Examination of Witnesses (Questions 120-139)
CBI, TUC
9 MAY 2007
Q120 Mrs Curtis-Thomas: Yet the main
platforms that are responsible for providing a link between the
employers and education provision in this country are the Sector
Skills Councils and I look to them and I challenge them on a regular
basis about what they are doing to offer experience to women and
young people. They tell me that without direct support from either
CBI or business based organisations they are running into a brick
wall of difficulty. They need the support. Can I hear from you
again about how you articulate something that you say is a very
important objective of the CBI in such a way that it works with
those organisations that are charged with the job of delivering
what your members want.
Ms Anderson: My colleague has
reminded me that Simon Bartley is actually the Chair of SummitSkills
and he is a CBI member and he sits on our Education and Training
Committee, so we are involved.
Q121 Mrs Curtis-Thomas: He is not
sitting there as a CBI member though, is he?
Ms Anderson: No, he would not
be. It is not the role of the CBI—we do not have the staff—to
sit on every Sector Skills Council. You say there are 12 good
ones; there are 24 in all and even the DfES recognise that not
all are very good and that is why Leitch has suggested that they
do need to be relicensed. He has also suggested that they focus
on their key task which is actually not about providing careers
advice to young people in their sectors, it is about ensuring
that the skills needs and gaps are identified and appropriate
action taken to fill them. Leitch has suggested that they ought
to focus particularly on the reform of qualifications which is
something we entirely support.
Q122 Mrs Curtis-Thomas: Could I ask
you, Mrs Veale, about the role of the TUC in respect of the Sector
Skills Councils?
Ms Veale: Obviously in principle
we would like to have a trade unionist on every single one.
Q123 Mrs Curtis-Thomas: But there
is not.
Ms Veale: No there is not and
I accept that and it something we are looking into. It is often
a question of time. Trade unionists are often lay members who
have very busy working commitments and if any of the activities
take place during working hours they have to get permission and
pay to get off and do other things. That excuses some of them.
The trade union movement is not growing at the moment. Full time
officers now have a wider and wider range of responsibilities
that they have to undertake and it is invidious to try to rank
things in terms of importance but it is for each affiliated union
to decide within its limited resources what it is going to put
its people onto. I take what you say and we will try to find out
the exact areas where there is no representation from trade unions
and see what we can do to try to stimulate more interest in that.
I do very much take your point, we should not just preach goodness
and light and then not actually make sure we have bodies in place
to deliver the message and do the work.
Q124 Mrs Curtis-Thomas: I think they
are there, they are charged with the job and I think that matters
very much to both the CBI and the TUC but without direct support
it makes their positions extremely difficult. They also need the
backing of those organisations in order to deliver their objectives.
Ms Veale: We do give them backing,
we train them. We have a whole section at the TUC which trains
people and gets them ready for it and we do try to stimulate particularly
women in trade unions to go onto these things. It is a slow process
and all I can do is agree with you; we need to do better and we
are trying to do better and to get people into these positions.
It is not easy; it is a big challenge but I agree it is important.
Q125 Chairman: Very briefly, because
you have already touched on it, the TUC said the Quality Part
Time Work Initiative was for you a really high priority and getting
your high priority part time jobs is clearly a key factor (which
is one reason why I am trying to keep my local tax office open)
but you were also critical about the lack of funding. What does
that mean your organisation is currently thinking about this Initiative?
Does it mean that it is really not working properly at all? How
would you like to see it develop into a wider programme and does
that require more funding?
Ms Veale: The trouble is that
it is very limited funding and I think because it was done quickly
companies who were already doing well put their hands up and said
they could use some money to keep going with something they are
already doing. If there had been a bit of a step back and perhaps
there had been more active engagement with both of our organisations
and other employers' bodies as well. I think we could have worked
out a much more sophisticated targeted approach to this where
we pick out particular areas and sectors where there is a real
issue with part time work and nobody above a senior level is doing
part time work at all and develop pilot projects which would have
to be funded because you are talking about taking people away
from the workforce, devising programmes with them and then going
back into the workforce to get them running. These things are
not cost free and need much more attention to detail and some
much more careful shaping up of actual projects you could do.
You could then show by example that it is possible to do all sorts
of jobs part time. It is not quite so much of a horrendous challenge
as people think it is. It is a key area though.
Q126 Chairman: We have not lost the
possibility of going back on that because clearly we are in a
position where we can make recommendations.
Ms Gill: We will recognise it
as something that will happen over the longer term. We would need
funding and we would need funding in particular areas where there
is no culture of part time work. I think that is one of the problems.
We have a lot of evidence that shows that women work part time
because they need to and they will go into jobs where there is
a lot of part time work often close to where they live because
of caring responsibilities and so on. So they need part time work
that is local to them and a recognition that more senior grades
may be in areas that have not traditionally been occupied by them
or where they are already occupied. We see it as something that
would happen over a long period of time. It would need pilot projects.
We have talked a bit about best practice and I think it is about
putting a business case to employers. It requires a whole cultural
shift in our attitudes to part time work. Certainly from the TUC
perspective when we have looked at it with affiliates there is
a sense of what jobs could be done part time and almost everyone
sits there saying, "I wonder what jobs could be done part
time?". I think this needs to be explored in much greater
detail. If you are talking about it in the next five years or
something it would require quite a bit of investment.
Ms Veale: If you look at British
Airways that is a very good example. They were actually taken
to a tribunal over it which was unfortunate, but it was sheer
timidity on the part of management: "We can't possibly have
pilots working part time, there'll be crashes, it won't work"
but actually when they sat down and thought about it it is a perfect
industry for part time work but there is no adventurous approach
to it. What you need to do with this initiative is to pick out
those kinds of areas which culturally have become no-go areas
for part time workers and say, "Why? Do it, here you are;
get on with it, this is how you do it. Here's some money, you
work with the union and devise some part time shift".
Q127 Chairman: From the nodding of
the heads do I presume the CBI regards it as equally important
as the TUC?
Ms Anderson: Yes, we could have
usefully had a bigger fund and if we look at companies like Lloyds
TSB for example where they have an on-line job share register
maybe we could, with a bit more money, perhaps take that beyond
individual companies or help other companies use the sectoral
approach so we can put two women engineers in touch with each
other so they can do job sharing. There are some imaginative ways
in which we can build on what is there already. Asda has a part
time manager scheme. People are developing these role models,
as it were, but we can say that with a bit more money we can go
out and make some approaches either on a sectoral basis because
we know there is a particular problem or because we know there
are a lot of women there who would like to work on a part time
job sharing basis. With more money we could do a bit more.
Q128 Mrs Curtis-Thomas: I am not
very sure of my facts here but I understood that the progress
in increasing the number of female directors of companies has
stalled and there was some suggestion that it might have been
reversed. You clearly know better than I so could you tell me
what the situation is with women directors? Is the number increasing
or has it stalled or is it in decline? If so, why? How do we overcome
this sort of problem?
Ms Anderson: I am aware that the
statistics on women directors has recently been published but
I am afraid I do not have it to hand. I agree with you that that
is what it was suggesting but of course it is a one year result
and I think they are looking at FTSE 250 so a few movements can
actually make quite a big difference. I think we need not just
to look at FTSE 100 or FTSE 250 directors, we need to look at
what is happening elsewhere. If you look, for example, at the
number of female managers again we have seen a lot of progress
and that is not stalling. If you look at the statistics there
I think we have gone from eight% female managers to 30% female
managers. Obviously having female managers hopefully they will
reach director level and the board. The other area where there
are grounds for some optimism is among entrepreneurs. We are seeing
more women. Maybe it is for a variety of reasons; maybe it is
because they cannot get the work-life balance they want at work
so they set up their own firms. I do not think we should look
at the directors on boards which tend to focus on the very top
echelons and where a few movements can actually alter the statistics
quite considerably. If we look at managers and entrepreneurs we
are seeing some much more positive signs of change there. I am
happy to get the statistics for you.
Q129 Mrs Curtis-Thomas: How long
do we have to have women in good managerial jobs for before they
become eligible for boards?
Ms Anderson: Clearly you need
to have the work experience that is going to fit you to be on
a board. I agree it is not an area where we can be complacent
but, as I say, the number of women who are setting up their own
companies and therefore are chief executive, chairman of the board
is growing. I think these companies have gone up from 18 to 30%
over five years. That is a pretty good rate of progress but clearly
we need to build on that.
Ms Veale: I think one of the problems
is the sort of clubbishness that still prevails at the very top
of companies and the way you get onto the board is to appeal to
the people who are currently on the board. The way that some exclusively
male boards operate is "nudge, nudge, clubroom, that person
is an okay chap". I think there is a blindness; they just
do not think women are going to fit and that is loaded with all
sorts of appalling cultural and sexist implications. There is
a rather opaque approach to it. There is some kind of osmotic
process by which people get onto these boards which is very mysterious
and cloaked in secrecy. It is not open and I think that is one
of the real problems with this and women just think there is no
point. It is very unpleasant trying and being rejected and women
do not want to go through with it. I can see why they are more
tempted to go off and set up their own businesses; that is really
getting round the problem rather than tackling it head on. I do
not know what you do about it, whether through company law you
take action to force boards to be more representative. You could
do it, you could say that it is not acceptable, it is discrimination,
there are no women on the board, no proportional number of BME
that reflects the local population, no disabled people and it
simply is not acceptable any more. This is presumably outside
the remit of what you are looking at.
Q130 Mrs Curtis-Thomas: Has there
been any cultural shift with regard to promoting women to boards
in the last ten years?
Ms Gill: It depends on the company.
Some companies have bought the business case for why you want
women for example if they are trying to target women as their
customers or they want to recruit more women to their organisation
then they will have seen that this is worthwhile.
Q131 Mrs Curtis-Thomas: Is there
a business case for doing it?
Ms Gill: There is a business case
for it. I would say there is a moral case for it but there will
be others out there in the wider world who do not see that moral
case.
Ms Anderson: If you look at our
submission we are reporting on what is happening in respect of
the Higgs and Tyson report. We talk about the setting up of women
directors on boards which actually is many of the FTSE 100 companies
themselves coming together to ensure that they are creating effective
ways of encouraging people, as Sarah say, from under-represented
groups themselves to move up. In our evidence we are giving quite
a lot of good examples of where this is actually happening but
I certainly agree that we need to make more progress.
Q132 Roger Berry: Moving onto the
legislative framework, you disagree strongly on equal pay reviews.
Is there any realistic alternative?
Ms Veale: I do not think there
is because you are never going to identify a gender pay segregation
problem or unequal pay where it is to do with sex discrimination
until you have open and transparent processes whereby you can
examine grading systems, pay structures, promotion opportunities
and all the rest of it. We have had years and years and years
of employers telling us that it will happen, they will do it,
it is good practice and it is not happening enough. Congratulations
to the ones that do do it. There is a gender public sector duty
which gets near to requiring the public sector not quite to do
pay audits but it is very process driven and it would be very
hard for them to comply properly without doing some kind of auditing.
If it is necessary in the public sector, why not in the private
sector? It is going to hit the private sector through procurement
initiatives so they are going to have to get used to it sooner
or later. I think we will get there because I do not think you
can do this without doing a proper analysis. I will come on later
if you want me to to why that leads to difficulties with individual
claims and all the rest of it, but there is no way that you can
tackle sex discriminatory pay systems without exposing them. I
think employers are going to have to come up with a position where
they are required to do that in company reports or by whatever
means. So yes, we differ on that.
Ms Anderson: It pains me to disagree
with you, Sarah, but it had to happen. This is an area where the
Government set targets and the target was that 45% of larger firms
should have completed an equal pay audit by 2008. I am pleased
to say that we have already got there. According to our survey
58% of larger firms have already conducted an equal pay audit
(larger firms are those that employ more than 5000 staff) and
a further 14% were planning to do so. That 58% from our last Employment
trends survey compares to 44% in 2004, so we are seeing firms
conducting these equal pay audits. Whether they should be compulsory
is another matter. We think we are getting to those firms that
need to do it through good practice. We do not think the small
firms need to go to the considerable expense of having a full
equal pay audit. I think the interesting thing that emerges when
firms have done these pay audits is that whilst half of them found
a pay gap the pay gap was largely as a result of the fact that
men tended to be in more senior positions and therefore they tended
to have higher pay. That explained the headline equal pay gap
which you will see on a firm by firm basis; it was not that women
were paid less for doing the same job as a man, it reflected the
reality of the labour market which is that men tend to be in more
senior positions and are paid more. Some of the other issues that
the pay audits exposed—this is sometimes the reason a firm
does a pay audit—was that they had merging pay scales after
a take over or merger so where you might have a unionised environment
a different union negotiated a pay agreement for certain grades
of staff for a new firm or the merger of a new firm and those
obviously take some time to integrate. Firms will often red circle
groups of employees because you cannot just raise everybody's
pay up to the highest level. That can cause some problems where
you have red circled people after a take-over or merger. Indeed,
you may have agreed to do that with your trade union and hence
some of the problems in the public sector that Sarah as alluded
to earlier. Where companies have identified action they have taken
action appropriately. They may have, for example, reviewed performance
management systems or introduced diversity training or new pay
structures. However, I have to say that in half the cases they
did not discover any pay gap and therefore action was not appropriate.
I think you just have to realise that equal pay audits of the
sort that the EOC suggest are very labour and resource intensive
and they do not in the majority of cases reveal that there is
an equal pay problem. To suggest that this is going to be some
sort of panacea for closing the pay gap, I do not think it will
do that because the days when employers thought they could get
away with paying their women less than their men are long gone.
Q133 Roger Berry: What do you estimate
is the cost of a small company doing an equal pay audit? I am
a small company; like most members of Parliament I employ two
or three people. I comply with all the equality legislation that
is currently on the statute book as I am aware and I do not find
it a burden whatsoever. What kind of burden in reality is doing
an equal pay audit for a company employing ten people?
Ms Anderson: If I could direct
you to the EOC's equal pay tool kit, it is pretty comprehensive.
You could say, "I've looked at the pay levels and I can't
see any problems". Do you have to go through all the complexity
of a pay audit to say that? That is not what we are saying. We
are not saying that every single company, even if they only have
three people employed, have to do this particular pay audit. Obviously
the smaller a company is, the quicker and easier it is because
you are not doing massive job evaluations.
Ms Veale: The thing is, Susan,
in a large company there is no substitute for doing a proper pay
audit. It should be done as a matter of good practice. You say
they are doing them and they are not identifying any serious sex
discrimination problems, then good. Companies should do them and
say, "We've done one, there are no serious sex discrimination
problems, there are no sex discrimination problems" but you
have this 42% on your own statistics of employers over a particular
size who are not doing them. It is not good enough. They are undercutting
good employers and sex discrimination in pay systems is illegal
in this country. It is serious; they are breaking the law and
it is not acceptable.
Ms Anderson: We are not finding
that it is at all as widespread as you are suggesting and therefore
we do not think that equal pay audits are the solution; there
are better ways of addressing the gender pay gap. You asked me
about a medium sized firm, in our evidence we gave some of the
examples of how much it did cost. For example, with a firm of
700 staff they had to pay £14,000 to an external consultant
to come and do a pay audit. That is quite a lot of money if you
only have 700 staff to discover you do not have a problem. Maybe
you are going to say that that is money well spent but I have
to say that when you are looking at your diversity issues then
conducting a pay audit when you know you have done a simple analysis
and there is no problem is it sensible to say you are going to
spend £14,000 on a consultant to do the EOC—which is
what will happen if we have legislation—recommended pay
audit. You might be better off spending your time providing that
resource to train managers, to think about some other positive
action. There are better ways of spending your money than going
through a tick box exercise of saying you have done an equal pay
audit.
Q134 Roger Berry: So that would be
about £20 per employee.
Ms Veale: I question your figures.
With 700 we would do it for you for a quarter of that price.
Roger Berry: This is on public record;
this is progress.
Chairman: We knew we would not get agreement
on this issue and this is a good reason why we wanted you both
here at the same time.
Q135 Mrs Curtis-Thomas: You both
say that public procurement is a very good vehicle to promote
equality and diversity and that is absolutely splendid. I guess
you can give me a number of good examples where public procurement
has done exactly that.
Ms Veale: I think it is working
in London. If you look down the road at the GLA they are taking
some very important initiatives on that and it is beginning to
work. I do not have their information to hand.
Chairman: We are asking them to
come and see us.
Q136 Mrs Curtis-Thomas: What about
outside London, where we have major public procurement projects
that are driving the diversity and equality agenda?
Ms Anderson: If I am honest it
is patchy.
Q137 Mrs Curtis-Thomas: Do you have
any examples?
Ms Anderson: Yes, we do have examples.
I am happy to send them to you; I do not actually have them to
hand.
Q138 Mrs Curtis-Thomas: I would like
to see them.
Ms Anderson: I am very happy to
send them to you. What our members tell us is that what they will
find is that they will be asked to bid on the basis that they
have effective diversity policies—it may be on gender, it
may be on race, it may be on disability—and they will spend
a lot of time putting in a bid to demonstrate just how they are
prepared to take very positive action. Then to their disappointment
they find that whoever is doing the procurement just goes for
the cheapest bid. That is very disappointing and of course it
does nothing for this whole issue of diversity or the commitment
to diversity if, having put in your bid, you know it has just
gone to the lowest bidder who has not actually made any attempt
to address the diversity agenda. That is a common complaint from
our members.
Q139 Mrs Curtis-Thomas: Is that public
procurement in the local government sector or for major government
departments.
Ms Anderson: It is across the
piece.
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