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. 12.45
pm 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.
The
Solicitor-General: I confess that I, too, got a bit
confused in the middle of that response. I shall reiterate my point. We
do not intend clause 73 to apply to public sector employees, for the
reasons set out, and that would be the combined effect of amendments 13
and 14, even though that is not the issue—I do not
think—that
they were intended to probe. Subsection (2)(b) would ensure that clause
73 does not apply to the public authorities in schedule 19 which are
subject to the public sector equality duty. The schedule does not
include the Security Service, the Secret Intelligence Service, GCHQ or
the armed forces helping GCHQ, which means that subsection (2)(b), as
drafted, would bring those agencies and that part of the armed forces
within the scope of the clause, but that is not our policy intention. I
am sorry that I was not clear enough before. Amendment 67 will remove
them from the scope of the clause.
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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