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On Second Reading, I floated the thesis and, undeterred, tabled an amendment in Committee, and it was interesting when the Solicitor-General told the Committee that the Department for Work and Pensions was undertaking some survey work. At that point, she said that although she did not wish to tantalise the Committee, the first
showings suggested significant discrimination. I was quite excited by that, as it identifies a real problem; whether or not this new clause is the solution is a matter for discussion. If there is a big problem, however, the use of anonymous CVs will be simple, effective and cheap-resource non-intensive, which should please Conservative Members, because it does not cost anything and does not involve a cost to business.
Many benefits would flow from removing discrimination in the job market-opening up opportunities, spreading wealth, bringing about greater social cohesion and economic efficiency, from which we all benefit. The Mail on Sunday obviously got the wrong end of the stick about what the Government were doing when it said that the City was very upset. Excuse me, but undertaking research into an issue to establish whether a change in the law is required sounds pretty sensible to me and I commend the Government and the Department for Work and Pensions for undertaking it, especially when it is on such an important issue as discrimination in employment practices. A smart employer would also know that the depth of scientific research backs up what the new clause is designed to achieve.
I am very encouraged that this research has been carried out and I very much hope that the Solicitor-General will elaborate on the findings, which I understand showed clear discrimination based on name alone. People say "What's in a name?" and I think the answer is "Quite a lot." I greatly hope that the Government will support new clause 11. I will listen carefully to the Solicitor-General before I decide whether to test the will of the House, as she may wish to say more and propose that more work needs to be done.
On the gender pay gap, which I believe is an extremely important issue, I do not think that there is a million miles between the Government and the Liberal Democrats other than about the degree to which we wish to see change and perhaps over the Government's belief that another four years of voluntary disclosure will work. The Liberal Democrats do not believe that it will. I was concerned and upset again, as I was in Committee, to hear the hon. Member for Weston-super-Mare (John Penrose) arguing in a way that suggested he wanted to minimise the effect of what we are seeking to do by closing the gender pay gap. Good Lord- [Interruption.] The hon. Gentleman shakes his head, but the whole manner in which he put the case seemed to suggest that he was saying, "Well, basically women have children, so we kind of have to understand that that puts them outside the workplace." [Interruption.] That is what it felt like as I sat listening to the hon. Gentleman, and these are arguments that women have heard for many decades. What he said seemed to have those echoes and tones.
John Penrose: That was emphatically not what I was saying and it was not the intention of my remarks or the impression that I wanted to convey. What I was trying to say was that this is a crucial and pernicious problem that has persisted for a long time, albeit improving at a very slow rate, so that we needed to target what we do about it appropriately. Different parts of the gender pay gap, which is caused by different things, require different public policy responses. My argument was that this particular public policy response is a comparatively expensive way of focusing on a very small part of the problem when we would do better to focus on all the other bits, which would reduce the gap much faster.
Lynne Featherstone: I totally disagree because the message and intention behind disclosure would affect all areas in which women find themselves discriminated against; it does not pertain only to the market share of this problem, which the hon. Gentleman sees as so minimal and I see as so great.
A series of Liberal Democrat new clauses are designed to deal with the issue of equal pay for women-involving mandatory pay audits, representative action, hypothetical comparators and defence of material factors. The issue is so important, which is why I am so pleased to debate this group of amending provisions on the Floor of the House. As the hon. Member for North Ayrshire and Arran (Ms Clark) made so clear, it would be unforgiveable if women in this country did not secure the laws they need to bring about change to a disgraceful situation that has applied for nearly 40 years since the Equal Pay Act 1970.
I am pleased that the hon. Lady tabled new clause 33, which is identical to the Liberal Democrat new clause 3 other than in respect of the numbers for the mandatory pay audit to kick in-100 for us, as opposed to 21. We based our figure of 100 on the pre-evidence submissions-by the Women's Commission, I believe. We view 100 as providing a reasonable level at which companies could operate without enormous expense. Quite frankly, we do not believe that the expense will be enormous at all, although the hon. Member for Weston-super-Mare seems to think that it is prohibitive.
It was clear to me in Committee that there was a great deal of support among both Labour and Liberal Democrat Members for mandatory pay audits. New clause 3 revisits the issue, and I shall be seeking to test the will of the House in relation to it. Mandatory pay audits are important in that they expose overall patterns of pay-although not individual salaries-to public scrutiny. The new clause would ensure that, at last, pay discrimination had nowhere to hide.
Where we differ with the Government is on the question of whether audits should be voluntary or mandatory. Opponents of equal pay measures often argue that there can be no discrimination in the marketplace because that is the point of a market: firms that discriminate will be worse off. However, when an opportunity was provided to strengthen market pressures by ensuring that pay scales were disclosed-to give the market more information, which is what free-market theorists tells us that it needs-where were those people? They backed off as fast as they could, making themselves scarce.
Mandatory pay audits are supported by Unison and the Fawcett Society. The problem with the Government's proposal is that it only suggests that information be published voluntarily until at least the year 2013. As has already been pointed out, the Equal Pay Act was passed 39 years ago, but according to the latest figures that I have from the Office for National Statistics, women are still paid 17 per cent. less than men.
We should bear in mind that the Equal Pay Act was sparked by the gender pay gap. For every pound that men were paid at Ford's Dagenham car plant, women earned only 85p. On 7 June 1968 the women went on strike, but it was only when they were joined by the women and the men at the Ford's Liverpool plant that
the company caved in and the Equal Pay Act was spawned. The point that I am making is that it takes both sexes to make the change.
Philip Davies: The hon. Lady is making her case powerfully, as she always does. She said that she was concerned about the gender pay gap. According to the Office for National Statistics, although among full-time workers women are paid less than men, among part-time workers they are paid more than men. Is the hon. Lady as concerned about the fact that men are paid less than women in part-time work as she is about the fact that women are paid less than men in full-time work, or is she bothered about only one side of the equation?
The problem is that a law that was intended, in the best possible way, to change women's prospects for ever has not been effective. It is extraordinary to note that that is the case at both ends of the market. The Equality and Human Rights Commission has done a great deal of work in studying the pay gap in the financial sector. Admittedly, those in that sector probably receive far less sympathy from Members than those in the low-paid sector.
Last year, the highest-paid female director of a company in the FTSE 100 took home £3.8 million. That figure, however, is dwarfed by the amount received by the highest-paid man, who took home a disgusting-if the House will excuse the word-£36.8 million, almost 10 times as much. Lest Members are in any doubt, I should make clear that I think such pay levels are insane, but the point is that from the highest earners to the lowest, women get a raw deal. It is as tragic as it is shameful that such gaps remain nearly 40 years after the passing of the Equal Pay Act.
Apart from the fact that the Government's proposals for voluntary publication applied to firms with more than 250 employees, what was made clear in Committee was that they were working with the CBI, the trade unions and the Equality and Human Rights Commission to establish a single figure, or a small number of figures, according to which it could be judged from year to year whether a firm was making progress in reducing a gender pay gap. I do not know the magic number, or metric, that they agreed to adopt. I had hoped to have that information before the debate, but I do not have it, so I hope that the Solicitor-General will be able to tell us more. In any event, however, if it has been decided that that is how to monitor companies' progress in closing the pay gap, I consider the decision misguided, because it will not deliver real change.
I can see the attraction, in terms of monitoring, of establishing a single figure or small number of figures according to which a company could be judged from
year to year. The magic figure, or figures, might help the Equality and Human Rights Commission, if that is the body that will have to judge whether a company is closing the gap, but it will not do what the Liberal Democrats consider to be one of the most important things that disclosure can do. It will not put power into the hands of individuals by enabling them to discover whether they are being discriminated against.
If the company for which a person works publishes its pay scales, the result-apart from public opprobrium-will be that that individual can establish whether he or she is being subjected to discrimination, and can then take his or her case to a tribunal. Someone who does not know whether he or she is being discriminated against will not have that power. Unfortunately, although the Government's proposed measure will help by allowing the monitoring commission to check on the overall pattern, it will not empower the individual.
As was pointed out by the hon. Member for North Ayrshire and Arran, an important aspect of mandatory pay auditing is that it puts a value on the different kinds of job held by men and women. Rather than proposing a measure that is good but not good enough, my colleagues and I are suggesting that firms that are reasonably sized or larger-100 employees seems an appropriate cut-off point-should be subject to mandatory auditing so that women, and indeed men, can see for themselves whether they are being discriminated against, and can make a claim if necessary. We as Members of Parliament should understand the power of transparency when it comes to publication. It has a very salutary effect.
New clause 4 concerns representative actions. Currently, if I believed that I was being discriminated against in terms of pay, I could take my claim to an employment tribunal. As I have already said, the ability to see for themselves whether they are being discriminated against will put power into individuals' hands. However, an individual has to be quite brave and assertive to proceed with a claim, and the resources for tribunals are so inadequate that there is currently a backlog of cases. Women are waiting and waiting and waiting. According to evidence provided by the Fawcett Society, thousands of women are waiting for justice, and some have died while waiting.
The aim of representative action is to speed up justice, to take the pressure off individuals, and to protect the system from breakdown and expense. Individuals could be represented by trade unions or, indeed, by the Equality and Human Rights Commission, which ought to be able to act on behalf of a group of people who find themselves in roughly the same position and bringing the same kind of action.
John Mason: Does the hon. Lady agree that such a measure could have helped to solve local authority pay problems? It has taken many years for women doing jobs equivalent to those of men in local authorities in, I think, both Scotland and England and Wales to secure equal pay.
Philip Davies: I admire the sense of humour that the hon. Lady has shown in asking the Equality and Human Rights Commission to take up cases of this kind. The commission itself pays men more than women, white people more than members of ethnic minorities and non-disabled people more than disabled people, and its performance this year in respect of the last two categories has been worse than its performance last year. Is it not ludicrous that an organisation that cannot even do things properly itself should take up such cases-or does the hon. Lady expect it to take up cases against itself?
Lynne Featherstone: Well, the unions could help the Equality and Human Rights Commission out of its current difficulties. It does not matter which organisation is failing; where any organisation is failing, including the Equality and Human Rights Commission, it should be brought to book. The answer to this problem is simple: representative actions should be allowed, so that one action can cover and settle many others. [Interruption.] Yes, I suppose people could join a union.
In respect of an amendment I had tabled, what happened in Committee was interesting. When a similar one was tabled by a Labour Back Bencher, the Solicitor-General's manner and attitude softened. She is always delightful and accommodating of course, but she said that the Government hoped to be able to respond early in the autumn following the conclusion of some work that was being done by the Ministry of Justice on whether representative actions should come into play in tribunals. She also said that if they could not do so in time for Report stage in this House, they would seek to introduce such provision when the Bill was being considered in the other place. I therefore hope that the Solicitor-General will be able to inform us that progress has been made on this issue, and that the Government will either support our amendment or are committed to its inclusion in the Lords.
The third of the series of issues to do with women's pay is very serious. New clause 5 is about the hypothetical comparator-that is a bit of a mouthful, but, after three stages of the Bill, I can now say it fairly easily. The provision is intended to enhance a woman's ability to bring a successful case. At present, when a woman pursues an unequal pay case, she is legally required to provide a real comparator in respect of her salary. If she wants to prove sex discrimination in pay, she has to be able to give a concrete example of a man in a comparable job being paid more.
Often, however, that comparator simply does not exist. Many people do jobs where there is no one else, and especially no one of the opposite gender, in a comparable role. Such comparisons can therefore be difficult to provide. Furthermore, a higher bar is set for proving sex discrimination in pay differentials than for other forms of discrimination. There is no requirement to provide a real comparator in race or disability cases. In many other countries, a hypothetical comparator is allowed, and the TUC, the Fawcett Society and the Women's National Commission say that the legal hurdle has proved to be a major obstacle where a real comparator does not exist, such as for areas of employment where the work force are almost entirely female.
We know that women's work is often undervalued and underpaid-that is the case for cleaners, hairdressers, carers, dinner ladies and many others-but it can be impossible to prove that, because it is impossible to provide a real comparator. Our amendment follows the lead of many other countries that allow a hypothetical comparator. I do not understand why the Government are resisting this proposal. It simply offers the same protection from discrimination for this strand of inequality as for others; it would set the bar for women fighting against pay discrimination at the same height as the bar for those fighting other forms of inequality.
David Howarth (Cambridge) (LD): The situation is even more extraordinary than that, because even for other aspects of sex discrimination-sex discrimination that does not involve pay-there is no need for a real comparator.
Lynne Featherstone: We would do that in the same way as we would do it for any other purpose: we would evaluate it, audit it and make an assumption about it. The hypothetical question would be: what if a man were to do this job?
New clause 6 addresses defence of the material factor. Although it is important, I shall discuss it only very briefly, as it is about a legal and highly technical point on which we do not seek to divide the House. The new clause would prevent an employer from using a spurious reason to justify discrimination and thereby avoid the obligations under the Bill.
Finally, I wish to point out that we will be supporting a few new clauses and amendments tabled by Labour Back Benchers, such as that on mariners. We think that abolishing the exemption in respect of the minimum wage is particularly important. We wish to show our support for that. We cannot understand how discriminating by having two different levels of minimum wage can be right. Why will the Bill not change that? We will support that Labour Back-Bench amendment. [Interruption.] The hon. Member for Shipley (Philip Davies) asks from the Tory Back Benches whether we will support any of his amendments; I have to tell him that we will not.
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