The hon. Gentleman says that the Opposition have been calling for this throughout this Parliament, but unfortunately that was not the case when they were in government. I refer him to the Hansard report of proceedings on the Equality Bill on 24 June 2009, when the then Labour Minister said that
“having mandatory arrangements in force by 2011 would run the risk of riding roughshod over the legitimate voice of both sides of the business community. Progress can better be made by bringing employers with us—by including, encouraging and cajoling, rather than compelling.”
My right hon. Friend the Member for Hornsey and Wood Green (Lynne Featherstone) responded:
“We cannot wait another four years…It is clear that we must take action now”.––[Official Report, Equality Bill Public Bill Committee, 23 June 2009; c. 410-432.]
We have got agreement in the Government to take that forward, but I have to say that the context of the commitments made from this Dispatch Box by the previous Labour Government during the passage of the Equality Act—they committed to a voluntary approach before implementing the legislation—certainly did not make that easier. None the less, I am delighted that we are now where we are.
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We have of course been taking action over the past few years. Our Think, Act, Report initiative has created a powerful community of companies that are leading the way on gender equality. More than 275 companies covering more than 2.5 million employees are now taking action and sharing best practice on how they
recruit, promote and retain female talent in their organisations. However, too few have voluntarily published their pay gap. I would like to take this opportunity to praise those companies that have taken that courageous step. Companies such as Friends Life, Genesis Housing Association, PricewaterhouseCoopers, Tesco, AstraZeneca and Sodexo have made the commitment that they would do so by 2016.
However, I have spoken with representatives of some of those companies about how they managed to achieve that change within their organisations, and they have told me of the battles they had to have in order to get that past their lawyers because of concern about the risk to the company. Indeed, at one event at which we were discussing the pay gap a business woman told me that companies would not publish those data because they would be self-critical. To be fair to employers, the gender pay gap is a thorny problem that has a range of different causes, not least occupational segregation, with women going into lower-paid sectors and jobs, and subject choices made at school. Therefore, tackling the gender pay gap is not straightforward. That is why we said that we would keep section 78 under review, which is what we have done.
The amendment recognises that unless it is a legal requirement, organisations are much less likely to be prepared to publish those data because, for the reasons I have outlined, it is not the kind of picture that we all want to see in society. However, the transparency is crucial to making sure that we can tackle it. These regulations will require private and voluntary sector employers in Great Britain with at least 250 employees to publish information about the differences in pay between their male and female staff. By activating section 78, we will shine a light on the gender pay gap.
The gender pay gap is not primarily about men and women being paid differently for the same job, although that forms part of it. That is already unlawful and has been prohibited by equal pay legislation for many years. The larger elements of the gender pay gap concern occupational segregation and career penalties for taking time out of the labour market, often because of caring responsibilities. Those things combine to create a situation in which women are paid less. We want more businesses to take a proactive approach to tackling these problems and promoting equality in workplaces across the country. Employers might want to review their arrangements for flexible and part-time working patterns, provide support for maternity returners, actively encourage men to use shared parental leave and tackle unconscious bias during recruitment.
Roger Cotton of Friends Life, which won last year’s Opportunity Now award for transparency, has clearly set out the case for gender pay gap reporting. He said: “What gets measured gets managed…what gets published gets managed even better.” I am delighted that the Women’s Business Council, an independent body established by Government, has today published a short guide for businesses on the gender pay gap, entitled, “Mending the talent gap”. It explains to employers what the gender pay gap is, why it matters and the actions they can take to help close it. I would like to offer a special thanks to the council’s members, and particularly its dynamic chair, Ruby McGregor-Smith, the CEO of Mitie Group, for their continuing dedication and
commitment to using their immense influence within the business world to advance women’s position in the workplace.
The amendment before us requires that consultation must take place before implementation. By consulting with business, we will find the best and most effective way of implementing section 78 while meeting the objective of achieving genuine transparency on pay and tackling the gender pay gap now. I look forward to the House’s support for the amendment.