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However, I have some concerns about the specific contents of parts of the Private Member’s Bill and about the overall approach. In recent years, we have made great strides on this agenda, but it is important to understand that that has been the result of combining a clear commitment to the goals of equality and fairness at work and working to build a consensus wherever possible for each and every policy change. It is tempting, and in some ways easier, to strike out with a seemingly bold gesture and even to put it into legislation, but without broad-based support, it may not deliver the real change in practice and outcomes being sought. Legislation is only part of the process.
A range of matters interlock the issues affecting women's pay and their ability to stay in work after the birth of children. There is no easy answer. Frankly, if there were, we would have tried it by now. As my noble friend Lady Prosser has outlined, the reality for women at work is very complex, starting, of course, with low pay. The effect of the national minimum wage was much more marked for women than for men and is probably the most crucial factor affecting women in work. It was introduced in a detailed and consensual way, save for the Conservatives opposing the idea, although I recognise and welcome their change of view. It pulled in support from employers, unions and many other groups in the Low Pay Commission. It was a detailed and long piece of work.
The effect of the minimum wage, together with working family tax credits and childcare assistance, has made it financially possibly and sensible for many women to work, whereas previously they would have been better off on benefits and so denied the role in the workplace which they wanted. Then there were fair rights for part-time workers, introduced in 2000 after long consultation on the practicalities of the changes for employers in all sectors. The majority of those benefiting from those new rights are women.
The right to four weeks’ paid holiday was particularly important for women, who were often denied that until it became a legal right, and the more recent increase to 4.8 weeks has primarily affected low-paid women who were, in effect, being cheated by having bank holidays included in their four weeks. Again, one could argue that it was introduced more slowly than many would have wished, for understandable reasons—of course, people want speedy progress—but that legislation and the way it was done has led to a manageable change for employers and real progress for many women who are in part-time, low-paid jobs.
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The extension of maternity leave and pay and the extension of paternity rights have contributed to a change in attitudes, as well as a change in reality, to the needs of parents of young children and to the well-being of children. Each step has demanded huge negotiation and persuasion.
I turn to an issue in the Private Member’s Bill, the introduction of the right to request flexible working. That was developed through the Work and Parents Taskforce which painstakingly, and sometimes painfully, pulled together those with different views to produce a workable outcome. It agreed that the right would extend to parents with children up to the age of six and disabled children up to the age of 14. Of course, many people then and now wanted a stronger right and, of course, many employers did not want any change at all. I remember very clearly, as I am sure many noble Lords do, that when the Bill was introduced in 2003, some said it would achieve absolutely nothing. It was then extended to carers of adults. In all, that change has introduced the right to request flexible working to over 6 million parents. Many parents have exercised that right and crucially it has assisted to bring about a change in attitude in many companies. Nearly 80 per cent of women entitled to request flexibility have done so. So a measure which was both ridiculed and opposed has been a dramatic step forward.
I turn to the specifics in the Bill. First, on the proposal to remove the upper age limit of a child for the right to request flexible working, it sounds great to go even faster and further, but the current age limit is six. The Work and Parents Taskforce, which produced the original policy of age six, argued that legislation should be linked to a significant point in a child's schooling. The recent Walsh review also thought that approach was sensible, so the next natural break after six would be 12 to cover the transition to secondary school, a major event in all children's lives, or 16 to cover GCSE year. The review recommended 16 but rejected 18. The Government have announced that they are going for the bolder move of 16. I probably would have gone for 12 and then built up support for 16, although I understand that the legal position for 12 year-olds is somewhat ambiguous. The NSPCC recommends not leaving children under 13 alone except for a short time. However, crucially the Walsh proposal has been fully consulted on, and employers' organisations think its rollout is challenging but manageable. Perhaps I am pushed towards a more measured rollout because, over the years, I have spent too many hours in too many long and detailed negotiations. If we have broad-based agreement for age 16, we should move forward on that. The CBI points out that over 90 per cent of requests are currently met, but over 20 per cent of employers feel that there has been a negative effect on productivity. Many employers are largely positive, but there is a particular challenge for small firms. The CBI opposes the extension to 18 as being likely to have a negative effect on business, but accepts and will work with the recommendations of the Walsh report.
On equal pay, I understand the temptation to seize a simple-sounding solution. We feel somewhat desperate at times about making progress in this area, but I question the content of the Bill on it. There is a danger
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Finally, I confess that I am a bit puzzled about why the Bill is being introduced now. Most of the measures I outlined earlier were opposed by the Opposition. I shall not bore the House with the many prize quotes from the Opposition in another place outlining why most of these policies were crazy and/or dangerous. Indeed, David Cameron voted against the introduction of the right to request flexible working for parents with children up to the age of six, so this is something of a Damascene conversion on his part. If there is a genuine change of heart, that is to be welcomed, but rather than propose measures in a way that, frankly, could be described as gestures, why not approach this agenda in a genuinely collaborative way? All the crucial measures introduced since 1997 have been done by forging sensible alliances to introduce practical, progressive moves forward and, especially, changes in culture. I strongly recommend this approach to the noble Baroness, who I know is seeking the changes in the workplace that we all want.
12.43 pm
Lord Lester of Herne Hill: My Lords, we are all grateful to the noble Baroness, Lady Morris of Bolton, for introducing the Bill and we share her aims. I am sorry to say that there are some fundamental flaws in the Bill, which I shall explain later, but we hope it will act as a spur to a new, reforming equality Bill to be introduced by the Government. The debate has been greatly enriched by well informed, powerful contributions by Members of the House of both sexes with great experience, to whom I pay tribute. If I do not refer to all their speeches, it is simply because of the time factor.
We all agree that the principle of equal pay between men and women must at last be achieved in this country to avoid women being exploited as a source of cheap labour. We need to use the skill and talent of the entire workforce, including women and men who combine motherhood or fatherhood and childrearing with paid work. Those are the values underpinning the Bill. Barbara Castle’s Equal Pay Act was unsatisfactory from its birth. As the noble Baroness, Lady Prosser, said, it was a busted flush, and there is a need for
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Although the noble Baroness, Lady Thatcher, made her maiden speech on equal pay, her Government did nothing at all until they were obliged by the European Court of Justice to provide for equal pay for work of equal value. The regulations that were introduced in the Commons by a drunken Alan Clark were strongly criticised by the Equal Opportunities Commission, on my legal advice, as being incompatible with European Community law. The noble Baroness, Lady Howe, will remember that when the regulations were debated in this House, the noble Lord, Lord McCarthy, remarkably moved an amendment declaring,
- “that this House believes that the regulations do not adequately reflect the 1982 decision of the European Court of Justice and Article 1 of the EEC Equal Pay Directive of 1975”.—[Official Report, 5/12/83; col. 886.]
Apart from the Conservative Minister—I say Conservative so that we will remember who was on which side—no one spoke in support of the regulations, and the amendment was carried against the Government by four votes.
Lord Denning, who decided key cases on equal pay in the Court of Appeal, referred to Barbara Castle’s Act as “deplorable” because:
“Its tortuosity and complexity is beyond compare”.—[Official Report, 5/12/83; col. 901.]
He pointed out that the regulations were not clear, intelligible or capable of being understood by ordinary people and ordinary tribunals. Since then, no Government have introduced legislation that would provide effective remedies for sex discrimination in pay.
I was instructed by the noble Baroness, Lady Kingsmill, and others in the speech therapists’ case. It took 11 years for a group of speech therapists to compare their work and pay with those of hospital pharmacists and clinical psychologists. By the time the case was finally decided, all the documents had been lost, the women and men concerned had died, retired or changed their work, and the remedies that were awarded were of no practical value. The poor old union had had to accumulate thousands of individual claim forms because the procedure is ludicrous and it is not possible to make a collective claim on behalf of a group of people. It was indeed a busted flush.
Women still earn significantly less than men; they face substantial penalties for doing part-time work, for taking time out of the labour market and for reducing their hours to care for relatives. As the noble Baroness, Lady Morris, noted, men are paid 17.1 per cent more than women for full-time work. The pay gap is even wider in the private sector, at 21.7 per cent. The disparity in part-time wages is 36.6 per cent and, to answer the question asked by the noble Baroness, Lady Howe, Britain has been placed 81st in the world on progress on equal pay for equal work.
Women's educational attainment is higher than that of men, but that success is not properly reflected in their pay. We are squandering women's skills and
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I have great admiration for the Minister. Indeed, I have wanted for some time to talk to her about all this. I hope that she does not share the lukewarm approach to reform of equal pay taken by some of her colleagues and advisers. The Government have not yet shown signs of recognising that the Equality Bill must replace the 1970 Act with equal pay provisions that work in practice. So far, there has been a minimalist approach; they wrongly believe that that is in the interests of business enterprise. That is profoundly mistaken. Equal treatment without discrimination furthers the aims of business enterprise by tackling unfairness and inefficiency in the marketplace.
Clause 1 of the Bill would amend the employer’s defence under Section 1(3) of the Equal Pay Act by making it a defence to an equal pay claim that a pay difference between a man and a woman is,
Under Section 1(3), read in isolation from European law, where employers seek to explain the difference in pay between a man and a woman who are doing like work, equivalent work or work of equal value, they must show that the difference in pay is genuinely due to a factor that is not the difference of sex and that the factor is material—that is, significant and relevant. An employer cannot explain the difference by relying on a factor that is directly discriminatory, in that women are treated less favourably than men. Under the present law, employers are not permitted to argue that a directly discriminatory factor is objectively justified.
If the difference in pay is indirectly discriminatory, because it has an adverse disparate impact on workers of one sex, it cannot be relied on by the employer unless it is objectively justified. That means under European law that it must be shown to be appropriate and necessary in accordance with the well known European principle of proportionality. In other words, the employer must show, because of European law, that the means employed are proportionate to the employer's aim.
Clause 1(2) is fundamentally flawed for at least three main reasons. If the Minister disagrees with me, I hope that she will explain why. First, it would in some circumstances place an increased burden on employers, because they would be required to satisfy the test of reasonableness even in relation to factors that are not discriminatory. Ironically, that would add to the employer's burden quite unnecessarily. Secondly, it suggests that factors that are directly discriminatory would become open to justification as being reasonable, yet it is quite clear that under EC directives and as a fundamental tenet of our domestic discrimination law, you cannot justify direct discrimination. Thirdly, and perhaps most importantly, it would substitute a weaker test of “reasonableness” for that of objective justification in cases of indirect discrimination. As the noble Baroness, Lady Prosser, and others have said, that would clearly be incompatible with Article 141 of the treaty and the equal pay directive.
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In other words, Clause 1(2) would not simplify but undermine the effective enjoyment of equal pay for equal work. Therefore, I agree with the noble Baroness, Lady Gould of Potternewton.
Clause 1(3) proposes that, where employers are found to have breached the Equal Pay Act, they should be required to conduct and publish a pay audit. I agree with the noble Baroness, Lady Prosser, that that would not be of any great practical value. The case for mandatory equal pay audits recommended in the Hepple report and included in my Equality Bill has, I hope, been made out, provided that it is applied in a flexible and sensible way and only to large and medium-sized employers, and provided, as the noble Baroness, Lady Gould—I think—said, there are transitional measures to allow employers and the trade unions in good faith to move towards equal pay, where the audit discloses problems that need to be dealt with in an orderly way.
The current law’s reliance on individuals bringing equal pay claims to bring about widespread equal pay has not succeeded in achieving its objective, as several noble Lords have pointed out. Not only does the system fail to bring about equal pay, it clogs up the tribunal system with hundreds, perhaps thousands, of women lodging complaints about the same employer and the same set of facts, as in the speech therapists’ case. Pay systems are just that: they are systemic. Only a comprehensive pay review based on an audit of the entire pay system will bring about the necessary change.
I remember, in one of the early equal pay cases in the House of Lords, one of the Law Lords saying to employers that that case should warn employers to look at their pay systems properly, identify where there are clusters of women in particular parts of the sector and make sure that they eliminate direct and indirect discrimination in pay. That has not happened and, because of that, local government employers, for example, have accumulated vast liabilities for damages, which now put them at serious risk of not being able to do their other jobs properly. The use of the audit is so that the employer knows what is happening and can take remedial steps rather than accumulating vast liabilities. It also keeps the lawyers away, one hopes.
The voluntary approach to equal pay reviews has had little impact during the 38 years since the Equal Pay Act was enacted. A survey published last year by the Equality and Human Rights Commission found that only 23 per cent of private sector organisations had completed or were planning an equal pay review, compared with 43 per cent in the public sector. Successful equal pay claims are notoriously difficult to bring and require employer and employee to go through a tortuous and lengthy procedure. Requiring only those employers who have lost in an employment tribunal to undertake an equal pay audit is punitive and is not an effective means of bringing about the necessary change, as several noble Lords have pointed out.
Press reports suggest that the Government are now proposing to require public sector employers to publish the gender pay gap within their organisations; that is, to compare the average pay of men and the average pay of women. I hope that that is incorrect—it seems to me to be dotty; it would be a crude measure and of little practical value to address the underlying problems
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Like all other noble Lords who have spoken, including the right reverend Prelate the Bishop of Southwark, who made a powerful speech, we strongly support the principle of flexible working for the reasons expressed by, in particular, the noble Baroness, Lady Morgan of Huyton. She made me think about whether we need to consider age limits much more carefully. I therefore cannot say that we give unequivocal support to this proposal, although we obviously support the principle of flexible pay.
We look forward to learning from the Minister the Government’s views of the Bill and whether she is authorised to tell us what the Government think is the best way forward to secure equal pay and eliminate sex discrimination in the workplace. The noble Baroness, Lady Vadera, has been unfairly attacked for observing green shoots in the economy; I hope that she will be able to share her vision of springtime in Whitehall in this important area.
12.57 pm
Lord Hunt of Wirral: My Lords, I begin by declaring the interests shown in the Register.
I rise enthusiastically to support this Bill. I am delighted to do so from the opposition Front Bench. My colleagues and I want to see such legislation on the statute book as soon as possible. I congratulate my noble friend on introducing this measure, which seeks to strengthen existing equal pay legislation—to give it more teeth in the face of continuing unfair treatment. My noble friend has a remarkably impressive record of taking up the issues of equal pay for working women as a Member of this House, in her political career outside this place and as a working woman and mother.
I was very pleased when my friend and colleague, Theresa May, launched her campaign for equal pay for women. We have had a very important debate. Many constructive points have been raised and must now be carefully considered. I strongly support the bid to obtain cross-party support for such a measure. I was delighted to hear from the noble Lord, Lord Morris of Handsworth, a rather impressive social and economic case for supporting the Bill. I reflected that when I was invited to the TUC summer reception, several of our colleagues in the trade union movement were getting very concerned about the legal side to this and the way in which it was becoming a bit of a paradise for lawyers. But we are now reassured by the noble Lord, Lord Lester of Herne Hill, that we are going to keep lawyers away. We look forward to his assistance in ensuring that.
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There were a number of concerns about the detailed provisions of the Bill. Three successive speakers, the noble Baronesses, Lady Gould, Lady Prosser and Lady Morgan of Huyton, raised some important points. Although I disagree with some of the perhaps political elements of what they said, we should carefully reflect on a number of those concerns about detailed provisions. Perhaps I may say that the noble Lord, Lord Lester of Herne Hill, painted a rather partisan picture of the past. However, it is important that I remind the House that when I was Secretary of State for employment, I said:
“Discrimination against women is not only inefficient, it is clearly wrong”.—[Official Report, Commons, 10/3/94; col. 434.]
I believe that so strongly. Equality of opportunity is a vital principle, so is equality of treatment and remuneration. Whether one terms it as equality, diversity or just fair play, women must be given every opportunity to fulfil their potential. The points raised by the noble Baronesses, Lady Prosser and Lady Gould, about upskilling and ensuring that our education and training process gives an equal opportunity to women were so important.
The words “fair play” are the English translation of the title of the “chwarae teg” programme I introduced when I was Secretary of State for Wales, in combination—I reflect on the presence of the noble Baroness, Lady Howe of Idlicote—with Opportunity 2000 and the Equal Opportunities Commission. I strongly agree, as I agreed then with the noble Baroness, that progress seems to be appallingly slow. We have to do something about that.
Fifteen years ago, I was able to point to both real and relative growth in the hourly rate for the female working population. Over the previous 15 years, it had risen by 55.9 per cent, as compared with 40.4 per cent for the male population. But we have seen too little progress in the right direction since. As several noble Lords reminded us, men still get paid more than 17 per cent more than women, meaning that over an average working life a woman will lose or forgo a massive £300,000. This pay gap exists not only in low-paid, part-time jobs: women working in full-time jobs also earn less than men, as was also pointed out.
I was concerned when I read that, recently, Catherine Rake, director of the Fawcett Society, the women’s campaign group, said:
“After years of painfully slow progress in closing the pay gap, we have now actually gone into reverse gear, with the pay gap widening for women working full and part-time”.
These are worrying facts and we have to reflect on how we will overcome them. It is important that we tackle the pay gap not only by passing a law, but also by raising awareness, particularly among young people.
Some important points have been made about flexible working.
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