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. 4.15
pm
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 women’s 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
women who take primary responsibility for those children. Because of
that, it is women who take the time off and then have difficulty in
getting highly paid employment thereafter. Surely the biggest step that
could be taken to equalise men and women’s pay is for men to
start taking more responsibility for, and to take time off to have,
children. Does the hon. Gentleman agree that we should be changing
social policy and, possibly, legislation so that it is easier for men
to take paid time off work to look after
children?
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 society’s
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
society’s 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. Gentleman’s
party’s 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 men’s 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 party’s 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
care—unless 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 party’s
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.
Gentleman’s 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. Lady’s 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 Minister’s. 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.
Gentleman’s 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
on about this particular problem, which might still
take many years to fix. That is my answer to the hon. Gentleman: it
might still be worth while, but we must compare it with what else could
be done and assess the costs and burdens being imposed in order to
achieve this relatively small, but none the less potentially valuable
attack on
injustice. That
brings me to the Government’s 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 Government’s 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 me—and others, I
suspect—great 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 Bill—but 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. 4.30
pm
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
economy’s 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 that—magically—the
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
party’s 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
optimal assumptions about the way in which companies hold their data
that, frankly, are not believable. Their assumptions are not just a bit
unbelievable. I do not think that these numbers are wrong by a factor
of two, 10 or 100; I suspect that they are wrong by a factor of between
100 and 1,000—they are badly off beam. It is impossible to
envisage such a large, and therefore complicated, company needing half
a day’s work of a middle manager in the HR department, with
absolutely no input from anyone in the IT department. Apparently, such
input will not be required at all, and the middle manager’s work
will not be checked by anyone, even though it will subsequently be
crawled over by auditors, trade unionists and lawyers for the very
purpose to which the Minister has alluded: to check whether the company
can be sued or taken to court. 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 massively—not just a bit,
but massively—larger than the Government’s 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
issue—according to the Government, it clearly is, and we
agree—and if the Government’s 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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