, for introducing this Second Reading debate. It is a good opportunity for those of us in the Chamber to raise issues about which we are concerned. Sometimes, those of us who are involved in this day-to-day begin to wonder if anybody else is particularly interested. It is a fine opportunity, which I particularly welcome. The proposed Bill is like a curate’s egg; it is good in parts, but some parts may be either unnecessary or lead to what we might describe as unintended consequences. The first of those is the reasonableness test. I dread to think how many hours have been spent over many years by many lawyers discussing the meaning of ““reasonable””. Many fine houses have probably been built and bought on the income from such discussions. If we introduce another test into this part of the legislation, it will not make life easier and may well make life more difficult. We would not, I think, want to widen the circumstances under which an employer would be able to find a material-factor defence. In any case, this all has to comply with European legislation. All in all, we may find ourselves in more difficulty, rather than a better place, by agreeing to that part of Bill. On flexible working, it is interesting that the British Chambers of Commerce is anxious about this proposal. It conducted a survey in 2007, in which 89 per cent of those companies surveyed said that they provide some kind of flexibility. I spent yesterday evening in the lovely area of Tunbridge Wells, addressing a range of employers about the likely impact on women’s employment of the current recession. It was interesting that these employers, mostly small and medium-sized enterprises, were very much in favour of flexibility. We have all discovered that flexibility suits many people. We could not possibly go back to the previous situation, before these various terms and opportunities for employment were available. The Government’s proposals for 16 year-olds are probably sensible and appropriate. I left school aged 15. At 15 I was taking the bus and Underground from Surrey into central London to work and home again in the evening. For parents to be able to organise their work around their young people, up to the age of 16, is a move far enough. On flexibility, I would also say that all who have the opportunity should encourage employers and trade union negotiators to try to ensure that flexibility is available to everybody. In many companies that already happens, and in many companies flexibility that is available only to parents is resented by some. The Equal Opportunities Commission, before it closed in October 2007, received its largest percentage of requests for information on the right to flexibility from men who did not want to commute on the most crowded trains. Many people would like to work in different ways for different reasons. We should all try to bear that in mind. I turn now to the question of pay audits, which is probably the nub of this Bill. I am not against the proposals, and I do not think that the Equality and Human Rights Commission would be against them. We would only say that they are unlikely to make much difference. There are very few equal pay cases which succeed at tribunal. Many are settled before reaching court; many more are lost. I will come to that in a moment, when talking about the Equal Pay Act itself. The much bigger problem that we need to look at is not whether an extension of the legislation or a new piece of legislation will help. We need to look at the real reasons for the gender pay gap and what role is currently played by the Equal Pay Act. On the gender pay gap, the Women and Work Commission report has already been mentioned by my noble friend Lady Gould. I chaired that commission between 2004 and 2006. We discovered that there were three major reasons for the gender, pay and opportunities gap. First, there are the educational choices made by girls and a lack of quality guidance for girls on what those educational choices will lead them to in the world of work. Secondly, there is occupational segregation, both in workplaces and across the labour market. Thirdly, there is the poor quality of part-time employment. There is an enormous lack of good-quality part-time employment available. One of the pay gap statistics which is most telling is the gap between women who work part-time and women who work full-time, which is currently around 33 per cent. That tells you something about the nature of available part-time employment. We need social policy programmes to improve these things and we need flexibility, as has already been mentioned. I am grateful to the Government for agreeing to extend the right to request. I am pleased that in recent years our Government have extended and improved rights to maternity and paternity leave and I appreciate the efforts to make childcare more available. The cost of childcare is still a major problem and one of the big reasons why many women turn to part-time, local employment. The nature of their skills does not allow them to earn sufficient money to be able to work full time and pay childcare costs. We also need what I call second-chance education. Much more effort needs to be put into programmes to upskill and retrain those women who have gone from doing what we might term decent-quality jobs to working in jobs much below their capabilities. My noble friend Lady Gould mentioned the loss of earning power of the women who go from decent jobs to lower-skilled and lower-paid jobs. The Women and Work Commission has estimated the cost of that to the Exchequer to be between £15 billion and £23 billion a year. We made those arguments when the Women and Work Commission produced its report. In the following Budget, in March 2006, the then Chancellor of the Exchequer, Gordon Brown, allocated £40 million to be spent on specific retraining and upskilling programmes for women. That money has been used effectively and those programmes are being continued. The Equal Pay Act, to use the vernacular, is a busted flush; it does not work. Anyone involved in negotiations or working within the legal area will say that we need to start again. It is almost 40 years since the Act was introduced and during that time we have had a complete change of pattern within the labour market: local authorities have contracted-out services, most of which are sex segregated; the Act does not allow women to compare themselves with men in a different employment; central government departments have been divided into agencies; and people employed in those separate agencies are not deemed by the courts to have a single source of employer. The way in which labour is organised these days means that the legislation just does not match what is required. We need a root-and-branch change to current legislation. I and the Equality and Human Rights Commission welcome the opportunity brought about by the equality Bill. We welcome many of the proposals, particularly the banning of secrecy clauses and the introduction of positive action. I end by thanking the noble Baroness, Lady Morris, for introducing the Bill. It brings the issue onto the agenda in a very necessary, helpful and welcome way.