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To be published as HC 754-vi

House of COMMONS



Business, Innovation and Skills Committee

Women in the Workplace

Tuesday 15 January 2013

Ruby McGregor-Smith CBE, Fiona Woolf CBE and Eddie Gray

Rt Hon Maria Miller MP and Jo Swinson MP

Evidence heard in Public Questions 403 497



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Oral Evidence

Taken before the Business, Innovation and Skills Committee

on Tuesday 15 January 2013

Members present:

Mr Adrian Bailey (Chair)

Paul Blomfield

Mike Crockart

Caroline Dinenage

Rebecca Harris

Ann McKechin

Mr Robin Walker

Nadhim Zahawi


Examination of Witnesses

Witnesses: Ruby McGregor-Smith CBE, Chair, Fiona Woolf CBE and Eddie Gray, Women’s Business Council, gave evidence.

Q403 Chair: Can I start by welcoming you and thanking you for agreeing to give evidence to the Committee? I was going to say that some of the questions will be person-specific. I think most of them are pretty general, but please do not feel that you all have to answer every question if somebody has said something that you agree with. Do feel free to add to or subtract from what somebody else has said if you feel that you have a specific contribution that you need to make on any question.

If you would just like to introduce yourselves for voice transcription purposes, that would be helpful, starting with Eddie Gray.

Eddie Gray: Yes, my name is Eddie Gray, and I am a member of the Women’s Business Council and also a member of the board of Opportunity Now.

Ruby McGregor-Smith: I am Ruby McGregorSmith, the Chair of the Women’s Business Council and Chief Executive of MITIE Group plc.

Fiona Woolf: I am Fiona Woolf. I am a member of the Women’s Business Council and I am a partner with CMS Cameron McKenna in the City.

Q404 Chair: Thank you very much. I will start with a fairly general question. Why was the Women’s Business Council set up? Can you very briefly summarise the progress you have made on your brief to date?

Ruby McGregor-Smith: The Women’s Business Council was set up last summer to look at recommendations on how women can make a more positive contribution to the economic value of the UK in their whole life cycle, from when they are very young through to later in their careers. Our progress to date is that we are about to finalise our recommendations, which will be reported in June or July this year more widely.

There are four key areas in which we are working. The first is around looking at broadening the choices for school-age girls and young women. We are really looking there at career choices and what young girls today want to work on or not work on.

Chair: Could you just speak up slightly? The acoustics are not very good in this room.

Ruby McGregor-Smith: The second area is unblocking the talent pipeline, which is about looking at what stops women progressing their careers, and looking at childcare, benefits and more flexible working. We are also looking at supporting older women who, at a later stage of their career, have more caring responsibilities and how they can then also potentially reskill to come back into the workplace. Finally, we are promoting enterprise through the whole life cycle of a female. Those are the four key areas.

Q405 Chair: What support have you had from the Government in terms of research and backing on the work that you have done so far?

Ruby McGregor-Smith: We have asked for quite extensive support. Some of the team here today are from Government. There are a number of people working on the initiative with us, because what we are very interested in is having an evidencebased report. I have some of the evidence that we have produced so far internally that we are happy to share with the Select Committee.

Q406 Chair: Do you have any staff seconded to you at all?

Ruby McGregor-Smith: We have a number of people working on this, but they also have other responsibilities.

Q407 Chair: Which department are they from?

Ruby McGregor-Smith: The Government Equalities Office. They are working now for Maria Miller.

Q408 Chair: This is another broad question. You have touched on it in your summary of what you are researching. What do you see as the main areas that prevent women from achieving their economic potential?

Ruby McGregor-Smith: This is split into different parts. You need to look at age. For young girls today, it is very much about aspirations, career choices and what they believe they can do when they are at school and what they are told they are actually capable of. It is about how you actually improve aspirations at school for young girls today. Moving on to-

Fiona Woolf: Can I just jump in, before you move on to the next stage? We are detecting some significant gender stereotyping that is interfering with the aspirations of girls, particularly in what we call the STEM subjects-science, technology, engineering and maths. There is a particular curiosity as to why girls do not wind up in IT.

Q409 Chair: Before I come back to you, could you just elaborate on that? We did have a specific session covering this particular area. I want to see if your perspective reflects that which we had before the Committee. You said "gender stereotyping". What evidence do you have that demonstrates that girls who may have both the aptitude and inclination to take STEM subjects do not as a result of other factors?

Fiona Woolf: You will see some surveys and you will see what the literature has from our evidence papers. We have spoken to careeradvisory services, both in school and also one called Plotr, which is in the course of creation and is, if you like, a joint venture between the public and private sectors.

This is my own personal view. They had not really thought about the fact that they needed to take some myths out about engineering subjects or IT being a suitable place for girls to aspire to. It was more what was not going on and the lack of evidence of thinking there that struck us that this was an area we ought to explore further.

Eddie Gray: It is a complex area, as you will have seen from the evidence that we have submitted to the Committee. Often, it is a mixture of quite deeply held cultural limitations that the girls themselves-or indeed their families, as some of the evidence suggests-impose as they are making critical choices about which subjects to study at relatively young ages.

What is also important-and which may well also lead to the potential for recommendations, of course-is that the activities that influence girls in the system, careers advice and so on, are not tackling those headon enough and presenting options and challenges to girls. They are rather accepting that, as long as there is progress in a girl’s academic career and they are moving on to university, it does not matter whether it is a STEM subject or not.

There is evidence to suggest it is operating from both sides, but the evidence does point to it being quite a complex subject.

Q410 Chair: I just want to pursue this a little bit further. Is this the fault of the schools and the attitudes of the teachers? Is this the fault of the careers service? Finally, are the changes that the Government is recommending for the careers service taking this on board and likely to tackle it? Do any of you have any views on that?

Ruby McGregor-Smith: I have got some quite strong views about this. There is no joinedup approach to careers advice in schools in the UK that is linked to business-at all.

If we are serious about raising the aspirations of young people-this is a genderneutral comment-and making them incredibly focused on what their career can be, there is very limited practical application or joinedup behaviour between careers services, the Department for Education and business. That needs to change, because kids are not coming out of college work-ready. I think this is a fundamental change that we need to make. It is not that difficult to make, as well. There are a number of recommendations coming out in our paper about things that can be done to make things a lot simpler.

However, the point around raising the aspirations of women and young girls at school is partly a confidence issue. It is getting them to believe that they can use their capabilities in the way a boy can. There is a lot of research on this, which talks about confidence holding women back at every stage of their career, which absolutely needs to be tackled earlier on. It is also self-belief. If you were to join those things up, you could massively change the way things are.

Q411 Chair: You have moved into the next area I was going to ask about. Can this change be by legislation or, if not, what do the Government need to do to change their policies to alter this?

Ruby McGregor-Smith: I think you can change it by legislation. We need a joined-up careers advice. I am not suggesting that we set up another organisation that does all of this, but we need a joinedup careers service. It should be wider than a careers service. Calling it "Careers and Aspirations for Young People" would go a long way towards beginning to solve this-particularly in this economic environment. Every school, as opposed to focusing on what universities they send their kids to and what league tables they join, could focus on making them workready. Beginning to change that is the message.

Business would be hugely supportive of that. Everyone on the Women’s Business Council has a business background. We are hugely passionate about getting young people into work. Young girls need that support.

Q412 Ann McKechin: We have been talking about this problem for a long number of years. I had a look at the apprenticeship figures and data. Over the last 10 years, if you look at apprenticeships in construction, electrotechnical, plumbing or IT, they have flatlined. The low participation of women has remained utterly constant for the last 10 years.

You have mentioned the areas of careers advice and, obviously, trying to change the opinions of young girls. I do not disagree with you. However, you only seem to have looked at it from one side. We spend, as taxpayers, a lot of money on apprenticeships and training. We could produce a financial incentive to employers, saying, "If you want a slice of the budget, you will have to recruit more women and make that a target."

I do not necessarily see companies or employers coming out to look for women in some of these trades and occupations. Do you think there is some way we could try to incentivise the industry?

Ruby McGregor-Smith: My organisation is one of the largest apprentice employers in the UK. I would say that this is changing. The statistics may show that it is flatlining, but it is the kids who want to come out. My point is around raising aspirations and getting young girls-particularly those in the STEM subjects-to take this on. For example, in engineering, why do we not see more engineers coming through? It is a tough environment still. You are asking girls to join organisations where 90% of the apprentices are male. That is maybe not the best environment for them.

I do not think it is about financial incentives to business; if we are really serious about changing it, we should ask why, when they go to university to do engineering, they do not carry on with engineering. A lot of the girls go into consulting. The first thing that happens, if you are an engineer, is that the accounting firms will be the first to come and try to get you to go into consulting as opposed to staying in engineering. It is not, still today, the most attractive job for many women. That will change over time.

Q413 Ann McKechin: Perhaps I can press you a little bit further on that. If I were looking at a job as an electrician or a plumber, how many of those mostly SMEsector companies offer parttime jobs or flexible working? In other sectors it is more common.

If you are a young girl, you might be thinking, "At one stage I might perhaps start having a family; I am going to need more flexibility in my work. I am going into a sector where I cannot see any sign of that occurring and it is"-as you say-"an understandably very maleorientated perspective." There has to be some change in business as well, would you not agree?

Ruby McGregor-Smith: Yes, but there is; we are making some big recommendations about flexible working as well to help that point. We had had a big question asked at the Council about what flexible and fulltime working are. Does everybody not just have a job? It is set within a number of hours as opposed to, "You must be in the office, Monday to Friday, doing the following things."

There is a huge amount of work the HR communities in businesses can do to change that, but that is a partly cultural point.

Eddie Gray: As Ruby has said, the whole issue of flexibility will be a key part of the Women’s Business Council recommendations. I would pose a question as to whether it is the critical issue in the specific instance you are raising here. What evidence there is tends to suggest that most girls in the 18 to 20 age range are not applying for these things. It is not so much the issue of forwardthinking about flexibility, which only tends to come in as they get slightly older, that stops them doing that.

There does seem to be-either as a function of the educational choices they have made or some cultural belief-an idea that this is just not for them, which is a greater barrier to that. The evidence is not definitive, so I accept up front that there is an element of anecdote to this. However, so far, on the basis of what we have seen, the issue of flexibility tends to come into people’s considerations slightly later, rather than when making that first choice, where it is rather more biased by what they have studied, what they feel they are good at and what they feel is right for them or not.

Q414 Nadhim Zahawi: I have a question on the Council. After you report in May, will you be disbanded? What will happen after that?

Ruby McGregor-Smith: I have been asked to chair it for the first 12 months. It will be up for review then. That is really down to what Maria Miller would like to do with it going forward. Our view is very much that we will come out with some really powerful recommendations.

We would love to be able to come back and report against those next year, because it is really important to make sure that the recommendations we come up with for business are embedded into the way organisations want to work. We want to see some of this embedded into legislation. There are a number of recommendations coming out that we would like to see in legislation and that we are very passionate about.

Q415 Nadhim Zahawi: What, then, is your remit?

Ruby McGregor-Smith: It is 12 months.

Nadhim Zahawi: That is for you. What happens to the actual Council itself?

Ruby McGregor-Smith: The Council is for 12 months, at the moment. We are coming out with key recommendations and then a review of what we should do with it.

Nadhim Zahawi: There is no decision as to whether it disbands or carries on?

Ruby McGregor-Smith: No. No decision has been made yet.

Fiona Woolf: Although it is fair to say that we are being tasked with delivering the messages from the Women’s Business Council for quite a period of time after May.

Ruby McGregor-Smith: We are.

Q416 Nadhim Zahawi: What is your plan? How are you going to do that?

Ruby McGregor-Smith: We are coming up with the final recommendations now, which will be ready by the end of February. Those will hopefully then be agreed by those that need to agree them in Government. Then we will look to launch those formally in May or June. There will be a twoweek launch programme to talk to all interested parties about that. There is quite a lot of detail behind that.

These are very powerful business recommendations, and what we are very much hoping is that you will see some of what we are saying already beginning to come out. For example, we have already come up with some initial recommendations around childcare benefits and flexible working, which we think are already beginning to be listened to.

Q417 Nadhim Zahawi: Out of interest, what kind of support do you have, in terms of the Council itself? I mean administrative support.

Ruby McGregor-Smith: Administrative support is done by the Government Equalities Office. We have a team working with us there.

Q418 Nadhim Zahawi: Is there nothing from business?

Ruby McGregor-Smith: From business there are 10 people on the Council. We are all offering some individual support as well where necessary. For example, where we want to go away and look at specific studies on things like flexible working, in the evidence papers there is a lot of different evidence and case studies from different companies about what they have done.

Q419 Nadhim Zahawi: Who pulls that together?

Ruby McGregor-Smith: That is being pulled together by the Government team.

Q420 Nadhim Zahawi: Moving on to the Equalities and Human Rights Commission, what are your views on their work? You might not have a view at all.

Ruby McGregor-Smith: I do not have any strong views.

Eddie Gray: I have had little interaction. In terms of the Women’s Business Council and its current agenda, we have started to identify in the later stages of careers an emerging issue around care, particularly for older relatives. I do know that they have just made recommendations-which, I must admit, I have not had a chance to study in any great detail-about quality of care at home, which is likely to be of interest to us as we look at our recommendations in that area. At the moment, that is the only specific area of clear overlap that I have been able to notice. I have to be honest: I have not yet seen the detail of it.

Q421 Mr Walker: Given what you have just said about the EHRC, we have heard some evidence that budget cuts to the EHRC are likely to make a big difference. What would you feel is going to make more of a difference to the chances of women and girls pursuing the careers that they want to be able to achieve?

Ruby McGregor-Smith: I think it is important that the recommendations we come out with this summer are listened to. As many business leaders, we have a lot of evidence to talk about what business needs going forward in this economic environment. What we have to do for young girls today is make them ready to work in a different economic world. I hope that they will be taken very seriously. It is difficult for us to comment on cuts to other organisations.

Eddie Gray: I would be very hopeful that the Chancellor would pay a great deal of attention to the Women’s Business Council. Part of the reason I said yes to being a part of the Council was its focus on the economic potential and the idea that there was lost opportunity for the country here. You will see when the report finally comes out that it is structured to identify from the evidence base those critical stages of a woman’s life when we are either losing significant opportunities and the potential to contribute to economic growth or we are losing it from the system completely.

We are trying to strip away everything else and concentrate on those key moments in a woman’s working life and the choices that she makes. That, to me, seems like a very relevant agenda if you are a Chancellor. I would personally be very disappointed if he is not very interested in what we have to say.

Q422 Mr Walker: You have all come into this bringing your experience of business and working in the private sector to the Women’s Business Council. Has the process of working on the issues changed your attitude or improved your understanding of what the role of the public sector is in dealing with these issues?

Ruby McGregor-Smith: For me, I would say that I have had a really positive experience of working with the people I have worked with in Government. There is a huge amount of talent, it has been used really effectively in this area and could be utilised even more. I am pretty impressed.

Fiona Woolf: If I may, I think you need to understand that the Women’s Business Council is not just looking at what Government can do. It is very much looking at what business can do and, also, the women and girls themselves. We will be confronting a lot of the unconscious things that are going on. We talked about the culture, but there is unconscious bias going on. We have been talking about the entry level, but at the top level you may find that somehow or other a Chairman says, "My dear, I just cannot see you in the role of Chairman." It is not something that people are comfortable with. They may be very well meaning, but what nonsense that is.

Eddie Gray: Two things have struck me particularly so far. The first has already been mentioned: the balance between those issues that are ones of choice and those that are essentially ones of culture and how those two mix.

The second is that, if you look at the evidence papers, much of the conversation in this area is around career paths, career development and the movement of people to senior levels. That is an important factor, but, at an aggregate level, if you take people who are not looking to advance their career but want to take part in the generation of economic wealth and add all of those up, there is a lot of economic potential in people who, for want of a better phrase, are looking for a job but not necessarily a career.

At the aggregate level, that is quite a powerful resource for the country. I do not think I realised that before I started this. That has been a surprise to me as well.

Q423 Rebecca Harris: I am very much looking forward to the publication of your report and your recommendations. Looking at some of the legislative things at the moment, I was going to ask you, if you have a view, what you think of the Public Sector Equality Duty. Do you think it has worked in the public sector and could be a template for the private sector?

Fiona Woolf: I am quite impressed with the Public Sector Equality Duty. Do I think it would work if you simply took it and imposed it on the private sector? This takes you back to why it is that-even though we have had equalities legislation going back over 30 years-the statistics on women in the workplace and career advancement are not as impressive as you might have thought, given the strong legislative powers available for women to use. You have to recognise that you are in a sensitive environment where, a bit like family law, legislation does not work to mandate behaviour in quite the way it might-or you would hope it does-in other sectors.

Of course, the fact of the matter is that, if a woman encounters a difficulty in the workplace, she may think it better not to use the legislation but to see if she can negotiate a solution, because she risks destroying the whole relationship with her employer. That is why, as much as I am lawyer and we have to have it there, you may think of it as the backstop; it deals with the extreme cases. The vast majority, for me, are essentially about the conditions for workplace engagement and getting a wake-up call to the business sector.

Q424 Rebecca Harris: I take it you mean factors like your chances of getting another job if you have taken your previous employer to court for sex discrimination. The next question is this: do you think we ought to have a duty to conduct equalpay audits in the private sector?

Ruby McGregor-Smith: Absolutely. I think equalpay audits are important.

Fiona Woolf: I had some experience of them about four or five years ago. I think it was about the time when the GLA had done some research on how many equalpay audits had been done in London businesses. They found that only about 28% of businesses had ever even thought about it and thought it was a good idea.

I was involved in an equalpay audit, which was done by a new chief executive, somewhat to the surprise of the organisation. They said, "Well, we do not think there is anything that we will find." Of course, guess what? The result was indeed that there were some gender pay gaps that were quite startling. I then became President of the Law Society and we looked at the equal pay of the legal profession as an issue and discovered that, after lots of corrections for different types of work and different regions of the country, we still had a 7.9% pay gap in the legal profession, which was outrageous when you thought about the profession it was. As you might imagine, I am quite a fan of it.

Q425 Chair: Is that reflected by the experience of the other members of the Council?

Ruby McGregor-Smith: Absolutely, it is. We have certainly looked at equalpay audits across our business. We have also encountered some challenges with some publicsector contracts, where they have not been there. I think it is incredibly important. I do not understand at all why you would not pay equally on gender. I think it is important to do; it is an important check for any business to do.

Eddie Gray: I would certainly agree that it is important we ensure there is visibility that this is happening. The question is always, "What is the particular carrotandstick combination you use to make it happen?" What we are seeing at the moment is a strong move to increase transparency. We are seeing a positive response to that. The Government, as I understand it, is also moving towards a position where those people who are found to have transgressed on the gender paybalance will then be subject to audits post being caught out-if that is the right way to phrase it.

That is quite a powerful combination. If I had a personal choice, I would let that run for a while to see how well it does. I am conscious that when things are imposed blanket across people, when you have a wide deviation in current behaviour, there is a tendency to drive things to the point where businesses think, "Now it is a regulation I have to make sure I tick the box," and the cultural change that underpins this, which we really need, tends to get a little lost.

If I were to have a personal vote, I would increase the pressure on transparency. I would support the Government’s use of audits for those who transgress, but I would keep the broad range of audits in reserve to see whether that first move gains real progress.

Q426 Rebecca Harris: I have one final question. Do you think that equality impact assessments should be reinstated on a statutory rather than a nonstatutory basis?

Fiona Woolf: It is a good question. I think it is always a question of whether you think impact assessments in and of themselves add value and drive behaviour. There are two schools of thought. One is that they should be done for everything, whether they are environment impact assessments or legislative impact assessments or whatever, because they throw up information. There is then the cynical school of thought, which is that they just throw up information and people then have the choice of whether to ignore it or do something with it.

I rather tend to sit on the fence on that one, but the Government Equalities Office has its own programme to throw up information in the form of the Think, Act, Report initiative, which is in its early stages. It is less than a year out of the box. They are inviting businesses, at least, to report on gender equality and also the tangible things they are doing to address the issues that they have found. This goes a step beyond impact assessment to deliver to people some ideas about what they can do about it.

Ruby McGregor-Smith: I think it is important to report on these things in a public company, but my only request is that, if we increase disclosure requirements for public companies, we take some of the other things away. There is a danger that you just burden business more and more with reporting. We need to decide what is really important. What has happened is that every few years reporting has gone up and up.

You need to stand back and look at the whole thing. My own report is over 120 pages. The question is this: what is important? You can do the disclosure, but it is a burden-particularly for smaller businesses. Collecting the data, doing the disclosure and explaining it is a lot of work as well, at a time when I think we have to be quite careful about what regulation is trying to do. This is trying to improve economic impact, not put more of a burden on to industry. It is how we balance that. All I would ask is that we take some other regulatory things away, if this is one of the priorities.

Q427 Chair: In many ways, that summed up the key issue that we are trying to come to recommendations on. Before we move on, can I just pick up a point that Eddie Gray made? He talked about equal pay audits being introduced where companies transgressed. What I am not clear on is this: how can you tell they have transgressed, without an equal pay audit to start with?

Eddie Gray: I was explaining what I thought I had read. My understanding is that there is a mechanism. Perhaps I can seek some assistance here. It is through the tribunal system.

Chair: You go through an expensive tribunal system before you have that, then?

Eddie Gray: Whether or not it is the right system, what I was saying was that my understanding is that the Government is trying to recognise that they have a mechanism by which they can identify people who have transgressed and they are intending to intervene with those particular companies. A combination of increased transparency and such an action seems to me to be a potentially quite powerful combination.

Chair: It takes us into the whole area of employment tribunals, the payment of fees and the disincentive effect of them and so on, which perhaps is not the area we are covering now.

Q428 Mike Crockart: This is quite apt, because you had started to talk about Think, Act, Report. That is the area I wanted to concentrate on. We have had written evidence from the Government that they are quite happy with the way things are going, saying that they have made great progress thanks to the enthusiasm and support of 50 leading organisations. What is your take on how Think, Act, Report is looking? I know it is early days, but is there a direction of travel?

Ruby McGregor-Smith: As a business, I think Think, Act, Report is a good thing to report against and do. At the moment it is voluntary. My only comment about that, if it were to become mandatory, would be to take a look at all reporting and say what is going to be mandatory and not. I think it is very dangerous just to apply more and more. We need to go back to the point around equality in the workplace first. Business must have equality in the workplace; therefore, what are the key things business needs to report against to make sure there is equality? That is not just about gender, though. That should be looking at race and disability as well. I think you have to have a whole platform around equality first; then you can decide what companies should report against.

The danger at the moment is that we are going one way on gender and there are other recommendations coming out on other things. At what point do you stop compiling statistics for your organisations? Where is the economic benefit of that? Business will do it if it sees the economic benefit. It can be well explained, but there is a danger that we overreport at present. But I think it is good initial progress and it is making companies think just a little differently about what it is. It should not be underestimated how much business still needs to be educated in this area.

Q429 Mike Crockart: Surely the fact that it is not mandatory-that it is voluntary-means it is going to end up being a selfselecting group, who are fairly confident about their processes and procedures and are doing this as a promotion of the good practice that they are doing. It is back to the question that the Chair asked Mr Gray. It is about how we identify those who are not carrying out good practices. They are not going to selfregulate and volunteer to show that they are not carrying out good practices.

Ruby McGregor-Smith: It does impact business. If you are not a business that puts sustainability and all of the issues you need to do at the heart of your business agenda, actually, in terms of following best practice, your clients and stakeholders expect you to be able to follow that. Although it is voluntary, do not underestimate how many will want to do that to be seen to adopt best practice and to do well for their business. I do not think you have to have everything made mandatory to ensure you get business to sign up to it. Businesses will absolutely do the right thing around things that present them as a better business. Think, Act, Report does that. I do not think, for me, that it is about being mandatory; it is more about the fact that it is a sensible set of recommendations. If a business does not want to adopt it, you have to say, "Why would they not?"

Eddie Gray: I agree. I think it is a very positive initiative. I think it is positive for two reasons. One is that it is genuinely aimed at getting underneath the skin of organisations and forcing them to change their culture. There is always a question between voluntary and mandatory, which leads you-we referenced this earlier-to, "Now I have to tick the box."

Actually, if I am outside organisations and am trying to understand, if I were a woman, whether they are a good place for me, mandatory reporting tends to then disguise and hide those who are thinking about it and those who are not, because everybody is doing something. I would not know, until I was in, whether this was a positive, forward-looking place or not. Therefore, the other thing I think is positive is that the initial response to this has seen signup from large and small and right across sectors. What that is starting to do is set up a potentially competitive environment within sectors, so that talented women who are looking at companies and starting to assess "this is where I should go for these reasons" are able to start making positive choices. More than anything else, this will start to influence the laggards. If you take that away, you take away that system of driving it forward.

I like this initiative; it is trying to get at the right things. We should be encouraged by the range and diversity, in another sense, of the response to it and those who have signed up. I think it has potential.

Q430 Mike Crockart: I am getting a strong feeling that you feel that selfregulation and voluntary approaches deliver change more effectively and quickly than regulation, because regulation, in your words, seems to encourage a tickbox culture.

Ruby McGregor-Smith: It would be a tickbox culture and a burden. You want organisations to care.

Q431 Mike Crockart: The flip side of that is that what gets measured is what gets done. Do you think that the self-regulation or voluntary route does do it more efficiently or quickly?

Ruby McGregor-Smith: I think it depends. What I have said about Think, Act, Report is that it is very good for the early days. There is no doubt in my mind that, at some stage, although it is voluntary, more and more companies will start talking about it and disclosing. Effectively, in our minds, it will almost become a mandatory thing you do anyway. Whether or not it is in legislation, I think it will be seen to be good business practice; therefore, I think businesses will adopt it. If the bigger businesses adopt it, the smaller businesses who want to be bigger businesses one day will aspire to want to adopt that, too. Let us look at the results of that in the next two years and decide if it is moving quickly enough. If it is not, maybe some of it does need to become mandatory.

Fiona Woolf: The challenge is not just around whether it is mandatory or not. The challenge for the Government Equalities Office is what they do with the information: whether they report it and communicate it and begin to use the organisations that are out there-who would be very happy to partner with them-to embed the message that this is good practice for the new business-normal environment they are in and, more importantly, the new war for talent that they have.

Q432 Chair: Do you think there is a case for introducing, potentially, time-delayed legislation, which will spell out what the Government expect but not actually impose a regulatory regime until some specified date in the future to incentivise companies to deal with this issue beforehand?

Fiona Woolf: Do you mean some sort of sword of Damocles?

Chair: Yes, you could put it like that.

Fiona Woolf: In other words, if we do not have 30% of women on boards by x, it will be mandatory.

Q433 Chair: Yes, to a certain extent that is encapsulated by the European approach. I am particularly thinking of things like equalpay audits and so on, which you have basically told us you think are good and should be introduced. The Government, if anything, seems to be moving away from any sort of obligation to carry them out. If you are to oppose regulation in this area, what can the Government do to, if you like, make the voluntary system work?

Ruby McGregor-Smith: I think it is okay to introduce legislation later. You have to go back to what is really important in this whole area. There is a danger, at the moment, that there are lots of initiatives. We are talking equal pay; we are talking about Think, Act, Report; we are talking about lots of different things. The message could come across as quite mixed. What is important for business to fix? What are the priorities? Decide whether the priorities are going to be voluntary or mandatory; make that decision with us and let us know. At the moment, it comes across as very mixed as to what the priorities are around equality. We have to get those priorities agreed before we put any more legislation in.

That would simply be my request. It is a very confused message, particularly for many businesses who do not understand all of it and who have to get up to speed with understanding how to implement new processes in their workplaces.

I sit as a trustee of Business in the Community. If you take a look at improving workplace practices just in HR, in many of these areas it is a difficult call for businesses that have not done it well or do not know how to do it. You have to decide on the priorities and say what makes best business sense and what can aid businesses to grow. Otherwise, it gets caught in a regulatory environment that is just about audit. With all due respect, audit does not always improve business.

Eddie Gray: Rarely would it be the case that it is a bad thing for Government to be very clear about its expectations and the path it would like to see developed. I think the question is whether regulation, now or delayed, is necessarily the best way to do it. I am not sure it is always the case. If I look at the Davies Report as an example in this area, my personal view is that, if we look back in the future, we will look at the way in which the investor community, investor groups and all of those kinds of groups decided this was an important issue that needed to be sorted out. They were impressing on companies that they were taking this seriously and they had expectations. I suspect, when we look back, we will find that was a very powerful motivator in the success of the Davies Report.

I think it is very interesting when you talk to senior people in business. You talk to chief executives who have strong interactions with the Government. They would tend to report back that the issue of gender equality is here for a day as a message, it disappears again and then it comes back and goes away. We need a consistency and a drive from the Government level that says, "This is important; we have expectations over time and we are expecting all parts of the business community to work together to make this happen, utilising things like Think, Act, Report and so on."

Importantly, the Government need to be clear that they are committed to this and that it is not going to be hot and cold.

Chair: I think we will look forward to your report in due course. Maybe that is a taste of the recommendations in it. You have raised a number of issues that I would love to pursue, but we are timeconstrained, so I am bringing in Ann McKechin now.

Q434 Ann McKechin: If we could turn to the issue of flexible working, the Government made an announcement of extending flexibleworking rights in November last year. I wondered what your views were. Do you think the Government has gone far enough or do you think it is imposing a burden on business that it will find hard to tolerate?

Ruby McGregor-Smith: I think flexible working for anyone in the workplace, increasingly, going forward, will be critical. I therefore think that more needs to be done to ensure that business does allow its employees to work flexibly. I will not put that down to gender; I am going to talk about families with caring responsibilities. There can be many reasons why you need to work flexibly. It is incredibly important. If that is the burden business has to bear, so be it. I do think this is really important.

Q435 Ann McKechin: Some people who have given evidence to us have pointed out that this does not apply to new jobs. This applies to people who have been in their jobs for six months or more. Only then can they make a request. Much of our employment is now changing into part-time, temporary and agency work. For many people-many women, particularly-on lower paid jobs, which is likely to be the type of work they are seeking, it does not mention that you can request flexible working in the job advert and noone approaches them. Do you not consider that we are going to limit the ability of people to work flexibly to those who tend to have better income levels?

Ruby McGregor-Smith: We are coming up with some recommendations on flexible working through what we are doing here. I think we need to offer flexible working to all; I am very passionate about that.

Q436 Paul Blomfield: I wonder if I could explore particular issues relating to SMEs, in the sense that much of our economic recovery, we say, is dependent on the growth of SMEs-certainly in the area that I represent, in South Yorkshire. We have 40,000 SMEs and they are critical to employment and growth. Many of them are run by very impressive women.

I am interested in both sides of the discussion on SMEs, both the problems that they face, particularly the micro end of businesses, in terms of accommodating flexible working-I will come on to this in a moment-but also the women that lead those businesses. What barriers do you think there are to women entrepreneurs in startups? What sort of interventions can we make to make life easier for them? I held a round-table before we started this inquiry for women involved in business in Sheffield. They had some fairly passionate views and I wondered what yours might be.

Ruby McGregor-Smith: One of the things we are talking about is promoting enterprise through all of our recommendations. If you take a look at what being a female entrepreneur means, I think-even for the kids at school-it is not about, "I am going to be a female entrepreneur and end up like an Alan Sugar." This is also about, "How do I go and set up my own business doing whatever, using whatever range of skills I have?"

Again, I come back to confidence. How do you do this? How do you encourage more women to set up their own businesses? How do you get them to believe they can and believe that, when they go to the bank and need to raise their funding, they will get it? I think there is evidence to suggest that more women do get the funding now, which is not necessarily always widely known.

More and more, I think it is about giving them the tools-particularly at the points in their life when they decide they want to go into business, which, for many, is not just when they are young. It may be when they have had families and are looking for more flexible working. If they cannot go back and do what they do, how do they do it? It is about making sure they have the tools that enable them to set it up. There is a huge amount of untapped talent in women in the UK. We could provide them with the simple startup tools: what you need to do, how you set up a company, whether you have the financial acumen to do so, whether you need some training or development and so on.

You need to do a whole programme around getting an entrepreneur to start up a business in the UK. There are some organisations-certainly, we are pointing to their evidence-that can really help you with that. I do think there is quite a lot going on in the private sector to try to help with some of those issues.

Q437 Paul Blomfield: Can I just come back on that? In a sense, some of those things that you described are almost genderneutral.

Ruby McGregor-Smith: Yes, absolutely.

Paul Blomfield: They are needed by all people in startups. The problems that were described to me by women who had set up businesses and subsequently struggled were at the point when things like caring responsibilities were triggered. It is a different position, if you look at maternity entitlements in a big organisation, from leading a business. They gave me accounts of businesses that had failed at that point.

I just wonder, if we are to encourage women entrepreneurs, what sort of interventions and support we need to be looking at as a society around those sorts of issues.

Eddie Gray: When you see the Women’s Business Council report, I think you will find that we have strong agreement with the point you are making. We are in the process now of trying to get to your question of what the specifics are.

It is probably worth saying, about the Council and its process, that, as I say, we started off identifying those areas where the maximum of potential exits from the system in terms of contributing to economic growth happened as women went through their working lives. We did not start with entrepreneurship. What became clear was that at every stage entrepreneurship was a potential response, and that is why it has become a separate strand of our work.

You are absolutely right: there are different issues at different stages. Particularly for women in later stages, who perhaps want to set up businesses because they have been made redundant-that is a common story-the issue of caring is significant. We are trying to crossreference those and make sure that our recommendations take those into account.

There is another issue as well that has been interesting for me. I ought to say that I have never worked for an organisation of fewer than 50,000 employees, so I am not necessarily the best person to ask. However, we have been talking to many of these entrepreneurs in the same way you have done; I would be interested if you had a similar response. I found that the sense of what the expectations of a business were-in reference to providing employment or an expectation of growing and becoming bigger, which they do not always want to do-was an interesting challenge, which many of them are finding difficult to square away.

I think what is really important about this agenda-and the whole WBC agenda-is that, to your point, it feeds back into the system. The more of these businesses we can create, the more employment opportunities they offer, potentially, for other women. It is a potentially virtuous circle and we do think it is an important area; we are in full agreement.

Q438 Paul Blomfield: I would very much like to pursue this further but I am conscious of the time. I wanted to look briefly at the other side of the equation for small businesses and the difficulties that many report in accommodating flexible working and maternity leave. It has been suggested to us by some witnesses that there might be a role for Government in providing support to small businesses to help them accommodate flexible working. Do you have a view on that issue?

Ruby McGregor-Smith: I think it is difficult for all businesses to accommodate flexible working, big or small, because it does have an impact-particularly in the small businesses where you are very reliant on key individuals. However, I do think that if we are going to be serious about the debate about getting the most economic value out of individuals in the workplace, flexible working has to be here to stay. I am less inclined to say there needs to be specific Government support. I am much more inclined to say that as you begin to build your business, of any scale, flexible working is something you need to think about from day one.

Actually, we say that it is very tough for all businesses to do it, but I think it is more about a mindset change to ask what flexible working means and where people need to be or not be. Technology today means that many of them do not need to be in certain places. There are key roles that you cannot always flexibly work on in organisations. Every organisation has that, big or small, but in most cases you can get there. I am less inclined to talk about direct Government intervention in that. It is for business to come up with how it is going to work it.

Eddie Gray: I would be looking more for Government facilitation, rather than intervention, in this area. To the point Ruby has made, I hope we would be able to think through issues that will help small businesses support this-whether it is investment in technology and so on, which might allow them to do this and which they may, because they are small businesses now, be struggling to afford. That is part of the analysis, but I would not want, at this stage, to walk away from the idea that there could be Government facilitation that might help.

Chair: We have come to the end of the time. Mike, you did indicate you had a supplementary. Could you make it very brief? Equally, could the responses be very brief?

Q439 Mike Crockart: I will make it very brief. I did a similar thing to Paul in talking to local entrepreneurs. They said very similar things: Government support being aimed at highgrowth companies, which they were not trying to be; a lack of networks; and the culture of banks. Overwhelmingly, however, the loudest call came for help with the cost of childcare. Is that your experience as well?

Ruby McGregor-Smith: Yes. One of our key recommendations will be around support on childcare, if we are serious about untapped talent in the UK.

Chair: As ever, we have run out of time. You raised a whole range of issues that we would like to pursue. Can I repeat what I have said to other witnesses? If you feel, in retrospect, that there is further evidence that you would like to give or an answer that you did not give that perhaps you should have, please feel free to send it in as supplementary written evidence to the Committee. Equally, if we feel there is a question we did not ask but should have, we may write to you to ask it.

Obviously, we realise that your report could have a very significant influence on Government policy. With the agreement of the Committee, we may like to have you back in here to talk about it subsequently and, indeed, we may want the Ministers in to see how they are going to respond to it. As part of our process of influencing Government, we like to monitor issues and see how Government policy is developing on it-not to mention Government delivery. Thank you very much. I do appreciate the contribution you have made.

Examination of Witnesses

Witnesses: Rt Hon Maria Miller MP, Secretary of State for Culture, Media, Sport and Minister for Women and Equalities, and Jo Swinson MP, Parliamentary Under-Secretary of State for Women and Equalities, Department for Business, Innovation and Skills, gave evidence.

Q440 Chair: Thank you and welcome. I was getting slightly worried that we had lost you. Losing one Minister is unfortunate; to lose two is positively careless. Can I thank you for agreeing to come before us?

Minister, you did say that you would like a twominute introductory contribution; I have agreed to that. I will keep it to two minutes. I am conscious that both your and the Committee’s time are valuable, and we have an awful lot of questions that we want to ask you subsequently. If you would like to start with your twominute opening, please do.

Maria Miller: Thank you, Chair. I appreciate that. It is a great pleasure to be here. What I wanted to set out up front is really where the Government comes from on the issue of women in the workplace. We all know that we have to compete globally as a country. Every single person in this country has a part to play in making this country an economic success. We need to make sure that we are allowing everybody to fulfil their potential in the workplace.

I have to say, Committee, that this is still a workplace designed by men for men. There is a great deal that this Government still has to do to make sure that we can allow women to play their full part. That is why we have an extensive set of structural changes that we are putting in place in terms of shared parental leave, flexible working and increased support for childcare.

We are also making sure that all sectors, all jobs, at all levels are open to women. The work that we have done identifies the fact that one-third of the gender pay gap is still driven by the types of jobs that women go into. One-third of it is the amount of time they take off around their childcare duties. If we can overcome these barriers and the barriers to women participating fully at all levels in business, this will be a great success story not just for Britain in terms of fairness, but also for Britain in terms of our economic success in future.

Chair: Thank you. You were actually within the two minutes.

Maria Miller: I like to be brief, Chair.

Q441 Chair: Can I just say, before we move into the questions, that we have had a session with the Women’s Business Council? We understand that they will be making a report in May. I have said that, with the agreement of the Committee, we will look at that report and may have them in to talk about it. I will put down a marker, again, that we would like to have you in, as Ministers, to comment on your response to their report.

Can I open with the Public Sector Equality Duty? Do you think it has worked effectively in the public sector and, as a template, that it could be used for the private sector?

Jo Swinson: I think the Public Sector Equality Duty is important. In requiring organisations in the public sector to have due regard to preventing and eliminating discrimination, to fostering good relations and to advancing the cause of equality, that provides a positive move towards equality, rather than just the absence of discrimination. Equality is more than the absence of discrimination. We want to make sure, however, that this is working as well as it can. That is why we have set up a review of the Public Sector Equality Duty. The group was formed to do that in December. They are working on that; we are expecting that, in the next few months, we will be able to read their results.

In terms of how the private sector can look at equality issues, it is right that organisations can work out, individually, the best way to do that. There may well be elements of things in the Public Sector Equality Duty that public sector organisations do that they also find helpful. I am sure you have heard evidence from different business groups that have undertaken a range of different methods of dealing with their equality responsibilities and have recognised that it is good for business. Some of those basic issues, such as collecting and publishing information, can be immensely helpful for organisations, whether public or private sector, to understand where the barriers to equality are and take steps to address them.

Maria Miller: To underline that, Chair, it is the business case that we feel is very powerful for making sure that we have equality in whatever jobs there are-whether it is at board level or any other level in a company. I think there is a powerful case there; that is the case that we are taking out through initiatives like Think, Act, Report to make sure that businesses really understand that equality case. We think that is a powerful way to drive equality in the workplace.

Q442 Chair: Can I express concern about something? When you say you are reviewing something, there is a perception that it is not working and therefore needs to be looked at again. I am not clear whether you think there is evidence that the Public Sector Equality Duty has or has not worked. Reviewing it could be interpreted as withdrawing from the commitment that it involves. It seems to me that if it has not worked-and you are reviewing it because of that-you need to say so; if it has worked, however, you need to say why you need to review it, in effect, and whether it is relevant for the private sector.

Jo Swinson: If we do not review it, it is very difficult to say whether it has or has not worked. That is the purpose of reviewing it. We are very committed to the principle. We want to make sure that the mechanism for delivering that principle is the right one. Undertaking this review will help us understand how well the Public Sector Equality Duty is indeed working in practice. It fits in with the Government’s wider approach to legislation and policy, where, as a matter of course, regulation or rules will be reviewed on a regular basis. I think that is a healthy way to do government, so that you can take stock of progress and see what is working well and what needs to be improved.

Q443 Chair: You are saying you are reviewing it because you want to assess. If that is the case and you feel that it has not worked, what do you have in mind for taking this agenda further forward? I appreciate you cannot anticipate legislation, but it would be helpful to have some insight into your thinking on it.

Jo Swinson: For clarity, Chair, do you mean taking forward the agenda on the Public Sector Equality Duty or equality more widely?

Q444 Chair: In so far as the one impacts on the other, I think it is generally accepted that it is easier to start within the public sector and then spread good practice to the private sector. If you feel that it is not working, what might you be looking at? Would you consider using it for the private sector as well?

Jo Swinson: When the group is still convening to assess the Public Sector Equality Duty, I think it is a little bit premature to make assumptions about what they will find and what we might do afterwards. I think we do have to wait until that group has done its job. However, as Maria mentioned, there is a whole range of efforts. We are not waiting for that to happen before we engage with the private sector on equality issues.

Think, Act, Report is an excellent example, where more than 60 companies, covering more than 1.2 million employees, have signed up to regularly look at and think about how they recruit, retain, promote and, indeed, pay women in the workplace. They are dealing with some of the issues that are apparent in the pipeline about the lack of women in senior positions in a representative way across business. There are things the Government is already doing, but obviously we will look carefully at what the Public Sector Equality Duty review group comes up with when they publish their report.

Q445 Chair: I am going to bring in Ann in a moment, but, before I do so, can you put it on the record that you are reviewing this from a positive perspective of promoting this particular agenda, rather than resiling from it?

Jo Swinson: The Government is absolutely committed to equality. We want to make sure that we promote equality in the most effective way possible, and the review of the Public Sector Equality Duty is part of that process.

Q446 Ann McKechin: I want to clarify something about this review of the Public Sector Equality Duty. You said that the main reason is that you do not know how it has worked. I find it a little odd that there are no assessment criteria currently in place-you are not examining how the duty is taking place. Surely, if you set up a duty, you would have assessment criteria?

Jo Swinson: It is fairly new. Although it was part of the Equality Act, it was implemented by this Government, so I think this process is actually about being able to look at how it has worked. I expect there will be differences in different parts of the public sector. There will probably be examples of best practice, and those need to be shared.

Q447 Ann McKechin: I am trying to ask this: is there a standard mechanism of reporting or assessment being carried out by the Government Equalities Office currently?

Jo Swinson: The Public Sector Equality Duty places the onus on public sector organisations to have due regard to those different criteria that I mentioned earlier. There are specific duties as well: for example, around the publishing of information. If organisations are not living up to those specific duties, it is obviously an issue that can be publicly tracked.

Q448 Ann McKechin: Would you have those reports already to hand for the review? You said it has been only recently implemented, which gives me a second concern. If you do not have many hard statistics at the moment, how can you conduct a robust review of the process?

Jo Swinson: Regarding the specific duties, it will be pretty obvious whether that information has been collected by organisations. In terms of the general duty, looking at whether that has worked needs to look more widely at the equality outcomes in organisations. It is fairly new, but it is two years in, so I think that is a sufficient amount of time to be able to make an proper assessment-with there being a certain amount of information-but also early enough that, if there are changes that need to be made, those can be made in a timely way.

Ann McKechin: Perhaps it would be helpful if you could let the Committee know just what the assessment criteria are, so that we are quite clear on what you are actually comparing in terms of your review process.

Jo Swinson: We can certainly send a note about the specific duties and how those are published.

Q449 Mr Walker: How big a role do you feel data transparency plays in addressing the disparities between men and women today?

Maria Miller: What is this in terms of?

Mr Walker: I mean in terms of addressing the pay gap.

Maria Miller: Obviously, we are very conscious that, whilst the situation has improved with regards to the gender pay gap, there is still a great deal more work to do. When I set out my opening comments, I noted that the pay gap is driven by a number of different elements that we have already identified-whether it is participation in certain sectors or whether it is time off for family responsibilities. There is, however, still another significant aspect of the pay gap that is to do with unknown circumstances. That may be to do with some sort of discrimination, so transparency of information is important. We have already looked at how annual reports can look at making this sort of information more readily available in terms of the participation of women in the work force, but also around issues of pay.

Through things like Think, Act, Report, we are encouraging more of the sort of transparency that can help organisations understand better where any possible issues around the gender pay gap are coming out. Ultimately, however, we also want to make sure that women are going into the right sorts of job in the first place to give them the opportunity to have the sort of lifelong earnings that are going to be comparable with their male counterparts.

Jo Swinson: If I can add to that, I am a great believer in the notion that what gets measured gets done. Transparency and monitoring can play a really important role, because very often some of the factors holding women back are not always-although it does exist-actual sexism; often, it is that the issue has not been properly thought about. In fact, sometimes the problem is not obviously apparent until you look at plain numbers in black and white on a page.

This is why I think the Financial Reporting Council will really help to crystallise this issue. As of October-and next October for quoted companies-companies have to report on their diversity policy and on the number of women not just on their board but at the next two senior levels in their organisation. What is so important about that is it starts to address the pipeline issue. You cannot just deal with women at very senior levels of the organisation; you have to deal with how that progression works throughout their careers. It is a key tool to drive behaviour.

Q450 Mr Walker: You are absolutely right to raise the pipeline issue; that is certainly something that a lot of the evidence we have taken from businesses has focused on. Things like quotas do not necessarily work if you do not address the pipeline issue. In terms of the transparency and having that clarity on pay, you already have the power through the Equality Act to make companies conduct equal pay audits. What led to the decision not to exercise that power and not make that compulsory across businesses across the board?

Maria Miller: What we want to do is to encourage companies to look at this for themselves and do it in a way that is most relevant for them. Going back to the sort of voluntary measures that we have put in place through Think, Act, Report, I think that can help get the sort of culture change that is required if you are really going to see a longterm solution to the sort of problem we are talking about here.

That is the approach we favour but, as you rightly say, there are measures in the Equality Act that make pay secrecy clauses unlawful. We will be taking through legislation that will give tribunals the power to order that employers do actually conduct an equal pay audit where they have been found to discriminate over pay. There are opportunities there to be able to put firmer powers in place and firmer direction in place. What we really have to do, however, is make sure that businesses understand that this is also a culture change, too.

Q451 Mr Walker: In terms of Think, Act, Report, you quoted some figures earlier in terms of 60 large organisations and a large number of employees. How much further would you like to see that initiative reach? Obviously, it is fairly early days at this stage, but in terms of reaching the vast mass of businesses that employ women and can give women opportunities, it could clearly go a lot further.

Jo Swinson: Yes, absolutely. I have already had a round-table event with various employers, some of whom have already signed up and some of whom have not yet, to make the case. It is something that, in my joint role as a business Minister and an equality Minister, puts me in a good position when I meet with a wide range of companies on a regular basis to promote the initiative and encourage them to sign up. It is fair to say there is a significant degree of interest in it. The team at the Government Equalities Office is working with a number of companies towards getting more signed up. We do want to see it go a lot further.

On that note, on the link between my two different hats as a business and an equality Minister, I would just say it is really positive that the BIS Select Committee is dealing with this inquiry into women in the workplace, because in combining those two roles I see that they are absolutely interlinked, although I do not think those have been combined in Government before. The fact the BIS Select Committee is dealing with this as an employment and a business issue-rather than simply as an equality issue-is a very, very positive sign.

Q452 Chair: Before I move on to the next question, can I take you up on something? It would appear that the Government has said that it will not place a duty on private employers to undertake equal pay audits. If we are talking about changing the culture of companies, how do you think that squares or will drive a change of culture if the Government is saying, in effect, it will not take any action if companies do not do anything?

Maria Miller: We are not saying that we will not take any action; we are saying that exactly when there are issues we will take action.

Q453 Chair: What action will you be taking?

Maria Miller: As I said before, we are taking through legislation that will give tribunals the power to order employers to conduct a pay audit where they have been found to discriminate over pay. There really is a very important incentive there for employers to get it right.

Chair: We have had, however, all sorts of evidence from previous witnesses about the disincentives of people in the workplace taking issues through the employment tribunal system. It would appear that you are putting a lot of faith in a system in which there is very little confidence that it can deliver on this agenda.

Jo Swinson: One of the cultural changes that is an advantage to an initiative like Think, Act, Report over pay audits purely is that it is not just dealing with pay. As I said, it is also looking at the recruitment, retention and promotion of women within an organisation. With a view to some of the pipeline issues that we have talked about, those are incredibly important to see women fulfilling their potential in the workplace. It is a more holistic approach to addressing the issue and it being done on a voluntary basis is one that I think can get greater buyin from business.

However, we have not abolished that power from the Equality Act; it remains on the statute book and could be brought into being. When Think, Act, Report was launched it was very clearly said that business had to step up to the plate and live up to their responsibility in terms of equal pay. At some future stage, it would be possible for a Government to introduce equal pay audits, because that power remains within the Equality Act, if businesses seem to have, as you say, done nothing.

Maria Miller: It is also important that we are not just continually dealing with the symptoms and that we are actually dealing with the causes as well. That is why I would encourage the Committee to consider the work we are doing across Government, both in terms of encouraging women to be involved in nontypical areas-particularly the work that is going on in science and technology to encourage that-and also helping women stay much more connected with the workplace, both through the flexible parental leave measures that we are bringing forward and also through flexible working as well.

Q454 Chair: Yes, we are going to come on to those. They will get appropriate consideration. If I can, however, come back to this point, the tribunal system is a haphazard way of addressing this problem in so far as it depends on individuals who are prepared to take a case forward and, sometimes, whether the unions will back them or act on it.

Minister, you did imply that the power to take action was still on the statute book. If the tribunal approach does not seem to be delivering, are you prepared to use that power?

Jo Swinson: We need to look at the evidence. We are talking about two different types of companies here. Actually, in our experience the vast majority of companies see this as a business issue. They see this as an issue that can be very motivating for their work force if they are very publicly and obviously seen to address it. They have very much welcomed the Think, Act, Report initiative. We think that, for most companies, this is the right approach. We are starting to see progress. In the latest figures that came out, the pay gap was again coming down. Obviously, however, there is more that needs to be done.

There is a separate-it is thankfully a minority-and small group of companies who are discriminating on pay. The Government is very clear that this is not acceptable. That is why the power for equal pay audits to be ordered by tribunals in those cases is being taken through the ERR Bill that is currently going through the House. For most companies, we do not believe that would be necessary, but for those that are breaking the law it is absolutely right that very firm action is taken to ensure they do not do that in the future. Obviously, though, we will be assessing the success of Think, Act, Report in the context of the wider issues of the pay gap and we hope to see it continue to come down.

Q455 Nadhim Zahawi: Welcome, Minister and Secretary of State. I think you are hearing healthy scepticism from the Committee about the voluntary nature of what you are proposing. The lawbreakers will probably be caught out by the tribunals, but really, to shift the culture and to make that massive move, there is no reason why you cannot mandate equal pay audits and make them transparent.

My question to you is this: how long are you going to give yourself? How much time are you going to allow? What targets are you going to set for that pay gap to close before you return to this subject?

Jo Swinson: We are at the stage in Think, Act, Report where it has been going for a little over a year and within that year there has been a very significant takeup, but obviously we want to give that more time to work before reaching for a more regulatory approach. I would reinforce that the pay gap is very important, but it is not the only issue. It is interlinked to those other, wider issues around retention, recruitment and promotion, which also need to be addressed. I believe that doing that in a holistic way is a much better approach. When Think, Act, Report was launched, it was very clearly said to business that this is something in lieu of equal pay audits, and if it is not embraced, ultimately that power remains.

Q456 Nadhim Zahawi: How much time are you going to give yourself?

Jo Swinson: I am not going to put a date on it at the moment. I appreciate that might be slightly frustrating, but we will clearly be looking for significant progress.

Q457 Nadhim Zahawi: Are we talking about a year, two years or three years?

Jo Swinson: I know you are tempting me into providing an absolutely firm date, but I am not going to do that because there is not a firm date set. We are, however, seeing good progress with Think, Act, Report already. We hope to continue to see that success going forward as well.

Q458 Nadhim Zahawi: One of our witnesses, Sheila Wild, said that 10 years ago we had a voluntary approach that comprised very strong messages from Ministers as a group-not just the Secretary of State for Trade and Industry, as was the case then, but Ministers as a whole-and the voluntary approach we have now is much weaker than it was then. How do you respond to that?

Maria Miller: The response I give is that we are seeing some good progress. We are not complacent on the matter, but we have seen the gender pay gap narrow. We want to make sure that continues. To stress the point again, this is not only about looking to employers. Obviously, that is an important part of it, but it is also making sure that women are participating across the board in all areas, so that they are getting the access to the sorts of job that they need-that we are making sure that parttime jobs, as well, can be the sort of well remunerated jobs that we need them to be.

All of these things are really important in tackling this issue. What you have here is a Government that is committed to looking at that across the board and not simply looking at the symptoms when it comes through somebody’s pay packet.

Q459 Nadhim Zahawi: Can we just talk about the Equal Pay Act and whether it is fit for purpose? Obviously, it was designed in 1970 and enacted in 1975; do you think it is fit for purpose?

Jo Swinson: It is now legislation that is historic in terms of how long ago it was brought in. Of course, I am sure we would not have wanted it to take as long as it has to achieve equal pay, but I do not think that the legislation is the problem. As the Secretary of State outlined earlier, there is a range of different reasons why the pay gap exists. We can send this graph to the Committee about the different reasons for it, which are a range of the choices, the specific industries and sectors that women go into and, also, the issues around caring responsibilities and career breaks. A small part of it is education and, obviously, a part of it is unexplained.

It is not always just straightforward discrimination. There are many circumstances where it is very much unintentional. That is where making sure companies are seriously looking at the reasons behind any differentials they have and, indeed, how they recruit in the first place is so very important. I do not think changing the Equal Pay Act is some kind of magic answer to solving this problem that we face now.

Q460 Nadhim Zahawi: My question is really this: does it fit in with today’s labour market or should it be brought up to date? It is an Act that was brought in a long time ago-what do you think?

Jo Swinson: I do not think there is any need, particularly, to change the Equal Pay Act. I do think we need to be working very hard, as Government is working very hard, to make it a reality. The initiatives that we have outlined are helping to do just that.

Maria Miller: It is very easy to fall back on legislation as a way of trying to fix something when, actually, I think we have identified very clearly that there are some cultural and structural issues here. Rather than use the fig leaf of legislation, let us get to the nub of the problem, which is making sure that women are getting good careers advice, which, again, is something that we have worked on very strongly as a Government, that they are going into the right sectors, and that we have the right, modern workplaces that women can work in, thrive in and can stay in their jobs when they have caring responsibilities. Importantly, we should not force women into some false choice that they have to either have caring responsibilities or a job. They should be able to do both, and it is in the economic interest of this country that they do.

Q461 Nadhim Zahawi: I hear all of that. My question, really, is this: is a piece of legislation that was designed in 1970 fit for purpose in 2013? That is really the question.

Jo Swinson: I think it is, yes. There is plenty of legislation that was designed decades ago that still works today.

Nadhim Zahawi: That is all I needed to know. Thank you.

Q462 Chair: Can I now come on to the Equality and Human Rights Commission? There have been changes both in the rules under which it operates and its funding. Can you just tell us a little more about the reasoning behind this?

Maria Miller: The Equality and Human Rights Commission is clearly a vital, valuable and respected national institution. We want it to be even stronger in the future. It is critical that it is working as well as it can. We believe that, particularly with Baroness O’Neill in the chairmanship, this organisation will go from strength to strength. We have had a comprehensive review of what the organisation is focusing on-particularly its finances-in discussion with the new Chair. We have agreed with her both the budgetary framework that the Commission will be working in and also the importance of it focusing in on its core duties. It is really important that this happens because it is an important part of how we project ourselves in the world in terms of human rights. I believe that we are a world leader when it comes to human rights. It is important we make sure that the Equality and Human Rights Commission is delivering what we need it to deliver to ensure that our position remains that way in the future.

Q463 Chair: How would you define its core duties and what duties are you removing that you think it should no longer carry out?

Maria Miller: Obviously, we want it to be focusing in on the issues around making sure that this country is doing what it needs to do in terms of human rights and that it is focused in on that very clearly. Some of the duties that it had undertaken in the past were more peripheral to that.

Q464 Chair: Such as what? Can you give me an example?

Maria Miller: Such as running a telephone line to provide support. That is now not being done within the Equality and Human Rights Commission itself, but is being done by the Government Equalities Office. We are giving the organisation itself the ability to focus more on its own key tasks. That is one example of where it is not only focusing itself more clearly but also making sure that we can deliver that service more efficiently. I do not have the figures in front of me, but we are actually doing that more cost-effectively for the taxpayer.

Q465 Chair: One witness put it to the Committee that the funding cuts have been so drastic that it has knocked the organisation sideways, and that, by changing the rules, it will have exactly the opposite effect to what the Government is hoping for. What do you think its future role should be?

Maria Miller: Picking up particularly on that point around finances, yes, we have made some important changes. I make no bones about that. The Equality and Human Rights Commission’s first two clean sets of accounts have been published. There has been a 75% reduction in the use of interim staff, for instance, as a way of trying to get costs under control. Now it has a core budget of around £17 million a year, plus some transitional funding there to help with the changes that are happening. That is very much comparable with other countries that are delivering to the standard that we are delivering to.

When you look at the sorts of changes that have happened in other Government Departments, the sort of funding that the Equality and Human Rights Commission is receiving now is very much in line with what one would expect and hope to see. Funding is really not the issue to focus on here; it is making sure the Commission itself really is focusing in on its core role, rather than perhaps on the broader issues that it has in the past.

Q466 Chair: Certainly, it needs to have a clear vision of its core role. The issue, then, is whether the funding level is adequate. What future role do you think it has? Where should it fit in with the panoply of legislation and bodies concerned with promoting this particular agenda?

Maria Miller: It has a leadership role in looking at the focus the Government is putting in on a broad range of measures, whether that is to do with disability, whether that is to do with gender equality or whether that is to do with BME communities. It has an important role in looking at how Government policy is working in practice and making sure that it is working as effectively as it can. Under the leadership of Baroness O’Neill, we will very much see an evidencebased approach in the work that it undertakes. I think that is important, so that it can have really strong credibility in this field.

I would just remind the Committee: we are a world leader when it comes to human rights. We need to keep ourselves there. The newly constituted committee is very focused on that.

Q467 Chair: What you say is interesting, because I read somewhere that the funding cuts were announced after the EHRC had published a critical report of the Government. Can you confirm today that it need not be inhibited, where it is appropriate to criticise the Government, by the Government’s approach to its funding?

Maria Miller: I think an important principle at stake here is the independence of this organisation. While as Secretary of State or Minister in the Government Equalities Office I appoint the Chair after an appointments procedure, which is very transparent and clear for all to see, the organisation has a clear sense of independence and an ability to scrutinise the Government. That is fundamental to the way that it is set up; when you look at the membership of the committee, you would expect nothing less from that group of people.

Q468 Chair: It is useful to have it on the record that it will be able to fulfil its duty and conduct its role without fear of financial retribution. Can you confirm that?

Maria Miller: Yes, absolutely-though, of course, as with all parts of bodies that have funding coming from Government, we live in a financially constrained world. The sort of economic problems this country has cannot be ignored; no organisation can be insulated completely from that. What we have done, however, is make sure that the funding that is available for the Equality and Human Rights Commission can more than adequately allow it to be able to run its functions.

One thing the Committee might want to have a look at is that, consistently, the Equality and Human Rights Commission has significantly underspent-particularly its programme budgets-in the past. I would suggest that financial constraint is not a firstorder concern of the committee. Certainly, we have spoken to the Chair at length. I have personally spoken to the Chair on three occasions about the issues of funding.

I think what the committee wants to do is make sure that it is really constituted with the right expertise in place to be able to look at what the Government is doing and make sure our human rights record is one that continues to be one of world standing.

Q469 Chair: Yes. It is quite common for Government Departments to underspend as well, but we take the message, basically, as, "Use it or lose it." Is that a fair assessment?

Maria Miller: I do not think Government Departments overspend.

Chair: I said underspend.

Maria Miller: Sorry, I misheard you.

Q470 Chair: Can I just move on to the Equality Act? In the context of some of the declarations and assertions that you made before, it seems rather odd that we are having a relaxation of employment protections: for instance, the right of employees to obtain employment data and the power of employment tribunals to make wider recommendations in discrimination cases, which is particularly odd in the context of the responsibility that you are putting on employment tribunals in terms of equal pay audits and so on. How can you explain the rationale for that?

Jo Swinson: All parts of regulation, as the Committee will know, have been going through the Red Tape Challenge process, which has been looking at all of the regulations in place in a thematic way, one area of regulation at a time, consulting on that with stakeholders and seeing where there is superfluous regulation or regulation that could be made simpler.

The two measures that you have mentioned in your question were considered in the Red Tape Challenge and, although the vast majority of equalities legislation was found to be essential and very valuable, not just for the people that it protects but, very often, for business, where it provides a framework for how to approach these issues and get benefit for the business, on the issues of wider recommendations and obtaining information there was evidence put forward in that consultation that this was quite burdensome and not something that was required.

Therefore, in terms of obtaining information, that is a measure that is proceeding in the Enterprise and Regulatory Reform Bill as it is going through the other place at the moment. The other issue has not yet come forward for repeal, although that has been agreed that is what the Government will go. Time has yet to be found in the parliamentary calendar for that.

Q471 Chair: What was your evidence base for these assertions?

Jo Swinson: We conducted consultation.

Chair: With whom?

Jo Swinson: The consultation was an open consultation. Anybody was able to contribute. That was through the usual Government consultations process in line with Cabinet Office guidelines. The consultation response is a public document. It is available to the Committee or anyone else who is interested in it. In terms of the lengthy questionnaires that had been filled in and the suggestion that sometimes very tangential questions would be asked rather unrelated to the case, this was felt to be burdensome by many of those who responded, and therefore it is something that the Government is moving to simplify and focus.

As you mentioned in your question, Chair, this is coupled with a real focus on where organisations have been found not to have complied with their legal obligations; the Government is very prepared to be very tough. Where tribunals have found that there has been discrimination, the power to require an equal pay audit is one we are giving to employment tribunals.

Q472 Chair: In your consultation, what was the balance between those in favour of removing it and those against?

Jo Swinson: I do not have those figures to hand.

Q473 Chair: Could you provide them?

Jo Swinson: I will happily send the consultation response to the Committee. It is fair to say that, as with many of these consultations, there is a split between respondents from the business community and employers, and respondents from campaign groups and trade union organisations and so on. They often take different views and this was no different. However, we did find that the points put forward about the burden on business did make a lot of sense.

It is also important for the credibility of equalities legislation that it is seen as something that is helpful. Equality is good for business. If there are parts of the legislation that are seen to be causing a lot of concern and not adding a lot of value, it can actually taint the overall legislation in some ways and create a more negative view among employers and business towards it, which is something we do not want to happen. We are hopeful that these repeals will help to address some of those perceptions and experiences of there being overburdensome regulation while still making sure that the proper protections are in place for people through equalities law.

Q474 Chair: I recognise that line of thinking. Equally, however, could I put it to you that there is another line of thinking that, by publicly making these changes, there is a perception that the Government is moving back from pursuing that agenda and therefore the drive to change the culture is likely to be weaker as a result?

Jo Swinson: I think it is really important to look at the context of equality legislation and that this Government has kept in place the vast majority of equality legislation-having gone through the Red Tape Challenge process. Indeed, although you have highlighted two small areas where repeals have been identified, at the same time we have also introduced additional measures such as the equal pay audits that tribunals can order where there has been a breach of the law.

It is not a one-way street; the Government is very committed to equality. I think that is evidenced by the fact the Equality Act is valued very much as it ever was, having gone through the Red Tape Challenge process and there being very little change proposed.

Chair: I will not go over the debate on the relevance of the employment tribunals.

Q475 Ann McKechin: If we could look at the issue about the stereotyping of jobs, one of the first witnesses we took oral evidence from was Diane Johnston, who runs an electrical contracting firm. She told us about the innovative approach that she was taking part in to attract women into the electrical profession. At the moment I think the figures are that 1% of electricians in this country are female. In the course of the evidence, one point that she made to us-she was taking women who were unemployed and might have been a little bit older, perhaps in their 20s-was that when you invite women who have been unemployed into the sector to try to get training, issue No. 1 is that there is no funding. That is presumably because they are a bit older.

When you start to look at the apprenticeship figures-this is an issue I raised earlier this morning with the Women’s Business Council-in jobs that are very male dominated, apprenticeship figures over the last 10 years are completely the same. In engineering, for the last recorded year, 2010-11, there were 10,830 apprenticeship achievements for men and only 430 for women. You can replicate that in many other sectors. If you take the reverse, in the beauty industry there were 10 men and 1,380 women. We will be talking to you later this morning about the Davies Report, which talked about targets and a very structured approach for trying to increase the amount of female participation. Far more women, however, are likely to be impacted by apprenticeships in the craft industries. What is the Government going to do to tackle this really horrendous level of stereotyping in many wellpaid jobs?

Maria Miller: I would give you a number of examples that I think are mostly going on in the BIS Department, but, obviously, in the GEO I have an oversight role and take a really keen interest in this exact issue. Unless we are challenging women’s career choice at the start, as I have said throughout my evidence this morning, we really are not going to tackle, fundamentally, the gender pay gap problem.

The Government, for me, has done two things that are really quite vital. The first is the National Careers Service, which was launched in April of last year, which is helping to make sure that young women have access to the sort of impartial advice that can be so important. While parents and, indeed, teachers, are trying to do everything they can to make sure young women are looking at the full panoply of career options, specialist advice needs to be there to ensure that young women are taking the right courses, GCSEs and other examinations to be able to enter the more technical apprenticeships. Above and beyond that, the Government has provided an extra £250 million to do exactly what you are talking about, which is making sure that men and women take up atypical courses. We are absolutely mindful of the point you are raising. We think not enough has been done on this very issue and we are putting our money where our mouth is.

Q476 Ann McKechin: When I look at the Davies Report, Minister, there are very specific targets and a time period. There has been a lot of work done with every part of the sectors in terms of trying to drive that with institutional investors. Frankly speaking, I do not see any of that when it comes to issues around craft skills. I agree with you: we need to give better advice to young girls at school about their career options and encourage their families to look at other careers for their children. I do not think anyone on this panel would dispute that. What I am saying is that you have not actually worked with the industries and sectors at that level and said, "Let us have a target. Three years from now we will have 10% women in all electrical apprenticeships. We will have a target in engineering of 20%." I would not have thought that was particularly demanding. Why are you not doing it?

Jo Swinson: It is important to recognise that the challenge is about getting people in at those early stages. If you look at the comparison with boards, when people come into business it is often roughly 50:50, but then at the top level they fall off.

Q477 Ann McKechin: You control all the funding for apprentices. You control the funding. Surely, if you incentivise the funding or said that they will not get funding if they do not manage to recruit so many women, that would certainly change the industry, would it not?

Jo Swinson: As the Secretary of State has outlined, there is funding that is allocated specifically to encouraging the takeup in both directions of people of a gender that would not be well represented in a range of different courses. That is an important part of the answer. I think also it is partly about aspiration, ambition and encouraging people to be interested in careers or sectors where they may not see many role models, for example, or where, if you turn up at an open day or a course on a particular subject that is very male dominated, you might be one of the few women in the room. That can have an impact.

One of the things we are doing, particularly in science, technology, engineering and mathematics, which also suffers from this gender bias that you have outlined, is fund an organisation called STEMNET, which is basically trying to ensure that there is wide diversity-partly in terms of gender, but also in terms of background-in the science and technology field.

Q478 Ann McKechin: Why are there no targets? Why is there a target in the Davies Report for people at the very top, but no target for the tens of thousands of young girls and women?

Jo Swinson: I was going to say that 40% of the ambassadors in that programme are women. Now, 40% is not half, but compared with the percentage of women in those sectors generally, that is significantly more. I think that is a very clear indication that this is recognised as a significant issue.

Q479 Ann McKechin: How many ambassadors are there?

Jo Swinson: I do not know how many there are. I will happily send on that information.

Ann McKechin: How many are we talking about? Is it hundreds?

Jo Swinson: I will happily send the Committee that information.

Q480 Ann McKechin: What I am talking about is the tens of thousands of people who take part in apprenticeships every year. We have no target and no plan to stop the current flatlining of apprenticeships in key areas, which we need more women in. The Government accepts that. We have no target; we have no particular structure that people can aim for and see clearly where the Government intends to be five and 10 years from now.

Jo Swinson: We have identified resource to help improve this issue and we will obviously need to assess the success of that.

Maria Miller: I would challenge the assertion you are making. It is very important that we get more young women involved in atypical apprenticeship courses, but it is more than just having more women doing car mechanics. It is actually about getting young women to examine the full panoply of opportunities out there. For some of them it might be about going into engineering, but for many it is actually raising their aspirations to make sure they are aiming much higher in their career aspirations.

When we go back to our conversation about the gender pay gap, that is what is really going to help us make sure that women do see their way through to the highest levels-whether it is in engineering or, indeed, in any other part of the industry of this country.

Q481 Mike Crockart: I want to turn to the Government’s proposals on flexible working, because we have heard a lot of evidence from various different organisations about whether flexible working will or will not help them particularly. Businesses have the right to refuse requests on business grounds; that is quite a wide area that it is possible for them to use. Would it not be better for the proposal to have teeth? Should not employers perhaps over a certain size be under a legal duty to permit flexible or parttime working?

Jo Swinson: I think the right to request flexible working has been a great success story in changing culture within organisations-both public and private sector. Obviously, as it applies currently to parents-and the Government has made clear that we will be extending that to all employees, which will take it from about 10 million to about 20 million people-of the requests that currently get made, three in five are immediately agreed between the employee and the employer. Another one in five is then agreed through further negotiations. The vast majority of requests are already agreed. That is a really positive thing. Businesses report that this is something that is beneficial for their business. Three-quarters of them, in a study the CIPD did, said that it improved their staff retention. They have also reported improved staff motivation and employee engagement.

Therefore, the business case is there. In terms of actually imposing a legal duty and going further, first of all, given the success of the policy as it is, the additional benefits would therefore not be great and it would have significant disbenefits in terms of additional stricture on organisations because there will be circumstances where a flexible working request does not fit with the business. If you have a retail establishment that has certain opening hours, it is not going to be possible to do your job-if you are a cashier, at a time when the shop is closed, for example. In the emergency services, cover is required 24/7 and, obviously, very often flexible working can be accommodated within that, but there are circumstances when the rota will need to be made up in a particular way and requests cannot be accommodated.

Where there are sound business reasons, it is fair for requests to be able to be refused, but the vast majority of requests are agreed and there are significant business benefits. This is something that we expect to be taken up more as the culture of work changes from a presenteeism approach-one that it is about working incredibly long hours and being in the office of the workplace. Actually, it is about getting the job done and the outcomes achieved. Increasingly, more employers are looking to that as what is important. That has benefits not just for women, but for all people in the work force who want to be able to balance their working life with the rest of their responsibilities and things that they do.

Maria Miller: As Members of Parliament, we are all employers. We know that if we are flexible with our employees, we can retain staff, get better staff and get the best staff we need to do the jobs that we need to recruit for. As an employee, it is all about making sure that we can maximise our contributions as well. I returned to work after the birth of my second child on flexible working conditions. It was incredibly helpful for me, as an individual, to stay close to the labour market. I would like to see that available for more women and, actually, for more fathers as well, so that we can get the sort of shared parenting that we know also can be so beneficial for children.

The other thing that I would remind the Committee of when we are talking about flexible working is that it is not only for parents; it is for individuals with caring responsibilities more broadly. For many of us in the sandwich generation, we know that it is looking after our children and also our elderly relatives and parents ourselves that is going to be so demanding of time. For employers to recognise this context will help them both recruit and retain the best employees and maximise their economic productivity in the workplace.

Q482 Mike Crockart: You outlined particular examples; there is no arguing against them. However, I held a round-table with local women entrepreneurs and a lot of them basically outlined a situation whereby they ended up moving into entrepreneurship because they reached a certain level in large companies when flexible working was really quite frowned upon. It was not the lowerlevel jobs; it was actually the higherlevel jobs, where there is not so much presenteeism, but an expectation of putting in the extra hours. The job simply cannot be done in parttime hours. What can we do to deal with that level? We do not have rolemodels at the moment for the large numbers of parttime men or women at those sorts of level.

Jo Swinson: That is a really important point to highlight, because it may well be that flexible or parttime working can be provided in some cases, but there is almost sometimes a career penalty if that is taken up. This is particularly prevalent in some of the professional services and legal firms, where to get the very top levels and become a partner, this is often cited: that it is essential to be able to be working full time.

I was at an event recently with the 30% Club and there was an excellent piece of work that had been done by McKinsey on this particular issue and the perceptions about what is required and, indeed, that highlighted some of the things that can be done. The Government has a role in helping to encourage that debate, but I also think it is incumbent on different industries and sectors to look at some of the presumptions they make about what it takes to be a senior manager. There are, actually, increasing examples at very high levels in companies where either a jobsharing arrangement or parttime working can be very successful. They are not, however, ubiquitous yet. There is a challenge to industry to look more clearly at how this could be done. Organisations like the 30% Club are very much an important part of that debate.

There is some willingness on the part of many companies to look at this more seriously, partly because they recognise the drain in the talent they face if they do not get this right. One of the statistics I always find really interesting is, in terms of returning to work after maternity, it varies, between the best and the worst employers, between 50% and 99%. For organisations that really get this right, they get to keep their talented staff. Those that perhaps place less importance on being flexible and making it work face significant additional costs in recruitment and retraining-and losing a great talent and their knowledge of the business. The business case is pretty clear; Government is supporting the wide range of organisations that are pursuing this to make that very case.

Maria Miller: Can I just add a couple of points to that? I think it is really important that flexible working is not just parttime working and it is exactly that: flexibility around the needs, perhaps, of your family or of caring responsibilities. We would do very well to look at countries like Holland, who have very good working practices in this respect. One might leave the office at 4 o’clock but actually continue working in the evening to make up the time. The good employers are looking at how you do flexible working-not just parttime working.

These are the sorts of things the Women’s Business Council are looking at for us. I am very hopeful that they will come forward with some interesting responses when they issue their report in May.

Picking up on the issue of entrepreneurial work, I think this can exactly be a way that people with caring responsibilities, particularly women, make sure they stay in the labour market with good-quality jobs-by starting their own companies and by taking that entrepreneurial zeal and putting it into practice. That is why the mentoring scheme that we have set up is so important: to show women that this is an opportunity, this is a possibility and this is something that they can use to stay in the labour market and stay economically productive for this country.

Q483 Mike Crockart: I would have to say that you do not need to look at Holland; you just need to look at the women small entrepreneurs who are already doing exactly this. They are allowing employees to work from home and for work to fit with childcare. There are plenty of good examples. Coming back to one of the things that you said, Jo, you said it is working: that there are three in five and another one in five. If it is working, why are we changing the system to lessen that legislative role of it being on business grounds, and setting out instead minimum expectations and quality conversations between employers and employees? How is that going to improve the situation?

Jo Swinson: I want to clarify exactly what we are doing. We are making it simpler and easier for everybody involved. I was rather horrified when I was shown a flowchart of what had to happen when a business considered a request to work flexibly, and there were lots and lots of different steps, and then at this point this discussion had to happen, and then there would be a certain number of weeks before a response would be given. It was incredibly bureaucratic.

We are replacing that with a very straightforward, easy to understand set of guidance, so that employers know what they need to do in terms of dealing with the request reasonably and also employees can know what to expect. That is a useful and very welcome simplification that anyone looking at the current bureaucratic flowchart, and the new, very straightforward simple guidance, will be able to see is an improvement.

Another point that is worth making on flexible working is that extending the right to request to all, by definition, is not particularly helping people with children, because they already have the right to request. But that does help to change the default setting within organisations, because there sometimes can be a bit of stigma or resentment in a workplace where one set of employees who happen to have children have a right to request flexible working and others do not. There is a whole range of reasons why people might want to work flexibly: they might, for commuting purposes, want to miss particularly busy times of the day for travelling. They might be volunteering in their local community coaching a football team and have a particular afternoon when they are not working, but make up for that at some other point.

There is a whole range of different reasons. This change, by making it something that is applicable to everyone, will help to more widely change the culture. That will have a real knock-on impact for those who are requesting flexible working for caring responsibilities, in a positive way.

Mike Crockart: I absolutely agree with you. My experience of working in a large company was that there were individuals for whom there was a feeling of unfairness about a level of help being afforded to some but not to others. I think you are right that will help deal with that.

Chair: Can we move on? I am conscious Ann wanted to ask a further question, but I know Caroline has to leave, so I am going to bring you in now, and then come back to Ann.

Q484 Caroline Dinenage: I would like to talk about female representation on company boards. We had a number of witnesses about this, and we were quite surprised when one of our witnesses said that she felt quotas and meritocracy can exist together in terms of female representation on boards. We were surprised, because the majority of our witnesses had expressed a very different opinion about that. I just wondered what your views were on such positive-action measures.

Maria Miller: I think we have seen some really encouraging progress on this particular issue. We should start by saying there is a considerable amount of work to do here; women’s representation on boards is still woefully short. We have got a great deal of work to do, but the progress that has been made in the last couple of years is significant. Now more than 17% of FTSE100 board directors are women. Again, throughout that executive level we are seeing some good moves forward.

How do we make sure we keep that momentum and build on it? This is where we have a very tight set of work that is going to achieve that. There are the changes that have been1 made in the UK Corporate Governance Code, to ensure that, when it comes to boards’ reports, diversity is taken into consideration when boards look at effectiveness. From October of this year, we will also be requiring quoted companies to disclose the number of women at various levels within the organisation, to try to ensure that it is not just focusing on women in boards, but the number of women coming through in the pipeline. There is Think, Act, Report as well, which we have talked about quite a lot in our evidence today and which was launched back in September 2011, which is all about improving the transparency around how companies can be better in terms of gender equality issues.

This is an important set of measures, which will help throw a spotlight, for boards themselves but also for companies more broadly, on how they are going to encourage women through the pipeline. The final point I would make is it comes down to recruitment as well: ensuring that recruitment companies are conscious of this issue. I was pleased to see the voluntary code of conduct for executive search firms also playing an important part in ensuring that the number of women being put forward for executive jobs is taken account of.

All of these measures will help us improve the situation into the future. I can assure the Committee this is something we will be keeping a close eye on, and something that we will not be afraid of acting on if we do not see the progress continue.

Jo Swinson: I am not convinced quotas are the best way to achieve change. I can understand the arguments for them, but I think the approach that we have been taking has shown great progress. Now, that is partly because you have had the wonderful Lord Davies absolutely on board and personally going round to secure the support of individual FTSE chairmen. That has created real momentum around this at the very senior levels. That is why we have seen, since March, the appointments to boards of women being 36% in the FTSE250 and 38% in the FTSE100. Obviously there is an incumbency issue; it takes longer to change the overall figures, but in terms of new appointments that is very positive indeed.

Even in terms of the executive side, where it is more difficult to make change quickly, it is 9% for FTSE100 and 11% for FTSE250 since March. The Women’s Business Council will obviously have some recommendations about the pipeline, and those transparency issues that I mentioned earlier around company reporting should help with that. It is a complicated issue, and it is getting that real buy-in that is key. The Secretary of State for Business and I have held a number of round-tables around the issue of women on boards with a range of people, from recruitment consultants to women board directors and HR directors. All these different parts of the system have got a real role to play, but I think what we have is momentum.

Importantly, with that momentum, Lord Davies has made it very clear that he takes the view that if the 25% target is not met then quotas should be considered as something that could happen then. While quotas might not be the best way of achieving the aim, the threat of quotas, coupled with very positive engaging action, can be remarkably effective.

Q485 Caroline Dinenage: I wondered whether you were familiar with the Norwegian example of quotas; this was brought up quite a lot in the study, and what it demonstrated was that not only was the image of the women that had been put on to the boards affected-they were known collectively as "golden skirts", which is not very nice-but equally the shares of the company also dropped as well, and it had a financial impact on shareholder returns. I wondered whether you had a view as to whether that was because female quotas had been introduced, or just because of the speed at which it had been put in place?

Maria Miller: It is very difficult to be able to judge exactly what has caused that sort of reaction. All I know is that is not the reaction we want to have in this country. I think there can be no opportunity for people to say someone is not the best person for the job. The downside of quotas is that it leaves people with the opportunity to imply that it might be somebody who is not the best person for the job who is going forward, whether or not that is the case.

We are absolutely clear, as a Government, we do not want to run that risk. We believe we are making a great deal of progress with the voluntary approach that we have outlined here, but, as I have already said, we will keep a careful eye on what is happening to make sure that progress continues. I think importantly we will take learning from countries like Norway and others, who have looked at different ways of trying to achieve the same end results, and perhaps have run into difficulties along the way.

Q486 Ann McKechin: I do not think we could fail to ask the question about the issue of childcare, Minister. The Secretary of State mentioned a bit earlier good examples in Holland, but the one thing that distinguishes Holland from us is that childcare is much less expensive for many families. There have been lots of hints over the last few weeks by the Government about perhaps taking further measures during the course of this year to assist families with childcare. However, given the fact that, when you look at the issues of how the budget cuts and Government expenditure cuts have impacted on women compared with men over the last two years-women are estimated to take 72% of the cuts-what steps are you going to take this year to improve the situation for women who are trying to balance work and childcare?

Maria Miller: As a Government we are taking some extremely strong steps already, and I am sure there are more announcements to come on this. As a country we spend £2 billion a year already on supporting childcare, and my colleagues in the Department for Work and Pensions have already announced that an extra £200 million will be there to support childcare under Universal Credit for a group of families that have not had that support before-people who are working shorter hours, perhaps lone parents. That is an important support for childcare that has not been there before-making sure that work can pay for many, many more families.

We have also already extended the entitlement of 15 hours a week under the Early Years Free Entitlement to 40% of the most disadvantaged two-year-olds from September 2014-that announcement has already been made-as well as continuing to ensure that families can receive up to 70% of childcare costs through the working tax credits.

There is considerable support there. We are looking at how we can make that work even more effectively, because, as you will know, and as the Committee will know, we have some of the most expensive childcare in Europe. We want to make sure that parents receive the support that they need, but we also want to look at some of these issues around costs. We know that childcare is important, and it is something that is not only firmly on our agenda, but we are already acting on.

Q487 Ann McKechin: I can assure you it came across very clearly in the evidence we have taken through "Woman’s Hour" and Mumsnet-a demand for high-quality childcare through the state with primary support.

I have just one other question about the impact of the recession and Government cuts. Female unemployment has increased for adults at a very high rate: it rose 18% last year, compared with the adult male unemployment rate’s rise of 1%. Has your Department had any review or consideration of whether this is a long-term impact in terms of women? I know you have quoted figures about more women in work, but many of those jobs are part-time, temporary jobs, and many of the women would prefer to have better employment terms than they currently are able to secure. I wondered what study you are doing currently of the job market in this regard.

Maria Miller: I think it is important for the Committee to be very clear on this. Under this Government, there have been more women in work than ever before; we are at historic highs. Women’s employment now stands at 66%. While you are right to say the unemployment figures are doing as you say, much of this is because more women are putting themselves forward for employment. But under this Government we have seen record levels of women in employment.

You are right also to say that some of that will be part-time working; part-time working plays an important role in women’s employment, but I do not think we can see that as being always a negative.

Q488 Ann McKechin: There has been a very big increase in underemployment in this country, and a lot of that is coming from women, if you look at the statistics. They are losing good full-time jobs in the public sector, and, on the other hand, the jobs that might be available at the moment in the market are primarily 16 to 20 hours a week and on low wages.

Maria Miller: I would assert very strongly that many women do want to work part-time, but for those who do not, having a part-time job can be a stepping stone into the job that they do want in the future by retaining that link with the workplace, which is important. However, you are absolutely right: we need to ensure that people have the sorts of job that are bringing in the incomes they need for their families. We are very pleased to have seen, under this Government, 1 million new jobs created in the private sector, outstripping the number of jobs we have seen perhaps decline in the public sector.

These are very good trends, but you are right to say that we need to ensure that women can capitalise on these opportunities in the right way. That goes back to some of the issues that we have been talking about with regards to childcare availability, flexible working and shared parental leave-to ensure that women have a modern workplace that really does reflect their needs in the 21st century, rather than perhaps the workplace that has been far too much shaped by the needs of men in the past, and not shaped by the needs of women.

Q489 Chair: Just coming back to that response, you have quoted a number of headline statistics, but equally there is a mounting body of evidence to demonstrate that the statistics hide, as Ann said, a considerable amount of, shall we say, under-employment in terms of hours that a person works compared with what they would like to work and would need to work, and an under-contribution in terms of the economy arising from that.

Maria Miller: Chairman, you are absolutely right that our country faces great economic challenges. When it comes to employment, we know that there are many families struggling with unemployment and people struggling to get into the jobs that they want. That is why particularly the work that the Department for Work and Pensions is doing around the Work Programme to ensure that individuals are getting the sort of tailored support that they need to get into work-and that is whether they are female or male-can make all of the difference. I will certainly be continuing to watch closely the effectiveness of the Work Programme in supporting women into employment in the future, ensuring that they get that tailored support they need and also ensuring that is matched with childcare, availability of flexible working and also shared parental leave, as we talked about before.

Q490 Chair: When you come before us again, it might be quite helpful to outline the progress that has been made in this area. Can I just go on to the European situation and quotas? I do not want to rerun the discussion that we have just had, because your views on it are fairly clear anyway. How would you just summarise the Government perspective on the European position?

Jo Swinson: We take the view that this is an issue that is for individual countries to decide and to look at what action can be taken, not an issue that at EU level should be the subject of a directive, although we absolutely accept that there is a lot to be said for information sharing and sharing of best practice at European level. Indeed, my officials2 have already been to conferences where they have, alongside our European counterparts, shared the experiences of our progress and success so far on this issue, particularly in the light of Lord Davies’s review.

Obviously, what came out of the Commission was not exactly what had been first expected, because there had been significant concern by a number of member states about this issue in terms of whether it was something that should be for Europe to make a directive on. It is very straightforward; we have an approach that is working well, which we are happy to share with other European countries, but we do need to recognise that corporate governance structures in different European countries do vary significantly, in terms of even whether or not there are executive and non-executive directors. Having a one-size-fits-all approach is not ideal, so we should share best practice and experience, but deal with this on an individual country-by-country basis.

Q491 Chair: If the voluntary arrangements do not deliver, would you consider taking tougher measures?

Jo Swinson: Yes. That has absolutely been put on the record by me, when I gave evidence to the House of Lords, and by the Secretary of State for Business. Lord Davies himself has made clear that this is an approach that we believe can work on this voluntary basis, but that we have to be prepared, if it fails, to look at tougher measures. I hope that will not be required, and, as we know so far, we are slightly ahead of the trajectory to hit the targets.

Q492 Chair: What might those measures be?

Jo Swinson: Quotas would be one obvious option, which has not been ruled out, but we do believe that the action the Government is taking, supporting the excellent work by Lord Davies, by the 30% Club and others, is reaping rewards. Recruitment companies have changed their code of practice, and the range of different actions is changing behaviour. That is the way to get progress, but I suspect the possibility that quotas might happen will also help to focus minds within the industry.

Maria Miller: I would just add one point on that, which is that the level of female participation in the work force is very different in different countries in Europe. I would want to ensure that we are in control of our own destiny here, in terms of the way we can shape the role of women, particularly at board level in the future. The pipeline issues are things that are going to be important for us to tackle in a way that is relevant for Britain, and I am not sure I particularly want to get the waters muddied by having to follow a directive that has to take account of the very different circumstances in different countries.

Q493 Chair: I understand that, but if the uniquely British approach did not work, would you favour quotas? Would you support your colleague?

Maria Miller: I would certainly not rule them out, and I would want to ensure that companies knew that we were, as a Government, looking for real action here. It is only by making that clear that we can have the sort of effective action that is needed.

Q494 Mr Walker: We heard earlier the figure of 1 million private-sector jobs created, and in terms of job creation SMEs are crucial to the economic recovery of the country; SMEs are going to be crucial, in particular micro-businesses. Could you just set out what you are doing in respective Departments to specifically target support at SMEs and microbusinesses to ensure that the best possible life chances are there for the people who work in them?

Jo Swinson: We know that women do not set up businesses at the same rate as men, and if that happened there would be a huge boost to our economy. We are undertaking a range of actions to try to encourage women to set up businesses, and in particular the 5,000 mentors that have been trained specifically to help women are going to be able to make a real impact to guide people through what can be the very difficult early stages of setting up a business. We have a further £2 million investment to help rural women entrepreneurs, recognising there are often additional challenges in those circumstances, and, of course, the general business support that is available to everyone is available to women as well as men through business advice through local enterprise partnerships. We also have obviously been taking significant steps to try to encourage credit to small businesses that are viable through things like the Funding for Lending Scheme.

Maria Miller: Obviously, with SMEs and micro-businesses, if they are looking at flexible working and shared parental leave, an argument could be made that it is particularly tough for them to implement, because of their size and because they do not have the resources of large organisations. I just reassure the Committee that we are acutely aware, when we are looking at the sorts of measure we are bringing forward, that they really do have to work for everything from the smallest employer to the largest employer. It would be wrong for us not to think in that way, because the lion’s share of jobs in this country does come from SMEs and micro-businesses. If it does not work for them, it will not work for the boarder employment market.

Q495 Mr Walker: I think that is crucial. We had some varying evidence earlier on in our investigations about SMEs and flexible working. On the one hand, some people were wary of the burden of regulation; on the other, a lot of the SME representatives we spoke to, and particularly the Federation of Small Businesses, were making it clear that they felt SMEs were better at this than a lot of larger organisations and already well placed to deliver on it, because they are that much closer to their staff. Do you have a view on that?

Maria Miller: I would say, having been an employer in the past-indeed, an employer now, even as an MP-the USP that you have as an employer to say that you can offer flexibility I think is something that is valued by employees. The figures speak for themselves when it comes to retention of staff; those SMEs that really do offer good flexible working can see that loyalty increase, and then obviously the reduced costs in recruitment are only one of the valuable by-products of that.

Jo Swinson: Of course, one of the advantages that small businesses have is that in a much smaller work force people tend to know each other better, and so every member of staff will feel happy to chat to the managing director and people know about each other’s lives in a way that is much more possible than in an organisation with several hundred members of staff. In fact, the flexible working requests were often happening long before the right to request even came in.

What we are doing will help small businesses by changing it from a very bureaucratic process with many different steps to a straightforward page of simple guidance. For any of those small businesses who have not yet had to deal with flexible working, there will be something that does not take them ages and ages to read and is very difficult and bureaucratic to follow; it is something that is straightforward, which is just how business would want it to be.

Q496 Rebecca Harris: I was going to ask a little bit about that. Further on this, one of our witnesses said that the Government need to be doing more to invest in helping small firms to recruit and retain part-time flexible workers, and asked whether you were doing anything other than making flexible working less bureaucratic. Is there anything concrete the Government is doing to invest and try to help small firms recruit?

Maria Miller: One of the things that we are doing to support people who may be working part-time on lower incomes is the work that we are doing through Universal Credit to support people with childcare costs, who may be working shorter hours on lower incomes. That extra £200 million will be a really tangible way that we can support people who are perhaps working non-full-time hours; in the past, that support has not been available. That is a very tangible way of supporting businesses in that way.

Jo Swinson: Obviously, related to that, for anybody that is working perhaps on low wages and on a part-time basis, they are particularly likely to be positively affected by the changes to the income tax threshold as well-taking 2 million people out of tax, six in 10 of whom are women, and giving 23 million people on low and middle incomes a tax cut. That is something that makes work more attractive, which, for some people, will help to tip the balance in favour of going out and finding work and making the economics work, particularly if they have other costs, such as childcare costs, that they have to factor in. That certainly should be of assistance to those businesses too.

Q497 Rebecca Harris: My final question is about the strains put on businesses from maternity leave, particularly if you are a small firm. One witness came and said they had had 13 births in their relatively small company in one year. In particular the issue was the right of the mother to not have to say when they are coming back, which was considered to be particularly burdensome, particularly to small firms. Do you have any thoughts on that, and are you looking to see if that should be changed in the future at all?

Jo Swinson: It is really positive to be able to talk about the changes; I know we have talked about flexible working, but we have not yet particularly touched on shared parental leave, which is separate to the flexible working changes that the Government has committed to bringing in. They will also help businesses in this circumstance, because allowing mums and dads to choose how they share that leave will have the very positive benefit of enabling dads to be more involved in the early weeks and months of their child’s life, which many want to do. In addition, many mums who want to maintain more of a link with the labour market and maybe go back to work earlier than a year will not have lost that additional parental leave time.

If the parents want to share parental leave, and have time off together when the baby is born, by definition the mum is going to have to say at the beginning when she intends to stop her maternity leave, so that the flexible parental leave can be triggered. That will be one way in which businesses will be helped and, of course, you cannot get away from the fact-and obviously you have had somebody whose business had 13 births in recent times-it is inevitably going to be disruptive to a business. As an employer we experience it as well; if members of staff have maternity leave it is disruptive.

At the same time, we live in a society where we are all going to face significant problems, society and business alike, if people stop having children. Where are the future workers and customers going to come from? Given that we are not going to go back to the 1950s, when it was just expected that a woman would stay at home and look after the children, and our economy is based on using the talents of women in the work force, we need to find a way in which we can deal with maternity and parental responsibilities alongside work commitments.

I think that greater flexibility means that there are now increasing cases where, within a couple, the mother is the higher earner, and it may make more economic sense for that couple for the dad to spend more time at home looking after the child. At the moment, that is much more rigid and difficult to do. So for those companies employing those women, they would see that they would not be losing a key member of staff for anything like the same amount of time. The sharing of that time for childcare is something that will be helpful, but, of course, businesses will retain the right to reject a particular, unusual pattern of taking that parental leave if that is something that does not work, and if it is easier for them to require the mum and dad to take it in a single specific block, they will still be able to do that.

That said, the flexibility will also have significant business benefits. Very often if somebody is on maternity leave, but there is a key industry conference coming up, or a key project with a client that that particular employee had a relationship with, the ability has never existed before for that employee to come back for a two- or three-week period to go to the conference and keep their information and contacts up, or to bid for a particular piece of work, and then retain the maternity leave and resume it afterwards. At the moment, that is just not allowed in law. The additional flexibility should be good for business as well as good for families.

Maria Miller: Just to add one very final point on that Chairman, in this country now 60% of our graduates are women. This is not an issue that is for a small group of the work force; this something that affects half our work force, because half our work force in this country are women. We have to ensure that maternity rights are brought up to date, and this is one additional example of how the Government is trying to achieve that. The birth of children, bringing children into the world and bringing up children are not just for women; it is something that men should share in as well, not just because it is right for children, but because it can help women to stay close to the labour market, which increasingly helps the economic success of a family.

Chair: First, can I thank you very much for your contribution? I have made it clear, as part of my approach to monitoring Government policy and outcomes, that we want to look at an issue, and we do not just publish a report, look at the Government response and move on. This is obviously an ongoing issue that will require monitoring as we go along, and we, as a Committee, are keen to make the sort of recommendations that will address this agenda.

You quite rightly pointed out that 60% of graduates are women; that represents a huge public investment in women’s education. If we are not obtaining the dividend that comes from that investment, then that does require a really comprehensive examination of what changes need to be made in Government regulation and in the way that business operates in order to fulfil that potential. I believe the previous body that we interviewed identified something like £15 billion to £21 billion-worth of lost output as a result of it. There are huge potential benefits to the country and it is absolutely essential that we get it right. We look forward to interviewing you on future occasions to see just how you are delivering on it. Thanks very much.

Maria Miller: Thank you.

Jo Swinson: Thank you.

[1] FRC code – it was the FRC that made the changes, it is an independent Code

[2] This involves officials from a number of government departments and not only BIS.

Prepared 11th March 2013