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.
Lynne
Featherstone: Could there not be a perverse incentive
there? One of the reasons for us all wanting exposure of all the
information around pay is that our
suspicion is that those who do not disclose it are underpaying women.
Therefore, they might be able to offer goods more cheaply. Is that not
the argument that business is making—“This is a cost to
business. We won’t do it and therefore, by discriminating,
we’re able to keep our costs
down”?
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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