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“prevent discrimination, as regards terms and conditions of employment, between men and women.”
Yet the Office for National Statistics’ earnings survey spells out the reality in simple terms. In 2008, the average full-time wage for a man was £27,500; for a woman, it was £21,400. The gap has been reduced over the years, but it still needs much further reduction. It has been suggested, however, that there is no point in squabbling about equal pay if there are no jobs in which to be paid unequally.
Women in the service sector, and particularly the retail sector, are going to feel the most devastating effects of the recession. A recent CBI service sector survey revealed that jobs are being lost at the fastest rate in over a decade. That shrinking is putting in jeopardy the one employment sector that is significantly more amenable to the domestic situation of women than other sectors, because of flexible, part-time working. With the retail sector in decline, we should be particularly worried about the effect on employment for women. The work might not always be glamorous, skilled or particularly well paid, but it is practical for mothers.
There are two issues relating to flexible, part-time working that need to be tackled. One relates to educating employers at the other end of the spectrum from the retail sector about employing part-time staff. Such employment is often regarded as suitable only to the retail sector, and employers often fear that it will be more costly to employ people on a part-time basis. I am sure that other hon. Members will have come across an organisation called Women Like Us, whose members go to the school gates and deal with one half of the issue by giving women who have had a career break the confidence, through hand-holding and skills training, to get back into work—part time to start with. The other half of their really important work is to demonstrate to employers at all levels of women’s employment that it is not more expensive to employ people part time, and that it is beneficial to their companies. If we can get companies to spread that best practice, there will be more opportunities for women in part-time work right across the spectrum of the working world.
We can always argue about the quality of work—I spent a fair time myself washing up, serving in shops and table waiting—and we can talk about the burden of child care, as the hon. Member for Regent's Park and Kensington, North did so eloquently, but given the urgency of the situation, one of my concerns is what is done in an emergency or crisis and where the Government put their money. It would be tragic if the high level of female employment and the advances made on equality were swept away by the recession.
Without going into the issue in a long-winded way, one must say that whatever the business model of Woolworths—it may not have been the most likely to survive in any case, in the face of increased competition from the internet and the way in which the world has generally gone—we could equally criticise the business model of certain car manufacturers that relied on endless supplies of unsustainable credit and allowed consumers to keep buying cars that they could not afford. The key difference between those sectors is that one is to receive Government money and the other is not.
We should, of course, consider the economic benefits on a case-by-case basis, but will the Minister tell me in winding up the debate whether any consideration was given—and if so, what—to the equality impact of the decision collectively to subsidise some industries as opposed to others? I would be grateful if she confirmed whether an equality impact assessment was done? It is my understanding that, under current equality legislation, there is a duty on the Treasury and the Department for Business, Enterprise and Regulatory Reform to carry out such assessments in respect of any substantive policy change. It would be dreadful if money were used that ultimately turned out to be discriminatory as an unintended consequence. These are important checks and balances to ensure that women and minorities are not ignored or suffer disproportionate detriment in the decision-making process. The mere fact decisions have to be made quickly in a crisis should not be an excuse for processes to be abandoned completely.
I shall now deal with maternity benefits—the risks posed for business, but more importantly, for women. We have to recognise that employers face unprecedented challenges in maintaining the viability of their businesses during an economic downturn. It is difficult to find exact figures, but maternity leave is a significant employment
cost, particularly for good employers who pay above the statutory minimum. As employers try to squeeze their costs down, it is not hard to imagine that firms offering maternity pay plus benefits will begin to reduce such benefits.
That is an open and legitimate process. If an offer is made to women not to come back to work after maternity leave and instead to receive some redundancy package, it is reasonable to assume that some will exit themselves from the workplace. They will then face even greater barriers getting back into work in a few years’ time. Those who choose to stay in work rather than be persuaded out of it, and whose maternity benefit is reduced to the statutory minimum, will have to manage on a very low amount. The statutory minimum is £117.18, although most women receive on average £400 a week—a substantial difference. I refer only to companies that are legally allowed to act in that; there are probably darker consequences for women’s employment.
Angela Watkinson (Upminster) (Con): Does the hon. Lady agree that there is also a danger that in the recruitment process employers may favour applicants with no children? In an economic downturn, when employers are worried about the costs that she describes, there will be a disadvantageous effect on anybody with children who applies for a job.
Lynne Featherstone: The hon. Lady makes a very good point, which I was about to make. I was talking about the legal reductions that employers can make, but when we get on to interviews and the choices employers make, a young woman of child-bearing age is very likely not to be offered the job. That is true in any case. According to the Equal Opportunities Commission—before it became the Equality and Human Rights Commission—in 2005, 30,000 women a year were being sacked for being pregnant. More recently, Nicola Brewer, the chief executive of the EHRC, said that women were not being employed for the very reason that the hon. Lady states—that it was better for employers not to employ such women, which might mean opening themselves to problems and the risk of further costs. If it is bad now, we can expect that women will find it harder and harder to get jobs as the recession bites.
Miss Kirkbride: The hon. Lady might be interested to hear what a friend of mine in the banking world told me. While banks are looking for redundancies, especially at the top end of their staff, women have sometimes been asked to leave before men because the men were deemed to be the principal breadwinners and the women had husbands to look after them.
Lynne Featherstone: I thank the hon. Lady—no, I do not thank her, as that is a depressing scenario, which I fear is still too prevalent in the wider world. One might have hoped that we had moved on from that, but apparently we have not.
Mr. Mark Harper (Forest of Dean) (Con): In the light of the hon. Lady’s response to my hon. Friend the Member for Bromsgrove (Miss Kirkbride), she might be interested to know that research published by the Government Equalities Office shows that that view is widespread: 72 per cent. of men and 72 per cent. of women think it important that family breadwinners’ jobs are preserved first when organisations are thinking about who to make redundant.
Lynne Featherstone: The hon. Gentleman makes a very good case to demonstrate the importance of equal pay and the Equal Pay Act 1970—that more often than not the principal breadwinner would not be the man; perhaps some of those somewhat old-fashioned values could be left a long way behind.
I started by talking about yesterday’s wonderful event at No. 11 Downing street, the prime intention of which, so far as I can gather, was to raise women’s voices and concerns about the economic downturn with the G20. I say to the Minister that it is equally important that those voices find a resonance and outcome in the equality Bill. I have some concerns about what may be proposed on equal pay, because the differential is still severe. Although the Government are genuinely seeking to make what employers will or will not have to show open and transparent, there will still be a differential between Liberal Democrat and Labour Members on mandatory and voluntary pay audits. There is the further problem that, irrespective of whether those audits are mandatory or voluntary, merely watching something is not enough.
I recently referred Cambridge university to the Equality and Human Rights Commission because it voluntarily published its pay differentials. I believe that the differential between male and female pay is about 32 per cent. It is not enough to have the bare statistics; in the end, we have to drill down to find out the whys and wherefores—what is historic, what is discriminatory, what is rational and so forth. On finding discrimination, we need to know what will be consequent upon that finding. I am anxious that the equality Bill, in its treatment of equal pay, does not simply add a process or a tick box. Such an approach has come into disrepute; too often, the equalities and the environmental impacts of reports that go through various committees or agencies are an afterthought—or just a tick-box. They must have real meaning; equal pay is just such an issue.
I am concerned about the ominous rumblings coming from Lord Mandelson, which the right hon. Member for Maidenhead (Mrs. May) also referred to. The trade press and the right-wing press have been littered recently with scare stories: I do not know that they emanate from Lord Mandelson, but I believe that some of them may well do, as he was quoted in some. These scare stories are vilifying various parts of the Bill. If Lord Mandelson seems to be stepping in as the white knight, saving business, it is dangerous and a false dichotomy to pit equalities against the need of the economy. The needs of those who face discrimination do not stop where the needs of British businesses begin.
I read reports of a confidential memo from the Chancellor and the Secretary of State for Business, Enterprise and Regulatory Reform—confidential enough to be shared with The Times and Ministers—that asked them to
“advise on a moratorium on legislation and legislative announcements made but not yet implemented that will entail additional costs for businesses”.
The tone of those briefings to the right-wing press and the business lobby seems to indicate that companies that continue to discriminate will have absolutely nothing to fear from the forthcoming Bill and the equalities legislation.
My sense is that those in the Cabinet who share my sense of urgency about the need for greater action on inequality are fighting against the tide. I am not naive
enough to argue that there will be no cost to legislation to tackle equality, but the Government have to have the courage of their convictions, and their own statistics on costs bear out the plain economic sense of tackling that inequality.
The Government Equalities Office estimates in its initial impact assessment—the detailed cost-benefit analysis—that the maximum one-off costs of the Bill will be £221 million. That is the up-front cost to Britain of the new equality regulations.
Mrs. Theresa Villiers (Chipping Barnet) (Con): I am sure the hon. Lady agrees that all of us in the House, especially those who are interested enough in the issue to attend today’s debate, need to go out and make the case for equalities rules and the benefits that they can confer on employers. Yes, as she says, there will be costs that have to be taken into consideration, but, for example, the benefits of introducing flexible working can be clear in increased productivity from a work force who are happier and better able to care for their children.
Lynne Featherstone: Yes, I agree totally with the hon. Lady. We have a huge selling job to do here—cross-party—on the benefits to employers of having a diverse and flexible work force, rather than the traditional one that we have always had. We must consider the benefits of home working, conferencing and all sorts of things that can be done that would be money saving. They are the benefits, but the way they are portrayed to business and the media sabre rattling scare business off. We meet that attitude wherever we go, so I thank her for raising that point.
I was doing a little bit on the sums, and £53 million of the up-front costs could be offset by the maximum estimates of immediate benefits. That would leave £168 million. The one-off costs apart, the range of the annual recurring benefit—continued, as has been said—is estimated to be between £122 million and £165 million against a recurring annual cost of £24 million to £53 million. Taking the mid point, for the sake of argument, that would mean about £143.5 million of benefits versus £38.5 million recurring annual costs of the new legislation. That works out as a net benefit of £105 million for every single year the legislation is in force. At that rate of return, it would take just over 19 months to recoup the initial cost of the legislation. The argument is completely specious. We have to go out there and make it, and not let the Government back down, because the legislation is not expensive. I would argue that we cannot afford not to introduce it.
There is no doubt that business is hurting and hostile, but one reason for that might be how the Bill has come forward. I do not know how much discussion the Government have had with business, because there has not been a Green Paper or a White Paper; nor do we know what is coming in the final draft. It is hard to have these discussions. I met the Institute of Directors yesterday. I do not think that it is totally at one with the Bill, but it is more frightened because it does not know what is going to be in it. Indeed, we do not know what is going to be in it. The way to have good legislation is to introduce a Green Paper and a White Paper, and to allay those legitimate fears of business.
The Solicitor-General:
We did, of course. The hon. Lady must have seen the extensive consultation, which went on over years, and the consultation document that
summed up what we were going to do and tried to achieve a consensus. In the past six months, two documents have set out how business and other stakeholders reacted. There has been a pretty extensive consultation and a great deal of this has an element of consensus around it. Business is fairly chequered in its response, although up in the north-east there have been some pretty positive responses on the basis that she has set out—it is understandable that there is no clash and that there is a benefit involved.
We have consulted pretty extensively, but—this is probably more to the point—as we have gone along we have consistently been in touch with stakeholders. We have meetings practically weekly with stakeholders, either in a group or bilaterally when they have particular concerns. The hon. Lady does not need to worry about that and we look forward to sharing the Bill with hon. Ladies on the Opposition Benches when it is ready.
Lynne Featherstone: I thank the hon. and learned Lady for that intervention. Perhaps I have gained a false impression because of the lack of information coming my way.
As I bring my remarks to a close, I want to outline the potential for a fairer economy emerging from this recession. I have highlighted some of the flashpoints for women where there are risks. It is a real and present danger that the hard-fought-for equality that everyone has worked so hard for—we have many hopes for the Bill—might be eroded if more is not done to shelter those freedoms from an economic storm.
Many hon. Members wish to speak, so I shall not dwell on this point. I do not want to use the word “opportunity” because that is not what a recession is; it is devastating for those who suffer a direct strike. A more apt metaphor would be to make the best out of a bad job. Throughout history, the responses to economic turmoil have led to profound social upheaval—some good, some bad. There is a complete contrast between what happened in America under Franklin D. Roosevelt and the new deal, which is the model I hope we will follow, and what happened in pre-war Germany.
The Prime Minister has made much of his crusade to rewrite the rule books of international financial markets, but he has not said much about the opportunity to rewrite the equalities rule book. The Government have become the insurer of last resort to a wide range of major commercial sector industries, not least the financial industry. As they are now beholden to the taxpayer, it would be reasonable for the Government to make some modest demands in return, given that we have this wedge into the private sector, when normally we are not allowed to stick our noses in so far. The priority must remain re-establishing the financial health of those companies and achieving proper functioning of the credit markets, so surely, in the meantime, we should use the opportunity of owning chunks of the private sector to look under the bonnet and see what we need to see about the inequality that festers there.
We should consider the boards of banks, for example. I do not think that they are particularly diverse. It would be interesting to look beneath that and to find out what the challenges are to the private sector and how diversity could be improved in those hidden places.
Mr. Harper: The hon. Lady is speaking as if the public sector has an unparalleled reputation in appointing women to senior posts. To be fair, the Government have made that a priority, but I understand that the percentage of senior public appointments held by women has barely moved in 10 years, despite a great deal of effort from the Government.
Lynne Featherstone: I agree with the hon. Gentleman—a plague on both their houses on that one—but I am talking about the private sector. If one looks at the Treasury, one might find that most of the top civil servants are of one gender. I am talking about the opportunity that we do not usually get. The single equality duty will apply to the public sector. The private sector and the 80 per cent. of people who are employed by it will not be adequately covered by the protections of the equality Bill in the way the public sector will be, but I am simply saying that while we have the opportunity presented by nationalised or part-nationalised banks, as well as being busy sending in the auditors and the actuaries to work out how to strip certain directors of their pensions and to look at all the stuff that is going on, I hope that the Government Equalities Office will be sending in its own experts to benefit from this unique experience and understand what has been going on with equalities in those industries, as the Minister for Women and Equality, who is no longer in her place, said.
As was said in the group discussion that I attended yesterday, some believe that, had women been more plentiful in the boardrooms of banks—
Angela Watkinson: Is the hon. Lady aware that as recently as the 1960s, any woman who worked in a bank was regarded as temporary staff, even if she remained there throughout her working life and never married?
Lynne Featherstone: My goodness! I did not know that it was as bad as that. How far have we moved on, I wonder?
Yesterday, the view was expressed that had there been more women at senior levels in banks making decisions about investment—I do not want to be too sexist or pejorative, but women and men may have different approaches to risk management—some of the gambles that were taken might not have been taken in such a macho way, given that, broadly speaking, women are more risk-averse than men. By saying that, I may have opened myself up to all sorts of comments.
Anne Main (St. Albans) (Con): The hon. Lady has made an interesting point, but may I caution her, as a mum who looks at her elder son and thinks “What he needs is a girlfriend to civilise him”? Mothers are known to say such things, but I say them in jest. I should hate to think that women are there to exert a civilising and controlling effect on men. We are there as equals.
Lynne Featherstone: I take the hon. Lady’s point. We are equals. However, conflict resolution is an issue, and that may include bank boardroom conflict resolution. I should like to think that I am as able to negotiate and understand risk as anyone else, but I would argue that the absence of women creates a different dynamic in the boardroom. Indeed, we might find that there have been leaders of this country who have been dynamic in a way that I might not describe as wonderful.
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