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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 300 - iv House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE TRADE AND INDUSTRY COMMITTEE
OCCUPATIONAL SEGREGATION AND THE GENDER PAY GAP
TUESDAY 8 March 2005 RT HON JACQUI SMITH MP, MS TRACY VEGRO and MS CATHLEEN PRATT Evidence heard in Public Questions 178 - 204
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Trade & Industry Committee on Tuesday 8 March 2005 Members present Mr Roger Berry Richard Burden Judy Mallaber Linda Perham Sir Robert Smith
In the absence of the Chairman, Mr Roger Berry was called to the Chair ________________ Memorandum submitted by Department of Trade and Industry
Examination of Witnesses
Witnesses: Rt Hon Jacqui Smith, a Member of the House, Minister of State, Deputy Minister for Women and Equality, Ms Tracy Vegro, Director, Women and Equality Unit and Ms Cathleen Pratt, Assistant Director, Women and Equality Unit, Department of Trade and Industry, examined. Q178 Mr Berry: Minister, good afternoon and welcome. Would you like to introduce your colleagues, for the record, please? Jacqui Smith: Yes, thank you Chairman. On my left I have Cathleen Pratt, who is Assistant Director of the Women and Equality Unit and on my right I have Tracy Vegro, who is Director of the Women and Equality Unit. Q179 Mr Berry: Thank you. Apologies for the fact that Martin O'Neill, our Chair, is not with us this afternoon; he has an urgent engagement elsewhere. Could I kick off? In the detailed submission to the Committee you cite research showing that there is a considerable pay gap obviously between women working full time and women working part time, and that a large part of that can be explained by occupational segregation, essentially. What I am not clear about is whether the Government made any estimate of the effect of occupational segregation on the gender pay gap for full-time workers. There is no reference to that in your submission, and that seems quite an important matter. Jacqui Smith: Firstly, Chair, could I say how pleased I am that the Committee is focusing on the issue of occupational segregation with respect to the pay gap? You are right that the DTI-commissioned research into the part-time pay penalty in particular identified that approximately half of that pay penalty could broadly be related to the sort of skills and levels of education that women had, and the other half was largely related to occupational segregation and particularly the fact that part-time pay - particularly when it comes from women going back to work - often results from them going back to work not only in a different occupation but with a different employer as well. So clearly occupational segregation was making up perhaps about half of that pay gap. What we have done in terms of the full-time pay gap, in all the research that has happened on the full-time pay gap, we have identified a variety of different factors, those being, probably to a lesser extent now, direct discrimination - what could clearly be seen as explicit within an employer. There are other issues as well even down to things like level of education, although over time women's education and qualifications, particularly amongst younger women, are at least equivalent to if not greater than men. It is down to issues like travel to work. Women tend to be - and this is largely because of caring responsibilities, which is another determinant of the pay gap - less willing to travel further to work and that impacts on the pay gap. Then the other important area is the whole area of occupational segregation. It was largely in order not only to be able to evaluate that but to bring forward proposals as to how we could address that that of course the Prime Minister set up the Women and Work Commission - and members of the Committee may well have had the opportunity today to see the interim recommendations of the Women and Work Commission - and we believe that when they come forward with their full recommendations in September we will have a clearer view of the contribution of occupational segregation not only in terms of the analysis of the data that they have done, but also some practical proposals for action that we would obviously want to take up. Q180 Mr Berry: I guess I am surprised, in my previous job as an academic, that not many academics appear to have bothered to look at this issue, in the sense that you ask the question what are the causes of the gender pay gap? And clearly it is part-time, full-time, occupational segregation, discrimination, et cetera, et cetera - the points that you raise, Minister - and I am surprised that in all the evidence that we have received there has not been any robust evidence suggesting that occupational segregation accounts for X per cent and part-time and full-time accounts for Y per cent and so on. Is it the case that this is a question that has not been asked very much by academics, let alone the DTI? Jacqui Smith: I think as we showed in our memorandum there have been a variety of areas where we have carried out research. No, we have not addressed this particular issue and it may well be that that is an area which deserves more research than it is getting, and that is also why, as I have said, I am glad that the Select Committee has decided to focus attention on it. Q181 Judy Mallaber: We heard from the EOC that girls and boys under the age of 14 or so are comparatively open-minded about the idea of taking employment in non-traditional sectors, but once they start work they choose traditional occupations. How good are career advisers at challenging stereotypes? Jacqui Smith: I can refer back to my previous occupation as a teacher in a high school here as well. I think firstly that the EOC is absolutely right, that the issue of occupational segregation and its impact on the gender pay gap starts early and it starts with the sort of choices which young men and young women make. What I would say about the quality of careers advice, and particularly the contribution of the Connexion Service, is that there is clear and explicit guidance to those giving careers guidance in education (and particularly those in the Connexion Service) that actually requires them to challenge stereotypes. It is an explicit part of the role, for example, of a Connexions personal adviser that they do that and that they challenge stereotypes and raise expectations and aspirations of young people. However, I think there are opportunities, not least in the end-to-end review of the Connexions Service, which was carried out in 2004, to look at the results of that review and to ensure that its recommendations are carried forward in the Youth Green Paper, and I know that the DfES are keen that they should do that. We have seen the emphasis that they have placed in the 14 - 19 Education and Skills White Paper on the significance of ensuring that that information and advice is as appropriate as it possibly could be for young people. The Government explicitly says in that White Paper that we need to make sure that options are "... determined by their aptitudes and the needs of employers, rather than stereotypes about their gender or background." On the subject of research we have commissioned research ourselves in the DTI, particularly looking at young people aged 14 to 19 and the types of information that are likely to be most important in determining their attitudes to the sorts of jobs that they would want to do and their preferences, and we will want to use that research, when we finish in September this year, to see whether or not there are any practical recommendations which come out of that that we could use for ensuring that: one, we know better where young people get their information from; and, two, that we therefore know better about how we can tackle stereotypes. Without doing a commercial can I point out to the Committee that we have of course started on this already in the DTI, with our publication Does Sex Make a Difference? The first lesson plan in there is a lesson plan about occupational segregation. We produced it two years ago for International Women's Day; it has been extremely well received by teachers; it has had to be reprinted on several occasions and is recommended, for example, by the NUT. Q182 Judy Mallaber: I think the question is how do we get some of these changes to take place in practice in schools, and in your evidence you talk positively about actively encouraging countering gender stereotyping in relation to work experience, which is at a critical age when pupils can get some idea about life in the workplace. Yet it has changed dramatically since I last talked to any young people. In most places I know of the pupils are asked to go and find their own work experience placement or given a list of places to phone up, and in practice they are not given guidance to counter those kind of stereotypes. We were given some examples this morning of where a much more proactive approach has been taken, but how widespread is that and are the good intentions in an area like that really getting out in practice into schools? Jacqui Smith: You are right about work experience which is for most young people, at about the age of 15, their first contact with work. Once again, the guidance is very clear on work experience, that part of the responsibility is to introduce young people to experiences of work and to break down stereotypes. I think you are right, from my time in teaching that would have been the sort of experience that I came across. I am not saying that it does not exist in any schools now but the tasking of the Learning and Skills Council and other business organisations locally, through what I think are called now Education Business Consortia, to work with employers to help to tackle some of those issues and to bring a more coherent approach to how we offer work experience is likely to be having an impact. Has it gone all the way that it needs to yet? No, I doubt that it has. There, of course, interestingly, it is not just a Government responsibility but I think an employer responsibility as well to see the offering of work experience to young people as being something important for them to help them ensure that they are getting the widest range of young people getting an experience of their workplace and then subsequently being able to come into the workplace and help them with all the issues about productivity and skill shortages which we know that occupational segregation will lead to. Q183 Judy Mallaber: But schools will still tend to concentrate more on academic results. Can the Government do more to get them to focus on what happens when pupils leave school and to make careers advice more central, and how far is this down to Connexions or to teachers? How do you see that advice being given? Jacqui Smith: Let us be clear, when I was teaching we had careers guidance that was pretty well solely dependent on the quality of the teachers within schools. I think Connexions has moved us on from there, and we are now explicit in the guidance given to those Connexions advisers, as I suggested, about the need to break down gender stereotypes. We have a more consistent and coherent approach to finding those work experience placements. I would slightly take issue with your assumption that schools are only concerned about academic achievements. Clearly there is an issue about how we improve the status of vocational education and that was a big theme in the 14 - 19 White Paper, that the development of diplomas and other routes will help to ensure that we bring even more coherence to the vocational options that are open at the moment. Is there more that has to be done? Yes, there is, and DfES explicitly recognise that in the 14 - 19 White Paper. But I think we have moved on quite considerably since the time when I was in the classroom giving that sort of advice myself. Q184 Judy Mallaber: My concern was about more recent experiences I have heard from people. Moving on to a slightly older age group, you note the attractions of Foundation Degrees for older trainees who are trying to upgrade their skills to, say, a higher technician level. But the EOC's work on apprenticeships, they put it that they are rarely flexible enough to support "atypical patterns of learning", which are obviously important to combine for older trainees with domestic or other commitments. How urgently is the Government pursuing changes in apprenticeships so that it is easier for women and other under-represented groups to take up places? Jacqui Smith: That is an explicit part of the review carried out last year of apprenticeships, of the way in which apprenticeships are organised. In particular there is a commitment to making apprenticeships more flexible through the introduction of an eight-week probationary period, of improving what is called portability, particularly by allowing apprentices who perhaps start with one employer, and then for a variety of reasons need to move on to others, to actually take that part-completed apprenticeship from one apprenticeship to another. There is work that is due to come to fruition in September 2006 bringing together the Qualifications and Curriculum Authority and the Sector Skills Councils in looking at an apprenticeship achievement record where some of the learning can be better recorded and therefore better transferred around. There is consideration also, I know, about whether or not a registration scheme would enable that flexibility and portability to be better. There are also some quite important opportunities, I think, in terms of what are effectively trials, pilot schemes that are happening at the moment with respect to adult entry apprenticeships. I am sure you will know that last year the Government made a commitment to removing the upper age limit with respect to apprenticeships, and some of the initial trials that have been happening in four sectors are particularly focusing on women returners, prioritising the needs of women returners, looking at things like how we can better accredit prior learning and prior achievement and how we can make sure that those apprenticeships are delivered flexibly in order to encourage women back into them, and in fact the very lifting of the age limit itself of course is likely to make apprenticeships more suitable for women. In the whole area of young apprenticeships the EOC are working with the DfES in that area in order to make sure that in those areas as well we tackle stereotypes. Alongside that - and I know you talked to the LSC this morning - putting a focus on ensuring that the LSC now collects data by gender and background on apprenticeships, making sure that the Adult Learning Inspectorate is responsible for quizzing both local providers and LSCs on the gender breakdown of their apprenticeships, putting a much stronger emphasis on the sort of information and marketing of apprenticeships, as they have done, are important steps in ensuring that we make progress in breaking down the gender segregation in apprenticeships, which, if I am honest, the evidence suggests is there, but it is clearly crucial that we break down given the very great increase in the number of apprenticeships that are now being supported and the growing impact of that for young people. Given what you have said about Foundation Degrees, also the flexibility that is developing which allows you to go through from an apprenticeship to a Foundation Degree may well also be a very important way in which women, and particularly older women, are able to get through to higher education and therefore into some of the higher paid jobs and to tackle some of the occupational segregation issues there as well. Q185 Judy Mallaber: Is action being taken to look at training courses, other training and so on, to look at how you can combine domestic commitments with that kind of training? Also, has that been done in relation to some of our other programmes? One piece of evidence we had suggested that the New Deal for Skills was not being organised in a way which made it easy to combine those commitments; similarly, that it did not really dovetail with the criteria for the New Deal for Lone Parents. I know they are all very complicated, all with their own criteria, but how much effort is going in to trying to look at all those areas to make sure that they have the maximum possibility for people being able to combine? Jacqui Smith: I think the details of the activity, particularly with respect to the New Deal for Skills and its interaction with the New Deal for Lone Parents I do not have at my fingertips. I do know that with respect to apprenticeships it is now possible to offer them part-time; that there is a strong emphasis on making sure, as I suggested, that those apprenticeships are developed as we find new ways of offering them, and that we find precisely those sorts of different ways of offering them which will be more flexible, that will enable that portability, that will enable previous learning to be accredited. All of those things are likely to enable women to access them more easily, particularly, as you say, women who have caring responsibilities. Q186 Judy Mallaber: It raises a continuing structural issue about the difficulty of mainstreaming quality issues. How far are you able, as a Department and in the Equalities Unit, to say to DWP, "We want to look at your criteria for these programmes; are they working?" Then you can formally ask them - and I am sure you do try to intervene, but are you able to have a serious impact and how far would that be something that the Unit would be looking at? Jacqui Smith: Explicitly it would be something that the Unit would be looking at because since 2002/2003 we have an explicit PSA target across Government about delivering achievable improvements in women's equality. What that has enabled us to do is to work with other Departments, sometimes to develop within those departments explicit targets with respect to breaking down occupational segregation. So DfES have specific targets on apprenticeships in fact and improving the numbers of women doing apprenticeships in traditionally male areas. Without saying that all of that is because of the Women and Equality Unit, nevertheless officials do have the ability under the auspices of that PSA to be able to have not just bilateral meetings and to bring pressure across Government, but also to make sure that we report on that and there is improved accountability across all Government departments on how they are delivering on gender equality in this area as in others. We published only in January this year the latest update on progress with respect to delivering to that PSA and it has within it the progress that is being made in this area. Q187 Sir Robert Smith: You mentioned you do not have at your fingertips, the New Deal for Skills and the interaction with New Deal for Lone Parents and the concerns that were raised this morning, so where would be the point of contact? Jacqui Smith: Whose fingertips? Q188 Sir Robert Smith: Yes. Jacqui Smith: We would need to look there to DWP and to DfES but I am quite happy to take responsibility for making sure that you get a response to that question. Mr Berry: That would be helpful. Q189 Sir Robert Smith: One of the things in the sector-specific approach to the problem and looking at apprenticeships, you have dealt with some of the ways of trying to improve participation in apprenticeships but the Equal Opportunities Commission made it clear to us that there is a clear correlation between areas where men predominate and skills shortages. So it would appear therefore that it is in the interest of employers to get more women into apprenticeships in those areas where they have a skills shortage. From your knowledge what are employers doing to encourage non-traditional recruits? Are they waking up to that potential? Jacqui Smith: Firstly, I think your analysis is exactly right, which is why we have always made the argument that breaking down occupational segregation and getting non-traditional entrance into new occupations is about individual opportunity, but it is also about productivity. The summit that Patricia Hewitt and the Chancellor put together last October was specifically called the Gender and Productivity Summit and brought together not just Government organisations, not just the EOC but also the CBI, for example, explicitly to recognise that contribution. I think there are some good examples of where employers in industrial sectors in particular have recognised the importance of this challenge. The Manufacturing Forum, for example, that I have personal responsibility for, which came out of the update of the Manufacturing Strategy, at its first meeting in December highlighted three areas where they thought they needed particular action in respect to manufacturing. One of those was skills and one was the image of manufacturing particularly as it relates to women, and we are taking forward work there, and that includes some very important employers, and employers, as you suggested, are keen to get engaged in that work because they understand the impact it is likely to have on addressing skills shortages. The other area where we need to make that link with productivity is obviously in terms of the work of the Regional Development Agencies, so last week at the meeting of the RDA chairs that I chaired we were able to bring the two Commissioners from the Women and Work Commission to talk to RDAs and to listen to RDAs specifically in terms of what they were doing to recognise the links. We have some RDA pilots running at the moment in London and the southeast and the north-west, specifically looking at women returners, linking there into their work and their responsibilities to address both economic inactivity and getting people back into the labour market and tackling occupational segregation in particular. In the DTI we will be doing the research that I referred to previously and we have some quite good examples in some specific sectors of where the Sector Skills Councils are taking their responsibilities to both identifying the training and skills needs of a sector and how to address it seriously. Construction, for example, where Construction Skills, the Sector Skills Council is undertaking both specific research to identify the links between diversity and successful construction industry and we will be collecting stats and we will be disseminating particular case studies to some of the major contractors, talking about how they can profit through diversity. And in IT we have the work that is being supported by E Skills, not least activities like computer clubs for girls and other work that they are doing through the Women in IT Forum to address the issue of that particular sector. In all of those you are absolutely right that what joins them together is the argument that where you have skills shortages it makes no sense to be recruiting from only half of the population. Employers are recognising that and I think increasingly those links are being seen. Q190 Sir Robert Smith: Even more dramatically perhaps, in your own submission you say that where the barriers seem huge is in the area of graduates in science, engineering and technology, trying (a) to attract them in in the first place, and (b) to retain them. What initiatives so far have been taken to break down the barriers to retention and how are things progressing? Jacqui Smith: I think firstly this is, as you suggested, a very good example of where the productivity arguments and the fact of those economic growth arguments are absolutely crucial. As we said in the memorandum we think we are going to need 300,000 new science, engineering and technology graduates over the next ten years. Patricia Hewitt back in 2002 asked Baroness Susan Greenfield to look at the issue of attracting women into science, engineering and technology and she produced a report, SET Fair. One of the major actions out of that was the funding and the development of the UK Resource Centre for science, engineering and technology, from whom I think you have received evidence. Their explicit remit is to both ensure that we attract in and then - not "trap" - retain within science, engineering and technology women who will be able to make a very important contribution. That needs to be focused in a variety of different ways. Firstly, we need to identify good employers and support them and give advice to them about how they can attract and retain women. We need to act with Undergraduates, and DfES have put some specific money into the Resource Centre in order to identify that group. We need to address the particular issue of women returners in science, engineering and technology because some of the evidence is that this is an area, because it is fast moving, because it involves the most up to date knowledge, where going out of the labour market is likely to make it more difficult for you to come back in again in science, enginnering and technology. Working with the EOU, they are putting together a women returners project, which will enable women to keep up to date with developments that may well keep them in touch with the whole science, engineering and technology world more generally. Then we have the issue - which I do not underestimate - where we have a PSA target about getting 40 per cent of women on science, engineering and technology Boards because in all of these areas actually having some leadership, having some role models is important, and the Resource Centre is contributing to that through maintaining an Expert Women Database so that we can no longer fall back on the excuse, "There are no good women out there" because we will have a database that tells us that there are and who they are. Q191 Sir Robert Smith: Would it be fair to say at the moment that you are identifying a problem and looking at ways of tackling it and measuring it and trying to encourage, but at the moment maybe you are not yet able to point to specific successful outcomes in tackling? Jacqui Smith: Have we cracked the problem yet? No. I think we can point to some successful progress in terms of the Resource Centre and the sort of activities that they are undertaking and that is well and truly up and running and making a difference. I think we have made progress, for example, on the target of women on Science Boards - we have certainly made progress there. We are making progress - if you consider a few years ago - in terms of getting girls and young women to go into science, engineering and technology degrees, for example. Where perhaps we still have the challenge is coming out of those degrees and keeping them in the workplace and making sure they get into senior positions. Where there is concern about making sure that young girls in particular carry on doing science, for example in physics, one of the things that the 14 - 19 White Paper identified was the work that DTI would be doing with DfES and the Institute of Physics to do a bit of research into why girls give up physics. Q192 Sir Robert Smith: And men! Jacqui Smith: O Level chemistry and biology as well, and what can we do to make sure that we keep them and then put them through into higher education? Q193 Richard Burden: Amicus gave us a number of examples of industries where there has been at least some "feminisation" of the workforce but that appears to have been accompanied by a drop in pay overall leading to perhaps male employees who might have been sceptical about employing women in the first place having that hostility reinforced. I wonder what more you feel could be done to prevent employers seizing the opportunity to perhaps overcome some gender pay gap but to overcome it the wrong way? Jacqui Smith: Firstly, I think it is important that we are clear on the extent to which that does actually happen. Where I am clear that there is a problem is in the overall valuing of those jobs which are largely seen as being women's jobs. So that is why one of the things the Women and Work Commission has said today it particularly wants to take forward work on is looking at the value attached to women's work, particularly caring work, and what more we can do to ensure that we make progress there. Let us be honest, some of this sometimes comes down to straightforward stereotypes and discrimination and there are things we can do in terms of challenging that, both this Government and more broadly in society, and I think we are beginning to challenge some of those things. Then there are practical things that we can do can do as Government as an employer and I would point to the NHS where I think that the progress they have made on Agenda for Change, where traditionally those areas of work which were seen as women's work, for whatever reason - and we may have theories as to what the reasons were - have been lower paid, has been challenged by the process that they have gone through of actually evaluating the work and revolutionising in many ways the pay system in order to reward that work on the basis of what people are actually doing as opposed to what the gender of those people who have traditionally been in those occupations has been. So that has been a very good use of the Government as an employer in order to challenge some of those stereotypes and to result in changes in the pay system. So, yes, I think there always has been an issue about valuing women's work; we do need to get more to the bottom of that, and the Women and Work Commission will do it; and we need where we can directly as a Government as an employer have an impact, as we have in the NHS, and make a difference as well, and I think we are. Q194 Richard Burden: You mentioned in some cases you are dealing with straight discrimination, for some women working in non-traditional sectors, non-traditional roles. The problem might be pretty overt, bullying, harassment and so on. You said there is a range of things that Government can do about that but in practical terms what support do you think can be provided to women in that situation and are there more things that could be done or could at least be considered? Jacqui Smith: Firstly, the fact that Amicus have raised this is a good example of the contribution that can often be made by Trade Unions by supporting workers in those areas, and this identifies for us the fact that this needs to be an area where we work in partnership. Where we identify the need to be more explicit in legislation then we have to and will make those changes. For example, we have an opportunity with the implementation of the Equal Treatment Directive coming from Europe to put into legislation what is largely recognised through case law, but could helpfully be made more explicit, about, for example, the illegality of pregnancy discrimination, certain changes to the legislation with respect to harassment. We could obviously provide specific support as Government to support people who feel that either they are facing discrimination or harassment through, for example, ACAS. We can look, when it is set up in 2007, at what the Single Commission for Equality and Human Rights can do to provide that sort of support. We can consider - and undoubtedly will - in the review that we have announced of Equality Legislation, just a fortnight ago, whether or not there are changes that we need to make to legislation in order to address these particular issues. Q195 Linda Perham: Minister, we touched on, through Judy, flexible time work and I am sure you will agree that one of the main barriers to women coming back to work, particularly in higher paid occupation, is difficulties in fitting in with domestic commitments, not just looking after children but older relatives, the particular caring role. When we took evidence from other organisations some thought that it might be a good idea to make it mandatory for employers to offer part-time or flexible work and others felt that it was not necessary. You touched earlier on about not wanting to ignore half the workforce. With employers perhaps realising that they should be using the other half of the workforce is there something to be said for leaving it to employers seeing it as a shortage and thinking, "It is silly to ignore half the workforce", or should we make it mandatory because there seems to be a contradiction in the evidence that we have had and clearly that would require legislation, or could we just extend the current provision to make employers prove that they considered a request properly and that their grounds for refusal were unreasonable? Jacqui Smith: Firstly, I think that this whole area of the combination of caring responsibilities and work, all the evidence, such that we have, suggests it is a very important contributor to both occupational segregation and to the gender pay gap which is why, of course, it is something that as a Government we have taken so seriously in terms of making progress on it. Whether or not it is better support for women in terms of maternity pay and leave in order that you are more likely to be able to return to work after a reasonable period at home with your children, rather than give up work and subsequently go back to work, as we suggested in my response to the first question, in a lower grade and lower paid job. Whether it is recognising that not just mothers but fathers as well have responsibility for caring and what more we can do to make sure that it is possible for fathers to play that role. Or whether or not - and I think this is where you were focusing your question - it is on what we have done and what more we can do with respect to flexible working. Firstly, I would have to say that the way in which we have legislated with respect to flexible working has been a success. The law that has introduced the right to request and the duty to consider for employers of parents of children under six or disabled children under 18, within its first year impacted on nearly one million working parents - as many people as were impacted by the National Minimum Wage to begin with. I think it is worthwhile remembering the history of how we got to the design of it. This was designed by bringing together employers and Trade Unions to work out the most appropriate way of doing it because the objective was that what we have to do here is to develop the ability to have a dialogue about flexible working, because one of the difficulties about legislating is that there are a variety of different ways in which people might want to work flexibly in order to help them to stay working. It might be that making it mandatory to offer part-time work is not the most appropriate way; for some people it might be that they need flexibility about when they start or finish or flexibility around school holidays - there are all sorts of different ways. What we need is a recognition of the economic benefit of offering flexible working, which we had previously begun to develop through the Work-Life Balance Campaign, and then the ability to engage in that dialogue with your employer. All the evidence, as I suggested, of the first year is that we had over 900,000 requests and 800,000 of those were met completely or in part. We have employers telling us that the recent survey suggested that that legislation had provided a legal base from which employers were willing to go further. So seven out of ten employers said that they were willing to consider flexible working requests from the whole of their workforce, not just from those who were determined by the legislation. So do I believe at this moment that making it a statutory requirement in the way that you are talking about would take us forward? I am not convinced it would because, one, I think we have made some progress; and, two, as we set down in the Work and Families Consultation document that we published a week ago on Monday, where we think the next development should be is, as you yourself said, in identifying that it is not just the parents of children who have challenges in respect of flexible working but it may well be those who are caring for older relatives or others in their family. So I think that consulting on how we can develop the legislation to include those as well is the most important priority and that is what we set down in the consultation document. Q196 Linda Perham: Talking about legislation, the Equal Pay Act is considered to have major weaknesses, not least in the area of proving that the comparator cited is "work of equal value" and a number of our witnesses thought that some of the most unsatisfactory features of the current situation could be addressed if group actions were permitted. Is the group action route something that the Government might consider to an amendment to the Equal Pay Act, or would that be part of a wider revision of the Equal Pay Act? Jacqui Smith: In order to bring in group actions to the Equal Pay Act, not only would it be a fundamental revision of the Equal Pay Act, which depends largely on the ability to be able to look at an individual's circumstances and compare that with another individual - and it has been the important basis of that legislation for the last 30 years, wherein I think we have made progress using that legislation - but the idea in UK law of having group actions would involve a fundamental review of our whole approach, without putting it too broadly, to the way in which we expect individuals to take action. So it would be a pretty fundamental change both in equal pay legislation and in UK law. Before we would get to the point where we would want to consider that I think we should be clear that we have done everything that we can do in order to make sure that the current legislation is working better, and we have taken action to make sure that that happens, introducing equal pay questionnaires, so that we are getting an earlier idea about the information which may enable negotiations to happen before you get on to having to take legal action. This issue particularly relates in respect to equal value cases, and improving the way in which equal value cases operate - which frankly are taking far too long to come to fruition - by, as we did last October, changing the rules for the tribunals, allowing them to have specialist tribunals, allowing them to have much stronger case management so that the cases do not take as long as they did, so that the tribunal is able to grip that. New powers for managing independent experts' advice, all of those things, and of course the progress that we are making on equal pay reviews, we need to evaluate and to see whether or not they are working before we undertake what would effectively be a fundamental re-writing of the equal pay legislation. Q197 Linda Perham: You say it would be fundamental and obviously it would, but given that part of the problem with the gender pay gap, which has reduced but not enough over the 35 years of equal pay being in operation, and because of the problem of occupational segregation, do you not think that group action might be a major way of addressing the problem of women being stuck in great groups where they are underpaid compared to male occupations? Jacqui Smith: I think you yourself identified the reason why it might not do everything that is claimed for it, and that is of course that what we now understand is that even with respect to equal value cases quite often the problem is more fundamental even than the straightforward discrimination that you could address through equal pay legislation, and it does relate to questions like occupational segregation and it does relate to issues about how we value work that has large numbers of women in it. It does relate to the challenges that women in particular face from being more likely to be in part-time work or more likely to combine their work with family responsibilities. So what we now recognise as the most effective ways forward are likely to be addressing those broader and probably more intractable issues which is precisely what we have asked the Women and Work Commission to focus on, and they will be looking at how equal pay legislation works, and we clearly want to look at what they said in their recommendations. But my feeling is that it is addressing those broader issues that is likely to enable us to make the most progress. Q198 Mr Berry: There have been calls for permitting group actions for years and years and years; it was an issue that has been bubbling away quite ferociously for some time. You say it would require a fundamental change in legislation, well, Government rightly from time to time engages in some pretty fundamental changes in legislation. I am surprised, given the strength of feeling on this issue that we receive as a Committee, but we have all known around this table for years and years what the demand has been. The Equal Pay Act has been a progressive measure, no question about that, but the lack of ability to engage in group action severely limits what can be done. Can the Government not be encouraged to look at this again? Jacqui Smith: The Government can always be encouraged to take progressive measures, Roger, but there has to be a certain amount of evidence that that is likely to be the most impacting thing that could happen. Q199 Mr Berry: So if this Committee could produce some good evidence - as I am sure we can - that group actions would be a step forward, you would welcome it obviously? Jacqui Smith: This Committee or the Women and Work Commission or, for example, the Discrimination Law Review that we have set up. Our minds are not closed, but I think there are other areas that are perhaps more important for progress at the moment. Q200 Judy Mallaber: I will not pursue that one now! You mentioned about employers undertaking pay audits. Rather depressingly we had some oral evidence that there is no evidence that employers then take helpful action or indeed any action at all as a result of those pay reviews. Would you care to comment on that? Jacqui Smith: I am not sure that that is the case. Is it the case that automatically because you carry out an Equal Pay Review you will solve the problem? No, it is not. But I think it is a pretty important first step and one where we have made considerable progress to actually carry out that Equal Pay Review. What the EOC make very clear in the guidance that they issue on the carrying out of Equal Pay Reviews - which of course they have produced with support from the Government, because we did think it important that we made progress on this - is that actually in order for a review to be a review it needs to contain five steps and the fifth of those steps, can I say, is developing an equal pay action plan. They also make very clear in the Code of Practice that accompanies that that if you are not taking action on the basis of what you have discovered through the comparison, the analysis of your pay system, then that does not count as an Equal Pay Review. So I think that the focus we have put on Equal Pay Reviews through, as I suggested, the Government funding, through the support we have given to Trade Union equal pay reps, through the TUC's panel of experts when it comes to Equal Pay Reviews, from the way in which we have tried to incentivise employers through the Castle Award, that identified particularly good employers with respect to equal pay, which is now incorporated into the Sunday Times 100 best companies to work for, all of those things are likely to mean that we make progress both on equal pay reviews and then also on the action that is an important part of those reviews. Of course in Government we have led the way; not only have we carried out Equal Pay Reviews in all Government Departments and public bodies but the Cabinet Office has also been clear with Departments that action needs to follow from those Equal Pay Reviews as well. Q201 Judy Mallaber: You mentioned there about being cited as one of the 100 best places to work for, so do you think that just undertaking those audits would have an effect on employers wishing to take action to enhance their reputation, or do you think it would only apply to organisations for whom it was clearly shameful to be found out, as happened with ACAS? Jacqui Smith: I think there is a very positive element to carrying out an Equal Pay Award, and it was this year or last year that the company that won the Castle Award for its action on equal pay was also the best company to work for. Good employers know this, that where an employer takes action to make sure that people are treated fairly not only is that likely to retain people, make people think that is a good place to work, but - to go back to what we were saying previously about skill shortages - it is likely to make them more able to recruit their workforce in the first place as well, so there is a win-win there. So there is both the virtuous circle that you address in that way and then there is also the need to ensure that we are encouraging more of those who perhaps have been less quick to recognise the benefits of it to take action. Sometimes, to be fair, that is because employers are not clear about how to do it or how to go about doing it, which is where the Trade Union equal pay reps, where the TUC panel of experts is being extremely important in providing some of that best practice guidance to employers as well. Q202 Judy Mallaber: We have also had evidence from a number of quarters about the need to make such pay audits mandatory. Is the Government inclined to move on this at all? Jacqui Smith: Not at the moment. I outlined the whole range of ways in which we have increased the numbers of equal pay reviews that are happening. We have done that by taking a voluntary approach by putting a considerable amount of support into the system, both to support employers in how they do it and to shed some light in terms of our target on the numbers that are happening, and we are not convinced at the moment that a mandatory approach would be the best way of making progress. Of course, that is within the remit of the Women and Work Commission to consider, and they have said in their interim report that will be one of the issues that they will consider between now and the autumn when they report. Q203 Mr Berry: May I ask a final question. The Government uses its procurement policy to discourage racial discrimination quite commendably, why not use procurement policy to discourage occupational segregation on the grounds of gender? Jacqui Smith: I think there is scope there, frankly. The work that you cited with respect to racial equality stemmed from the public sector duty on race equality which then gave the opportunity for the CRE to work with the Office of Government Commerce. Can I say that this will be over a period of time because this is not an easy nut to crack. Q204 Mr Berry: No, it is not, and I appreciate it is not a direct comparison either. Jacqui Smith: This nut is crackable. As you said, I think the race example is a good one about where it has been possible to put together guidelines that identify where public procurement could help to promote those particular social objectives. There is considerable scope. For example, we would support the EOC working with the Office of Government Commerce and there is work currently going on to look at sustainable procurement and I think this work could fit within that so there is scope for making progress. Mr Berry: Thank you very much. Thank you for coming this afternoon. If we have any further questions we will drop you a line, as they say. Thank you very much. |