John
Penrose: She referred to Bradford.
Vera
Baird: It is implicit in that you would
need to have conditions on it that the people delivering it matched, to
some extent, the community. That is not something new, but I think that
is rather in the way that we talked about people picking marketing
representatives from the same community. I think that already happens;
it is not necessarily discriminatory. That is key and will be driven
more strongly by this. But I also was slightly worried about the
example she gave. I think we should clarify that if people have broken
equality legislation, even if they are only delivering stationary,
which was the example that was given, then they ought not to be coming
into the pool of those who are used to deliver services by a public
authority with a single equality duty. Those are the kind of parameters
of how it should work. I do not think is about micro-managing how a
particular deliverer of welfare to work does it. I think it is just
ensuring that it functions within the ambit of the equality
duty that the public authority wants to pass
on.
Q
224John
Penrose: My concern is that that may not be the intention,
but it may none the less be the outcome, because it is hard to think of
a way in which you can maintain the black box and payment by results
while also requiring the various different contractors and
subcontractors to provide all the information and prove they are
complying with all these additional bits and pieces. I cannot see how
you can have both at the same time. In particular, I am concerned that
it might very adversely impact on some of the smaller subcontractors,
particularly those that may be private sector or third sector, who are
very focused and dedicated and high-quality providers of services to
particular niches. It might be somewhere in Bradford, it might be gay
HIV sufferers in Leeds, it does not matter where, but some of them are
very focused and very effective within their area, but are small
organisations that find it very onerous to comply with some of those
things. Vera
Baird: I am not sure that I follow why
you think that people delivering public services, albeit at one remove,
should not abide by equality law. I am not sure why you think that
requiring them to do so will interfere with how they deliver their
services materially. The whole public procurement process is set out in
stages, is it not? First, we have conditions to allow people into the
pool, then the terms of the contract and how the contract will
work—monitoring whether it is working and so on. All that goes
on now and is not incompatible with what you are calling the black-box
approach. I am not sure why you think that. Of course they already have
to look at issues of gender, race and disability—we are just
adding the other sectors.
Your separate
concern—if it was separate—was about niche providers.
Niche providers will not be undermined at all, as long as we can ensure
that there is provision and overlook for the whole population, if it
needs to be divided into niche markets by niche providers. That is
perfectly satisfactory, as long as there is a spread across the board
and
availability.
John
Penrose: That is a helpful explanation of where we are
coming from. We can explore it in more detail in our later
debates. Vera
Baird: Okay. For my own satisfaction
let me ensure that Melanie does not have anything to add or even
detract from what I have just
said. Melanie
Field:
No.
Q
225John
Penrose: One more small issue. I want to pick up on the
points about the gender pay gap, which we were discussing this morning.
I want to get the Government sense of how much the gender pay gap is as
a result of actions by employers as opposed to other, structural or
indirect problems in the rest of society, often public sector goods and
services that have been delivered at another point in an
applicant’s life, be that in the education system or elsewhere.
What proportion is the fault of employers, which needs to be fixed by
them, and how much of it is from elsewhere in the public
sector? Vera
Baird: May I nitpick? I do not want to
talk about stuff that is the fault of the employers necessarily being
the same as discrimination. There is a certain amount of discrimination
that the employer does not know is going on. I shall explain in a
moment what might be a foreign concept. I do not think that anyone
knows, really, what the amount of discriminatory unequal pay is, but
those on the front line have suspicions—obviously they vary
quite a bit, from what you have seen today. The trade unions would say
that the amount was
sizeable. There
are two kinds of discriminatory unequal pay, are there not? One
is—deliberately, as it were, paying this man more than this
woman or, theoretically, the other way around, although I do not think
that happens very much. We shall tackle that by getting in gagging
clauses, which about a third of the work force are subject to, and by
the general transparency that we
bring. The
other kind of discriminatory unequal pay is indirect. For instance, it
happens quite a lot in local authorities, but also in larger companies,
where work forces have come together because of mergers or
reorganisation. It has simply not been appreciated that employment
group 1 is doing work of equal value with employment group 2 because,
albeit they are in the same organisation now, there has never been a
comparison run. There is in fact gender discriminatory unequal pay.
That is very hard to get to, because the employees almost by definition
do not know that it is there. The employers may not realise that it is
there. That is the real point at which transparency can make a
significant difference in discriminatory unequal pay. Deliberate
discriminatory unequal pay would be exposed by transparency, but the
transparency provisions are really key to that second
element. I
was pleased that Katja Hall this morning said that we need to look at
what works and that she was ready to join in the job that we want to
give to the commission
straight away—sorting out the things to measure, with the TUC,
with the CBI, so that we can have some meaningful metrics. We can then
require in the public sector and encourage in the private sector
everyone to disclose them. I suspect that if that bites as we intend
and results in disclosure among businesses that currently do not
disclose, some businesses will be surprised to find that they have
discriminatory unequal pay of the kind that I have said, which is not
necessarily blameworthy. One hopes that they and the work force, having
found that out, will be able to come to an understanding of how they
get rid of the inequality in pay in an acceptable and manageable way.
The short answer is that I do not think we know how much is
discriminatory, but there are two distinct kinds of discrimination, and
one is not really blameworthy in terms of the employer, but it is
accessed through transparency, which is in large part what the
provisions about transparency are for. There are a
lot of other factors. High-quality part-time work is not available for
people who have had children and come back to work. It is estimated
that about half of women who come back after childbirth work part-time
in jobs for which they are over-qualified because there is not that
kind of quality work available part-time and there is a lack of
flexibility. That is something that we need to tackle in different
ways.
As the Bill
is making progress, we are at the same time putting together a paper on
working toward equality, which is about the whole wider arena of
women’s employment and why there is not only unequal pay but
gender inequality in status and directorships in businesses. We want to
expose where the rest of the difficulties that are not discrimination
still lie, so that we can try to put policies forward to get rid of
them. We have done lots. There is a lot more child care than there ever
was before. There is the ability to ask for flexible working and better
maternity leave. None the less, there is more to do. We want to put
that document out and get input about how we can make progress in the
non-discriminatory aspects of unequal pay.
Q
226Sandra
Osborne (Ayr, Carrick and Cumnock) (Lab): May I go back to
the socio-economic duty? I very much welcome it, although it is quite
limited, because it once again acknowledges the persistent class
inequality that we still have in this country, where people are denied
opportunities because of where they happen to come from. But I note
that the explanatory notes say that this duty does not apply to
Scotland, “except
where such matters are reserved to the United Kingdom
Parliament.” In
terms of tackling socio-economic inequality, that is quite often done
in Scotland on the basis of partnership working across the board
between, for example, health authorities, local authorities, DWP and
other such bodies under the guise of community planning. To say that I
am disappointed that my constituents may not benefit from this duty in
the same way that people will in England and Wales would be putting it
mildly. How has it come about that Scotland has been
excepted? Vera
Baird: It is because the Scottish
Government do not want to have the duty placed on their public
authorities. We would be very ready to extend it to Scotland. We would
welcome it. We agree with you that it is an
important, though limited, duty to put on public authorities so that
there is a recognition that there is still a long way to go to improve
socio-economic equality. We think that that is as applicable to
Scotland as it is here. We wish that the Scottish Government would take
it up. I assume that they do not want to because they want to do things
in their own way, but if they had a change of heart we would be
delighted to extend it to them.
Q
227Sandra
Osborne: You say “extend it”. Would that
have been possible through a Sewel motion? Is that how it would have
been done to be included in the Bill?
James
Maskell: If we had extended it in the Bill, it would
have required a Sewel motion. But obviously you get agreement before
trying to force
it. Vera
Baird: If the Scottish Government
changed their mind and wanted their public authorities to be subject to
the duty, is your question would we need a Sewel
motion?
Vera
Baird: If they wanted to do it, they
would obviously pass the Sewel motion. You cannot use the Sewel motion
as leverage to make them do it.
Q
228Sandra
Osborne: So it could not be done without their
agreement? Vera
Baird: No. They definitely have to
agree, but they do not. They do not want a duty to reduce
socio-economic inequality to be applicable in
Scotland.
Q
229Sandra
Osborne: That is extremely regrettable. This morning, we
heard diverse views on whether pay audits are a good idea per se and
whether they would take things forward. Given the persistent lack of
progress on equal pay, why have the Government not considered making
pay audits compulsory now, rather than leaving them to be done on a
voluntary basis, which has not worked in the
past? Vera
Baird: As you know, we have a power to
compel the transparency that the public sector will have to abide by in
four years if the public sector does not start to comply. We think that
the way forward is to try to get a consensus. It is clear that a large
number of businesses now declare their whole pay structure. Katja Hall
said that it was 50 per cent., but I would be surprised if it was that
many. However, businesses do not declare it in a way that enables you
to compare like with like, sector by sector or across the
board. We
want to get the metrics that will be worked out by this little
group—the CBI, the TUC and the commission —in
play quickly so that we can get the people who are already disclosing
their pay structures to do so according to the same pattern so that
like can be compared with like. That will put a lot of pressure on
businesses that do not do it to do the
same. If
you look at three businesses called A, B and C and A and C disclose
their pay gaps, which are minimal, you will wonder why B is not
disclosing its pay structure. If you are a sensible woman looking for a
job, an ethical investor seeking to put money into one of the
businesses, or a customer operating on an ethical basis, which many
customers now do, you will steer well clear of company B. It will
quickly be to the disadvantage of
company B not to make clear what its pay structure is. It will not want
to make clear that it is a very discriminatory one and so it will move
towards equal
pay. Granted
that the CBI is ready to join in the process with the TUC and the
commission, it is possible to try to make progress consensually. After
all, the Bill is about changing culture, not about making business
inequalities bitter enemies who have to be forced into mandatory pay
audits to get out of a difficulty, when that could be done in a wholly
different way. We think that this is the best way and we will give it a
serious try. In due course, if it does not work and we are not getting
movement towards equality, we have the power and we will use
it.
Q
230John
Howell (Henley) (Con): May I ask some questions on age
discrimination? I will begin with age discrimination outside the
workplace in relation to goods, facilities and services. At the moment,
we are in a position of wanting to have our cake and eat it. We would
all want that. We want to remove negative discrimination but retain the
best of positive discrimination, for example, bus passes and Saga
Holidays. I do not quite understand how that fits together and where
you draw the line. The conflict comes out most in what we heard this
morning from the insurance industry. Could you give an overall picture
of your thinking on
that? Vera
Baird: We do want to have our cake and
eat it, I am afraid. We want older people to have their cake and eat
it. Things like cheap fish and chips in Redcar if you are over 65 and
bus passes must carry on. There is no groundswell of opposition to that
from any sector. Such beneficial age discrimination should carry on and
we intend to ensure that it
does. We
have to look at the area of insurance, in particular travel and driving
insurance. Perhaps we should also look at mortgages and other financial
services. I heard the gentleman from the insurance business today, and
at the moment there is no requirement on any deliverer of financial
services to age-proof the way they deliver those services to make sure
that they are not gratuitously discriminatory as to age. It is very
obvious that insurance in particular deals with risk, and if a risk
increases as age increases then it is actuarially justifiable to
enhance the premium to meet the risk, but there is now no need to check
which one of them it is, and that is the process that we have to carry
out. We have to ensure that appropriately and actuarially brought about
distinctions between older people and younger people carry on, because
that is essential for business and for older people to be covered by
financial services, but we equally have to make sure that they are
actuarially justified and not just piled on.
One problem
that I see in insurance policies is that, often, somebody who is over a
particular age is bracketed with people who are well over a particular
age—65 to 75, for example. Obviously, the risk is going to be
with the 75-year-old, not with the person who is 65 and one day. I
think that issues will arise, when we look closely at that, as to
whether such wide boundaries are really justifiable and whether we have
to have narrower boundaries. That is one example where you can see that
age discrimination could be slipping into financial services. We will
consult, and we have kept on board both the age lobbies and the
insurance companies in terms of membership of our senior stakeholder
groups. They all know what we are doing at every stage and have no real
reason to think that their case is not being heard. We will consult on a
document that will be issued pretty soon—I think I saw the first
draft yesterday, so it is almost there—to try to pick between
the things that are age discrimination and those which are not. The
things that need to be protected—I suppose that Saga holidays
are another one—will need to be subject to exceptions to the age
discrimination legislation, and we will be happy to ensure that they
are available as exceptions, but we have to draw them now to make sure
that we do not capture any unjustified age
discrimination. | 
