Equality Bill

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John Penrose: Will the Minister give way?
The Solicitor-General: I shall finish my sentence, then I will. In 2013, if this has not worked, make no mistake: we will use clause 73.
John Penrose: I want to clarify the point by asking the Minister to point to any part of my remarks in which I said that the CBI is opposed to equal pay.
The Solicitor-General: The hon. Gentleman said that the CBI is against the legislative provision on this. He suggested that it was saying that it would drive this through its membership only in order not to advise its members to break the law. He knows that that is risible, because the provision does not say that employers must disclose the information. It says that if they do not, in due course they will be made to. However, at the moment it is not about driving the membership to avoid breaking the law. It is about willingness to help with trying to reach an amicable solution. We have a fundamental distinction of principle between the Government stance and the Tory stance, as disclosed in recent interventions. It was fairly clear on Second Reading where the old Tory party was coming from.
I am not sure whether it is intentional that the Liberal Democrat new clause would also apply to the public sector. Technically, it would, and in a similarly unhelpful way it would cut across the specific public sector equality duty consultation that we have just launched. One of the duties that we propose is a duty on public authorities with 150 or more employees to publish the gender pay gap in their organisation.
Another flaw in new clause 23—at this point, I want to wrap it up with amendment 248, which would lower the boundary of 250 employees to 100—is the fact that it would apply to employers with 101 or more employees. We do not want to prejudice the work of the Equality and Human Rights Commission in drawing up proposals for what gender pay gap information could be published, but providing gender pay gap information as required by the new clause would be a significant burden on business. Subsection (4) seems to allow for yet further information, besides what is specified in subsection (3), to be published.
There is nothing to prevent employers with fewer than 250 employees from reporting on their gender pay gaps, and we hope that by starting there we shall none the less encourage the same effect among smaller businesses, but we do not want to impose that burden on them yet. We think, as I shall explain, that 250 is the right threshold.
Lynne Featherstone: I believe that the Minister has said previously that the minute a figure is mentioned—26 weeks or 250 employees—people who are not brought within it think that the legislation disregards them. It would be honourable for employers with fewer than that number of employees to provide the information voluntarily, but the likelihood is that bad employers will not do so unless it is compulsory.
The Solicitor-General: I do not entirely share what the hon. Member for Weston-super-Mare might characterise as an approach suggesting that business will get away with all it can unless it is under compulsion to do something else. I see some large and small businesses already disclosing information; that is happening at all levels. We have tried, for reasons that I shall set out more specifically in a minute or two, to pick the right level at which, ultimately, if we have to, we will impose a burden by law. That is not to say that we do not look to the good small businesses to give a lead by example to the less transparent small businesses.
It is not that we do not expect the impact from big business to drive through little business. Odd as it may be in the current hotbed of views about banks to characterise a bank as benevolent, quite honestly, some banks have very good employment policies. Procurement policies in some big businesses are, to be honest, stronger than the Government’s and they drive equality through the small businesses that want to contract with them.
If we can get the ideas of transparency, disclosure and more equal pay into bigger businesses, we expect that in turn to be usable as leverage on small businesses, because it is clearly another thing that employers will look at when considering how responsible they are being.
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However, even with the threshold at 250, the power in clause 73 covers 40 per cent. of the people working in the private sector. That is our information. We picked that level because we believe that it is when private sector employers are likely to have the necessary IT infrastructure to collate and publish the categories of gender pay gap information with minimal additional burden. It is also worth noting that we do not plan to place requirements on even public sector employers with such a low head count, as the duty in the public sector bites at 150.
A further concern with new clause 23 is that the information required to be published could lead to individual employees’ pay details being identified if there were only one or two men or women in each row in the organisation. I imagine that hon. Members can see my point: the smaller the business, the fewer there are in each category, so the closer we get to disclosing Mrs. Smith’s pay, which is probably undesirable.
On the question of the use to which information published under the proposed new clause could be put, subsection (8) presumes that an equality clause should apply in equal pay proceedings when there is a difference in average pay between women and men doing relevant types of work, which could be rebutted only by evidence that a material factor defence applied. In other words, the new clause would enable the published figures to be used as a key plank of any equal pay claim that might be brought against the employer. That would seem to be the case irrespective of whether the difference was material or statistically completely insignificant. The new clause would enable an individual female claimant, for example, to use figures that showed that women in similar jobs were in general paid more by her employer than men in support of a claim that she is being paid less than a man.
That point demonstrates well how difficult it is to get the balance right between the level of disclosure and the consequences of that disclosure for employers and employees. That is why our approach of learning from the voluntary regime and people on the front line will operate from 2010. We want to create a situation in which employers look at their pay arrangements and equalise them as far as possible without any recourse to litigation. All that the new clause would do is invite proceedings. One can be fairly sure—I do not know why I am supposed to say this—that there will be lawyers looking at the published figures, seeking to target employers who look vulnerable.
Lynne Featherstone: I thank the Minister for that. We are all moving in the same direction. The point is not to defeat the Government; they have moved a long way on equality matters. My fear is that this Government might not be in place for ever and that some of their measures might never come into being. I hope that she is right in her faith and belief that a voluntary regime will somehow lead the way.
One difference between us is timing. I will be brief, as we can deal with timing in the clause stand part debate. Our new clause is supported by all the women’s organisations and the unions. I take my lead from them. They have been fighting the issues for years and years. The Minister is supported by the CBI. I say no more than that.
In terms of the metrics, I am concerned that we are leaving something up in the air for the welcome discussion this summer. Maybe we can have a discussion about metrics later, but my fear is that everyone will be pleased to sign up to something that does not exist in the hope that the force behind it will never come. There are also issues related to the measurability of the metric. As I understand it, one of the arguments against it involves the volume of information that would be published were the pay audits mandatory. It would be easier for the overseeing body, which may be the EHCR, to measure a single metric around which one could look between company and between employer and not have to go through all the information. My fear is that, like targets, it will become the single focus around which people will put in effort.
The Solicitor-General: We are not looking for a single figure. It will need to be more complex than that. Surely the hon. Lady can see that by phrasing clause 73 as we have we have left open a wide margin for the parties. It is not only the CBI that is prepared to engage in the task. Obviously, the TUC is with us as well on this endeavour. We want to leave as wide a margin as possible, so that the parties can agree the best metrics. Then, of course, the advantage we have over her proposal is that they will all agree to it and get on with it, and we do not have to start litigating, litigating, litigating. I say that immensely to my own disadvantage since I am a lawyer.
Lynne Featherstone: I understand where the Minister is coming from, and there is progress with encouragement from the Government. However, when parties are left to their own devices and there are voluntary arrangements, the pay gap takes so long to narrow that I am compelled to think that we have to move to something stronger.
Dr. Harris: My hon. Friend makes the important point that hon. Members from other parties would also feel frustrated—as I think the Minister would—about the time taken. The Minister’s point that lawyers would be hovering around the arrangements proposed by new clause 23 is the incentive that business and employers need to engage in a meaningful attempt finally to take action to reduce that part of the pay gap which is due to direct discrimination. It is important to recognise that this is not a lone attempt to come up with a new approach. It is something that we have been encouraged to table by organisations that are in direct contact with women and specialists in this area. That is why I encourage my hon. Friend in the approach that she is taking.
Lynne Featherstone: I thank my hon. Friend for that and obviously I totally agree. It is that frustration that drives me to say that I am not completely happy with the response. I do not feel that it will make the necessary difference. At an appropriate moment, I would seek the Committee’s view on new clause 23. However, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
John Penrose: I beg to move amendment 14, in clause 73, page 55, line 19, at end insert—
‘( ) the Armed Forces;
( ) the Security Service, the Secret Intelligence Service or the Government Communications Headquarters;’.
The Chairman: With this we may discuss the following: amendment 13, in clause 73, page 55, line 20, leave out paragraph (b).
Government amendment 67.
John Penrose: In contrast to the rather grand issues of principle that we have been discussing up until now and will probably come back to in the clause stand part debate, these are fairly technical amendments and I hope we will not need to trouble the Committee with them for too long.
Amendment 14 seeks to exclude armed forces, security services and so on from the operation of the clause. I notice that the Minister has tabled something similar in amendment 67, although not identical, and I am sure she will explain why her amendment is superior. It sounds as though we are on the same track and we await her comments on the comparative merits of the two amendments.
Amendment 13 is a probing one, seeking to assess the Minister’s intentions to apply the standards of the clause to the public sector. At the moment, it is excluded. I presume that she intends to apply the same standards through the public sector equality duty, but we want her comments on the record. Will she point us to the part of the Bill that contains that or comment on how she intends to apply them, via the public sector equality duty, elsewhere in the Bill? That would be tremendously helpful.
The Solicitor-General: The combined effects of amendments 13 and 14 would be to apply clause 73 to all employers, including the public sector—250 or more employers—other than the armed forces and security and intelligence services. However, there are good reasons why clause 73 does not apply to the public sector. The gender pay gap is wider in the private sector, where 80 per cent. of employees work. We have less detailed information on the private sector than on the public sector. The public sector will be provided for under clause 147, which contains a lower threshold than clause 73. Our detailed proposals are in the consultation documents, the closing date for which is September 2009.
Clause 73(2)(b) would ensure that the clause does not apply to public authorities that are not subject to the public sector equality duty, but that schedule does not include the Security Service, the Secret Intelligence Service, the Government Communications Headquarters or any part of the armed forces assisting GCHQ. As drafted, subsection (2)(b) would bring those agencies, and that part of the armed forces, within the scope of clause 73, but that has never been our policy intention. Amendment 67 will correct that drafting oversight by making the position clear. On that basis, I think that the hon. Gentleman can withdraw his amendment.
Dr. Harris: I am a bit confused about the purpose of the Government amendment. It would help if the Minister could clarify again the overall purpose. That would get to the heart of this group of amendments.
Dr. Harris: The Minister has made herself very clear. However, we are concerned that clause 73(2)(b) exists at all. There is no harm in having both the public sector equality duty and the tougher clause 73 requirements—we do not think that those go far enough, as we know from the debate on the previous group of amendments. Is she certain that there are not public sector organisations where the gender pay gap is just as wide and that an even tougher action than the public sector equality duty, which is an important, but slow boat, would not be best applied in those areas? It seems unfortunate to disapply the public sector, given that, if it met it, everything would be fine anyway.
The Solicitor-General: I hope that for the benefit of the amendments the position is now reasonably clear.
We are not being soft on the public sector—quite the reverse. Through clause 147, to which we shall come presently, we will require public authorities—
1 pm
The Chairman adjourned the Committee without Question put (Standing Order No. 88)
Adjourned till this day at Four o’clock.
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