The Committee consisted of the following Members:

Chairmen: Mr. Joe Benton, David Taylor, † Ann Winterton

† Abbott, Ms Diane (Hackney, North and Stoke Newington) (Lab)

† Baird, Vera (Solicitor-General)

† Baron, Mr. John (Billericay) (Con)

Boswell, Mr. Tim (Daventry) (Con)

† Brown, Lyn (West Ham) (Lab)

† Drew, Mr. David (Stroud) (Lab/Co-op)

† Featherstone, Lynne (Hornsey and Wood Green) (LD)

† Foster, Michael Jabez (Parliamentary Secretary, Government Equalities Office)

† Griffith, Nia (Llanelli) (Lab)

† Harper, Mr. Mark (Forest of Dean) (Con)

† Harris, Dr. Evan (Oxford, West and Abingdon) (LD)

† Hesford, Stephen (Wirral, West) (Lab)

† Howell, John (Henley) (Con)

† Mason, John (Glasgow, East) (SNP)

† Osborne, Sandra (Ayr, Carrick and Cumnock) (Lab)

† Penrose, John (Weston-super-Mare) (Con)

† Sheridan, Jim (Paisley and Renfrewshire, North) (Lab)

† Thornberry, Emily (Islington, South and Finsbury) (Lab)

Alan Sandall, Eliot Wilson, Committee Clerks

† attended the Committee

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Public Bill Committee

Tuesday 23 June 2009

(Afternoon)

[Ann Winterton in the Chair]

Equality Bill

Clause 73

Gender pay gap information

Amendment proposed (this day): 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;’.—(John Penrose.)

4 pm

Question again proposed, That the amendment be made.

The Chairman: I remind the Committee that with this we are discussing the following: amendment 13, in clause 73, page 55, line 20, leave out paragraph (b).

Government amendment 67

The Solicitor-General (Vera Baird): Welcome back to the Committee, Lady Winterton. I believe that I had dealt with the specific technical points raised by amendments 13 and 14 and explained Government amendment 67, but Conservative Members made it clear that they intended to use their amendments to probe the bigger point that relates to clause 73 and question why the clause does not apply to the public sector.

The Bill’s purpose is not to compare the private and public sectors, like for like. The Government’s approach to the public sector is to impose an equality duty on it. One of the things that entails is for public authorities to demonstrate their compliance by reporting on their gender pay gap, though that has not been in the requirement. The proper place for detailed public sector requirements is in secondary legislation under clause 147, which we will debate in due course. That gives us flexibility to amend the requirements, should experience suggest that that is necessary.

The reporting requirement should not be seen in isolation. It relates to a number of things that public authorities should do to advance equality, foster good relations and eliminate discrimination, which are the terms of the duty. So we are not singling it out from the other specific duties. In that way, the requirement to be transparent about gender pay is firmly anchored in the wider requirements on the public sector.

To single out that requirement by also subjecting the public sector to clause 73 would introduce a sort of unwarranted double jeopardy situation. Public authorities that do not comply with their duty obligations will be subject to Equality and Human Rights Commission

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compliance notices, which are enforceable in the civil courts. It would be overkill to hit them with civil and criminal action under clause 73. It would also not make much sense.

The intention is that the duties will begin to operate from April 2011, which is two years before the power under clause 73 might be used. The duty on the public sector is more stringent. The equality duty requires it to have due regard to the need to advance equality, eliminate discrimination and foster good relations. As part of that, public authorities with more than 150 employees will report their gender pay gaps and other relevant metrics. As I have already explained, I would not want to lower the 250-or-more employee threshold in clause 73 to match that of the public sector.

If the suggestion is to replace the duty and pull it out of the single equality duty by putting public authorities under clause 73, it would be a regressive step for public sector accountability. Our detailed proposals for the specific duties are set out in the document, “Equality Bill: Making it work. Policy proposals for specific duties”, which we published on 11 June. That sets out specific duties to enable public authorities to carry out the equality duty more effectively. The closing date for that consultation is 30 September, and we hope to receive contributions from members of the Committee. We aim to publish our response before the end of the year.

I hope that that satisfies Conservative Members that we have gone in the right direction in putting the onus on gender pay reporting in the equality duty, with all its other characteristics, and not involving the public sector in clause 73.

John Penrose (Weston-super-Mare) (Con): It is a pleasure to see you in the Chair, Lady Winterton. Based on the Minister’s response, we are quite content. We were most concerned to ensure that there would not be one law for the public sector and another for the private sector. In fact, that may still be so, but there will be a slightly tougher regime for the public sector. In that case, we have no objections, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 67, in clause 73, page 55, line 20, at end insert—

‘( ) a government department or part of the armed forces not specified in that Schedule.’. —(The Solicitor-General.)

This amendment would exclude the security and intelligence agencies and GCHQ’s military helpers from the scope of Clause 73. As a result, that clause would not apply to any government department or any part of the armed forces.

Question proposed, That the clause as amended stand part of the Bill.

The Chairman: With this it will be convenient to discuss new clause 9—Disability pay gap information—

‘(1) A Minister of the Crown may by regulations require employers to publish information relating to the pay of employees for the purpose of showing whether, by reference to factors of such description as is prescribed, there are differences in the pay of employees who have a disability and employees who do not have a disability.

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(2) This section does not apply to—

(a) an employer who has fewer than 250 employees;

(b) a person specified in Schedule 19.

(3) The regulations may prescribe—

(a) descriptions of employer;

(b) descriptions of employee;

(c) how to calculate the number of employees that an employer has;

(d) descriptions of information;

(e) the time at which information is to be published;

(f) the form and manner in which it is to be published.

(4) Regulations under subsection (3)(e) may not require an employer, after the first publication of information, to publish information more frequently than at intervals of 12 months.

(5) The regulations may make provision for a failure to comply with the regulations—

(a) to be an offence punishable on summary conviction by a fine not exceeding level 5 on the standard scale;

(b) to be enforced otherwise than as an offence, by such means as is prescribed.

(6) The reference to a failure to comply with the regulations includes a reference to a failure by a person acting on behalf of an employer.’.

John Penrose: During our morning sitting, when we were considering the earlier groups of amendments to the clause, we had a reasonable debate on some of its principles. I shall try to be brief, because we have given at least some of them a fair airing already. However, I want to put a couple of additional points on the record.

When I started investigating the history of the gender pay gap, I was fascinated to discover that there is something of a success story to be mentioned. That is not to say that the job is all done—far from it, there is still a serious issue, and let no one be under any illusion about its severity or importance—but it is worth while pointing everyone here and the wider world outside to the figures in “The gender pay gap in the UK” study, which the Office for National Statistics published in April 2008. Interestingly, figure 5 shows that the gender pay gap has declined from not quite 30 per cent. in 1975—the first year that the Equal Pay Act 1970 came into effect—to just under 13 per cent. in 2006. It has pretty nearly halved—albeit at a rather slow and steady, almost stately pace—over the intervening 31 years covered by the study.

It is clearly true that we have made great progress as a country, under successive Governments of different stripes, but also that there is a great deal further to go. It is interesting, looking at figure 6 in the same report, to see that the gender pay gap for full-time employees by age has declined very dramatically for people under 33. In fact, for employees under 33 the gender pay gap is now zero—or was in 2006—compared to 1975, when it was significantly higher.

It is therefore important for us all to realise that, contrary to what some people have said in the evidence that we have received, it is not fair to say that the current measures are not working. They clearly have been working over an extended period. That does not mean that there is not further to go and that progress has not been stately, as I said earlier, but this country should be proud of its track record, while none the less pointing out that an injustice remains to be dealt with.

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Dr. Evan Harris (Oxford, West and Abingdon) (LD): The hon. Gentleman will know that his figures are controversial in concentrating only on the full-time aspect, but I understand that he wants to make a point. Would he accept that, even given those figures, it might be argued that the existing legislation and the existing framework have done all that they can in those 30-plus years and that something more is now needed to finish off the job? If the existing law was going to work, it would probably have worked by now.

John Penrose: I thank the hon. Gentleman for his intervention for two reasons. First, I was about to allude to his point of always having to be careful about using statistics. Anyone can make mistakes—the Secretary of State herself was picked up by Sir Michael Scholar, the head of the UK Statistics Authority, in a letter reported in The Daily Telegraph on 12 June in which he enjoined her to use the statistics rather more carefully than she had been doing. The hon. Gentleman is right to point out that we must be careful to define precisely to which statistics we are referring.

Secondly, on whether the existing measures are effectively spent or have run out of steam, we would need a significant period in which the steady decline of over 31 years went into reverse or flattened out. Certainly, until the end of 2006—the figures that I am quoting—the decline was pretty constant. One can look at the figures and say that they are not flattening out but coming down steadily. There are more recent figures—[Interruption] Perhaps the hon. Member for Hornsey and Wood Green will fill us in.

Lynne Featherstone (Hornsey and Wood Green) (LD): EHRC statistics show that only 17 per cent. of employers have completed an equal pay audit, and the number of employers conducting audits has increased by just 5 per cent. since 2005. Perhaps something about the very small number of those exposing the information is the reason for the slow-down.

John Penrose: I might have misunderstood what the hon. Lady was saying, but I was talking about the gender pay gap, not gender pay audits. The gap is, obviously, the thing that we are all trying to close; audits are one method by which people might try to close it. The number of people doing gender pay audits might have gone up or down in the past couple of years, but the important thing is whether the gap has continued to decrease. Based on ONS figures, the decrease has been relatively steady since 1978 or so. There was an initial dip and then a surge back upwards in the first couple of years, since when it has been, if not quite a straight line, as close to a straight line as statistics will come.

I do not want to overplay things. There is clearly more to do. There is an injustice, and I hope and expect that Members from all parties are determined to deal with it and close the gap, but it is none the less worth while to put some boundaries and numbers on the size of the problem that remains to be dealt with, because it is important. During this morning’s sitting, we discussed proportionality and whether the measures proposed in clause 73 on gender pay audits are a proportional way of achieving the benefit that we all want. It is therefore important for us to quantify the size of the prize at which we are all aiming.

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We alluded this morning to considering the different causes of the gender pay gap, but I wanted to give more detail and colour to the underlying reasons for the pay gap in this country, because it is clearly important to understand the enemy in order to conquer it. The Equal Opportunities Commission published “Modelling gender pay gaps” in 2004, and its findings were that a number of different factors underpin the pay gap. The document says:

“Gender differences in lifetime working patterns account for 36% of the pay gap.”

If the gap is currently 13 per cent., 36 per cent. of that is accounted for by gender differences in lifetime working patterns, which the EOC goes on to explain means that, on average, women work for fewer years than men in full-time employment and have more interruptions to employment for child care and other family care. That is understandable and perfectly reasonable, and provided that such decisions are taken on the basis of free will and individual choice, it is a facet of modern life. However, if some of those decisions are taken under societal pressures or because of an absence of adequate child care, for example, there may be some unfair systemic disadvantage for women. That is something that any Government of any stripe, I hope, would want to address.

It is interesting to note in passing that the kinds of thing that any Government would want to do to address such unfairness would revolve not necessarily around discrimination law but around social policy dealing with disadvantage. For example, the Government might try to ensure that more affordable child care is available for working women in particular, not just at the right price, but at the right times of day or night for those in shift work and on the right days of the week so that those whose jobs require them to work at weekends are not closed out of them, and so on.

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Prepared 24 June 2009