The Solicitor-General: This is very interesting, but I hope that the hon. Gentleman will not overlook the part-time element. All his figures so far have related only to full-time hourly rates, and even they are a bit controversial. Does not the difficulty lie in the fact that this is not really about the element of free will? When women who have stopped working to have children want to go back, the calibre of work available to them part-time is very low, as a rule. It does not spread across many areas of work, and the jobs are low-paid. Yes, it is natural for women to have children, and they may choose to do so, but the consequence ought not to be that only low-paid work is available to them. There is a job to be done through discrimination legislation in that field as well.
John Penrose: I thank the Minister for her intervention, because that brings me to some other causes of the gender pay gap. She is right that womens penetration of different parts of the employment market varies widely. For example, it is sadly true that women are under-represented in some of the more senior ranks of the private sector. The question is how we deal with that.
Emily Thornberry (Islington, South and Finsbury) (Lab): The elephant in the corner of this Committee Room is that men and women have children, but it is
John Penrose: I thank the hon. Lady for her intervention, which illustrates the point that I am trying to make. She is right to say that the syndrome that she is describing is one of the root causes of the inequality that we see. That is a question of societys attitudes, tradition and, as she rightly points out, the way in which legislation is set up and the way in which companies approach maternity and paternity leave.
The Conservative party has produced some proposals to try to reduce the mismatch between those two sets of leave. Even if the hon. Lady and I do not necessarily agree on those, it is none the less true that it would be far better to make sure that men are not just able to take a more equal share of child care, but that the system is arranged in such a way that it makes it simpler for them to do so. However, even if the Minister had a magic wand that she could wave to change that tomorrow, we would still have the issue of free will, free choice and societys attitudes. It would be wrong for all of us in this room to dictate to parents how to allocate the child care responsibilities within their family unit. None the less, it is vital that we create an environment where it is possible for the burdens and tasks to be shared more equally.
Emily Thornberry: Is it therefore the hon. Gentlemans partys policy to increase the amount of paid leave for fathers?
John Penrose: I do not think that it is. I think that there are other ways out of the particular inequality conundrum than just levelling mens paid leave.
Mr. Mark Harper (Forest of Dean) (Con): The hon. Member for Islington, South and Finsbury makes a good point. Indeed, earlier in our discussions we made that very point when we tabled a probing amendment about the maternity clauses and asked why they did not address paternity. Looking forward to this part of the debate, I made the point that, if men and women took a more even role in child care, that, in itself, would help the cause of closing the gender pay gap and giving women more opportunities.
On the specific question that the hon. Lady raises, we have published proposals to look at allowing maternity leave to be equally shared between either parent so that we encourage both fathers and mothers to share child care more equitably, without increasing the overall burden on businesses.
John Penrose: I thank my hon. Friend for filling in the policy details since he is our Front-Bench spokesman on the issue. I hope that that has clarified an alternative way of dealing with the real problem that the hon. Lady describes.
Emily Thornberry: Is the issue pay? Is it Conservative party policy to pay men to look after children and to increase that allowance? That is my point.
John Penrose: I am happy to inform the hon. Lady that that is not the Conservative partys point of view at the moment, but we will continue to roll out policies between now and the general election, whenever it is called.
The Solicitor-General: The hon. Gentleman can see the problem, can he not? If there is unequal pay, and I accept that there is, it will not be the higher paid person who takes time off for child careunless we pay them to do so.
John Penrose: The point that I am driving at is that we are all trying to attain some equality between the sexes. None of us has the answer to perfect equality, and there is a balance to be struck, particularly at a time of national recession when jobs are hard to come by, between equality and trying to ensure that we do not increase the total burden on employers.
Yes, it is an important matter and it needs to be pushed forward. My party has come up with some proposals, but I hope that the hon. Member for Islington, South and Finsbury will agree that she is supporting the original matter to which I alluded, which is that many causes of the gender pay gap are outside the question of discrimination by employers. Her example is a good one. The solutions are to do with flexible working and the balance between maternity and paternity leave rather than discrimination law.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab): Does the hon. Gentleman not understand? It is gratifying to hear a Conservative MP talking almost like a feminist. We all appreciate that discrimination is rooted in the structure of society and its various cultural, social, political and economic aspects. Some of us have been fighting and campaigning against it for years and have tried to seek improvements. Does he not understand that it is the same old same old? Frankly, pigs will fly before we hear of any positive action from his party on how the overall problem should be solved. We want the solution to equal pay now, not in another 30 years time.
John Penrose: I was about to thank the hon. Lady for calling me a feminist. I would have been delighted to be described as such, but she rather spoiled it by having a go at the rest of my partys policies. I thank her for the first part of her intervention, but not the second.
Is it not clear that the causes of the gender pay gap are far more complex and nuanced than we shall be able to explore this afternoon? This morning, we alluded briefly to the third tranche of the gender pay gap, mentioned in the study by the EOC, which is the famous 38 per cent.the other factors associated with being female. In other words, 38 per cent. of 13 per cent. of the gap is associated with other factors. That includes direct discrimination, differences in labour market motivation and the preferences of women compared to those of men. As the Minister said this morning, some of that will be attributable to indirect discrimination or systematic disadvantage.
It is worth pausing to consider systematic disadvantage. It can hide a huge variety of things. It can hide differences in education and it can hide differences in child care, something that has already been mentioned. It can hide differences in language and it can hide differences in aspirations and expectations. All the reasons why women are not able to be as successful in business as men are subtle, slippery and hard to change, but they are all real.
Lynne Featherstone: I am interested in the hon. Gentlemans argument. Undoubtedly a great number of factors play a part, but why should that prevent the hon. Gentleman from wanting to address the factor that is discrimination?
John Penrose: The hon. Lady leads me nicely to my next point. This morning, the Minister said that we do not know what proportion of the gender pay gap is due to direct or indirect discrimination. We all have our suspicions, but we know that it is less than 38 per cent. of the 13 per cent., as the 38 per cent. includes direct and indirect discrimination plus the other factors that I have described. It must therefore be a sub-set of that 38 per cent. In other words, at the absolute most, it cannot be any more than about 6 per cent. or 7 per cent. Conceivably, it could be only 2 per cent. or 3 per cent. That would place a significant set of parameters around the size of the problem to be addressed as a result of the gender pay audits.
To come to the hon. Ladys specific point, it is important that we acknowledge that gender pay audits might have a place. As we discussed this morning, my own party agrees on that point. Ours would be a narrower application than hers or the Ministers. None the less we agree that they might have a place, in some cases. We are arguing for a narrower application because the size of the prize is much smaller than anyone has had a chance to illustrate in our conversations thus far. Even if the size of the prize is only 3 to 6 per cent., however, it could still be tremendously worth while.
John Mason (Glasgow, East) (SNP): I appreciate the hon. Gentlemans point. However, much of the Budget is also fixed annually, and only a small part of it can be changed. Presumably, he agrees that it is still worth while putting forward a Budget. By his logic, however, if only a small percentage is affected, we should not do anything.
John Penrose: Again, the hon. Gentleman leads me on nicely to my next point. Even if the size of the prize is only 3 to 6 per cent., it might still be worth while. I think that we all agree that the injustice of the gender pay gap needs fixing. The question is not, therefore, whether it is worth doing, but how we do it, how much it will cost and whether other parts of the gender pay gap can be addressed faster and for less cost. Should we be focusing our fire on that area first, or more strongly? Should we do that as well as other things or instead of other things?
It might very well be that we can get rid of half of the remaining gender pay gap by making other changes, such as better child care, which we have discussed already. We could fix half of the gender pay gap quickly by doing those sorts of things, rather than by banging
That brings me to the Governments figures in the impact assessment, which attempt to put a size on the financial burden of achieving this relatively small but potentially important reduction in the gender pay gap. We discussed that point briefly this morning, but I want to spend a bit more time on it now. For the purposes of this conversation, I shall ignore the Governments figures on getting to grips with the legislation, which come under a different part of the impact assessment, because those costs will apply to a much wider range of clauses.
I shall focus on the one-off and annually recurring implementation costs, which the Government have calculated. They caused meand others, I suspectgreat concern. Just how widely did the Government check and consult on those figures before they were published? I ask because a number of business groups have told us that they were assured just one week before the Bill was published that clause 73 would not appear in the Bill at all. They said that they had been assured, informally, that gender pay audits were not part of the draft Billbut one week later, up they popped.
The Solicitor-General: This is not a gender pay audit. Does the hon. Gentleman not know the difference between a gender pay audit and transparency? There are no gender pay audits in the Bill. I challenge him to find one.
John Penrose: Annexe M of the impact assessment is entitled Gender pay gap reporting in the private sector. I apologise if I have been using the wrong technical term, but I think that what I was driving at was very clear. My concern is this: by definition, these companies are large, are at the top end of our economys employers and have more than 250 employees. However, the one-off implementation cost for one of those large organisations to come up with a satisfactory report on the gender pay gap is assessed at £92.24 per organisation. After thatmagicallythe cost per company each year is assessed at £15.38. If that was true, it would go a long way towards dissolving and salving my partys concerns about the clause, but I am afraid that it really does not pass the sniff test.
We are gravely concerned that the figures are not worth the paper they are written on, so may I ask the Minister, please, to give us substantially more detail on how they have been calculated? From what I can see, the Government have assumed that it takes one middle manager in the human resources department a total of half a day to get everything done to prepare for reporting on gender pay gaps in that organisation for ever. After that, it takes the same middle manager 30 minutes a year to deal with the report.
In such a large company there will be different divisions, legacy software systems and data that are not held in the right way. The Government have made a series of
It is inconceivable that the work will not be done with great care and that it will not require a great deal of IT input for at least a large proportion of the companies required to fulfil it. It is also inconceivable that when the work has been done, it will not be checked by everyone right up to, and probably including, the entire board of directors, given the severity of the issue that we are talking about. Therefore, the costs are liable to be massivelynot just a bit, but massivelylarger than the Governments estimates, and that is the concern. If the costs were genuinely so low, it would be easier for everyone to say, This is a relatively cost-free, straightforward thing that we shall all get on and do. However, given that the size of the opportunity that we are aiming at is much smaller than we have ever had a chance to discuss until just now, and given that I fear the costs are much larger than those illustrated in the impact statement, I am afraid that the calculations start to come out the wrong way round, and that is the reason why Great Britain plc is so concerned.
Our new clause is designed to illustrate a point. It takes existing clause 73 and applies it not as a gender pay reporting mechanism, but as a disability pay reporting mechanism. If this is such an important issueaccording to the Government, it clearly is, and we agreeand if the Governments proposal is the right way to deal with it, why are we doing it only for gender pay reporting? Why are we not doing it for many other strands, such as disability, which is the one that we picked because it is a good example?
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