Equality Bill

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John Penrose: I intend to address both kinds of discrimination when we get the clause stand part debate.
The Minister said that such measures take companies by surprise because they discover things they did not know. How can she square that with the calculation of the implementation costs in the Government’s impact assessment:
“We have assumed that the salary/wage data needed to calculate and publish the companies’ gender pay gaps are already collected and available at least for businesses with 250 or more employees who are companies under the Companies Act 2006. We have also assumed data identifying each employee’s gender will be held”?
The Government have assumed that all the necessary data to create a gender pay audit is already held in a readily accessible, easily identifiable form in a company, but she has just implied that companies do not know what is going on because data are not held in a convenient form and that the companies have not been able to see them. Either they are held in a convenient form or they are not. If they are not, the impact assessment will have overestimated the number of businesses that have the data.
The Solicitor-General: The hon. Gentleman is miles away from the point that I am trying to make. I said nothing whatever about such discrimination being unknown to business because the data were not available in an accessible form. Data might be available, but are they being looked at in a way that discloses pay gaps? Very often, that is not the case. If on the other hand he wants to argue that all indirect discrimination is wilfully brought about by businesses who have the data available and do not put right a problem they know about, that is up to him, but I would have thought that that was quite a long way to go. I was simply trying to be fair and to say that I am rather anxious that we should not assume, as he did a minute ago, that all businesses are deliberately getting it wrong.
The impact assessment has been properly done and carefully evaluated and it is correct. None the less, the principle remains. One can take examples from the numerous local authorities that got tied down in the whole single status argument that has been going on for years. Many of them did not know that they were discriminating against particular groups of women, as opposed to particular groups of men, because they have never had to look at the respective pay that was being given. The only way anyone is able to do that is if they know about it. If they also declare in a way that is compatible with the next local authority, they can compare like with like and see why they are in a different position. There is no clash between what I just said and the impact assessment.
We need information, and we need it to be disclosed by the public sector and by the private sector in a way that makes it directly comparable, business with business, sector by sector, so that we can see where the deficits are. The hon. Gentleman is right to say that a number of businesses already disclose information—we accept that completely and are pleased about it. On that bedrock of people who already do, we shall build, engaging them in the group that the commission will manage in order to come to the appropriate measurements, but also because they will be undoubtedly the first ones to declare under the new metrics what they have already been declaring under the old metrics. They will form the platform from which we can all look at the people who are not disclosing their metrics or who are disclosing them in some way that makes them less identifiable.
Sandra Osborne: If there are companies who are disclosing, they are the good guys, but what about those people who currently do not disclose? What makes the Minister think that they will do so voluntarily? What is the justification for waiting for another four years before making it compulsory, given that so many companies do not bother?
The Solicitor-General: The basis on which we think that it will work is that once one has the metrics—I shall come in a minute to setting the system up, which should produce metrics that both sides of industry can agree quickly—the material will have to be made available publicly. It will have to be made available in an accessible form, and it will compare business A, business B and business C. Disclosure now tends to be made—I am not criticising—in a way that is not directly comparable. One might have bank A disclosing all the material that one needs to know, but bank B disclosing it in a different way. One would need to be enough of an insider in bank A and bank B to be able to compare. The stuff has to be the same, so that the employee or the trade union can see where the problems are. If bank A is already disclosing the stuff, and bank C is already disclosing the stuff, any sensible customer, any sensible investor and, overwhelmingly, any woman in her right mind is not going to go for a job with a business that is deliberately not disclosing the fact that it must have a pay gap. If it does not have a pay gap, it would disclose the information.
The Solicitor-General: It will not be five minutes before some bold trade union notices bank B in that non-disclosure position and has a good look at what is going on in the interstices of the pay structure. Transparency is the key, it really is. It is not something that is soft and waffly that will take ages to implement, instead of which we should be hitting business now with a big poleaxe. We are suggesting a sensible way forward, and therefore we favour clause 73 over the proposals in new clause 23 and amendment 248.
The new clause would set out in the Bill details of the gender pay gap information that employers should publish periodically. It would enable—specifically provide for—such information to be used as evidence of a breach of an equality rule or clause, where that case can be made. The clause obviously also has penalties for a failure to publish designated information. Further, it would effectively require a gender pay audit as a precursor to publication, but does not really provide any flexibility in how to go about that.
Although the Government agree with some of the rationale behind the new clause, we are not calling for pay audits in the Bill. There are a number of other significant problems with the new clause. First, it jumps the gun on our proposal, which I am pleased is now accepted by all parties. The Equality and Human Rights Commission and representatives from business and unions are already engaged in the exercise of identifying what measurements and what gender pay gap information employers with at least 250 staff—I will come to that in a minute—will be encouraged to report on, on a voluntary basis.
I am pleased that following its evidence, the CBI—the Committee will recall its representative—indicated that it would encourage the reporting once the measurements have been fixed up. It is engaged in the process now. They have all come together in this way. Later this summer, we look forward to consulting on the options that they have proposed—in fact, they will consult—before they make the recommendations, which will be before the end of the year. Therefore, it is a short-term exercise, and what we should get in the end is material that everyone agrees should come out, and that we will not end up forcing on unwilling people.
12.30 pm
John Penrose: To pick up on the point about the CBI’s comments in our evidence session a couple of weeks ago, I gained the impression that when the Minister asked the question of the lady from the CBI, she said that it was willing to engage with the Government if the clause went through on the ground that, I suspect, it would rather be inside the tent and participating, rather than having it done to them. I did not take the lady from the CBI—in fact, other comments made outside the evidence session support this—to be saying that the CBI supports the principle of these gender pay audits in quite the broad way that the Minister perhaps inferred.
I want to make that clear, as the Minister rightly picked up other members of the Committee on earlier clauses when they quoted external stakeholder bodies and inferred their support for a particular point of view when the stakeholder bodies might not have agreed.
The Solicitor-General: I am not sure that I follow the point. The CBI representative said clearly that if the provisions are introduced she will encourage her membership to abide by them. I was immensely cheered by that, although I am not surprised by it: there are a lot of ways in which the CBI is well ahead of the Tory party on this matter. A number of really modern employers do not adhere, in the way that the hon. Gentleman’s abysmal Back-Benchers did on Second Reading, to the anti-equality, “Let’s go so, so, so, so softly” approach because equality is the opposite of business progress. That is simply not the case.
Many businesses in the CBI are perfectly capable of understanding that business progress and equality go together—they are not the enemies of one another. We are trying to harness that understanding, which modern businesses have, in setting them up with the unions and the commission to put together absolutely agreeable metrics. I am sure that they will have to argue the toss about what the metrics are. I am sure that the two sides will exhibit their natural instincts to protect their own interests, or that of their members. None the less, they are all willing and ready to do it. Indeed, they are even waiting, as the hon. Gentleman suggested, for the measure to pass. They are already going about the business of doing it and I am very pleased.
There is no question of waiting four years, although I know exactly what my hon. Friend the Member for Ayr, Carrick and Cumnock meant about the lack of compulsion for four years. However, we are not waiting four years until we start along the road of getting that material out. The commission will report, I think annually, about progress. It will be saying what the metrics are, how many businesses in all the sectors have produced the metrics and what the metrics are starting to disclose. It will also map what progress the transparency is making towards equal pay. It is a process that starts now, and if it has not finished in four years, there will be more to say and do.
John Penrose: To be clear, I share the Minister’s view that the CBI agrees that equality is good for business, and my party would also share that view in many respects, but I want to be absolutely clear that the CBI’s participation in the Government’s consultation does not necessarily mean that it likes the fundamental idea of clause 73. In fact, the brief that it circulated states:
“The CBI does not support clause 73 of the Bill.”
It may be trying to mitigate the damage by participating should the clause go through, but let us be clear about the principle: the CBI does not like it.
The Solicitor-General: It is puzzling to know why the CBI does not like the clause, if that is its true position. I asked the representative of the CBI in the evidence session:
“Will the CBI take responsibility once the metrics are worked out with the rest of it for driving the requirement through its membership to comply with disclosing those metrics?”
Ms Hall said:
“We would absolutely encourage our employers to use it if we come up with a system that works... I have to be equally clear that we do not support a legislative solution”.——[Official Report, Equality Public Bill Committee, 9 June 2009; c. 94, Q175.]
I asked her clearly, “Will you help encourage?” I used the word “encourage”. She said that she would drive it through her membership. What does the Tory party have against that?
John Penrose: The Minister has just proved my point. The question that she asked was, “Will you be encouraging your members to obey or disobey the law,” and the CBI rightly said, “We will be encouraging them to obey it.” It went on to say, “And we do not agree with a legislative solution.” I think that we are saying the same thing. I just want to ensure for the record that everyone is clear about where the CBI stands.
The Solicitor-General: I think that we are saying absolutely opposite things. I am saying that the CBI, unlike the Tory party, is happy to support driving the metrics, once they are fixed—that is what the lady from the CBI said; it is very interesting and I am most grateful to have been given that quote—through its membership. That is as strong as anyone could wish it and this is not a question whether Ms Hall will encourage people not to break the law.
My hon. Friend the Member for Ayr, Carrick and Cumnock has just made it clear that it is not the law that the information has to be disclosed and it will not be for years. The CBI was saying that it will drive voluntary compliance through its membership once the metrics are fixed. Ms Hall is saying that she would prefer it to be voluntary from start to finish and there not to be set out in clause 73 the ability for a Minister to in due course require compliance. That is what she is saying about the legislation. She is not saying that she does not agree with all this, although it seems as though the CBI is well ahead of the Tory party in that position, which is a shame, bearing in mind the protestations that have been made latterly about how much the Tory party is on board with equal pay—not for very long, it seems.
Anyway, let me move on and say that the consultation process that we shall go through is a major reason for the Government’s decision to make the clause as flexible as possible as to what information may be required from 2013, as we need to see how the voluntary arrangements work in practice and whether refinements for any 2013 legislative regime may be required.
New clause 23, tabled by the hon. Member for Hornsey and Wood Green, would bypass the voluntary regime by requiring designated employers to comply with the information publication requirements within 12 months. We prefer our commitment to working with willing stakeholders to come up with a system that is as workable as possible for them. It would be wrong to prejudge our discussions, as the new clause would do. It talks of consultation with the Equality and Human Rights Commission, but that is on supplementary regulations, not the main reporting principles in the Bill.
Make no mistake: I share the frustration at the lack of progress in closing the pay gap, but bypassing what looks like a process to which all parties are committed and having mandatory arrangements in force by 2011 would run the risk of riding roughshod over the legitimate voice of both sides of the business community. Progress can better be made by bringing employers with us—by including, encouraging and cajoling, rather than compelling. We now have the commitment to drive through, which I am very pleased about.
If that does not work, clause 73 is there. That is what the CBI does not want and it is all the CBI does not want. I do not know why the Tories are trying to pretend that somehow the CBI is opposed to equal pay, because it is not, on the evidence that we saw. Anyway, that is where the Tories are and that is where we are on this issue. Happily, the CBI is standing right behind me on this occasion—and we are not even in a queue. If it does not work—
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