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Lord Lester of Herne Hill: My Lords, perhaps I may make clear that I am not politically partisan on this issue and that I fully recognise that previous Conservative Governments have been as derelict as the present Labour Government in not tackling this issue. In the past, there have been green shoots; for example, in Northern Ireland a progressive law was
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Lord Hunt of Wirral: My Lords, I agree with the last words of the noble Lord and I hope that the whole debate has reflected a cross-party and non-partisan approach. However, I felt that I had to put the record straight, and indeed I welcome the opportunity to do so.
I note the comments of the right reverend Prelate the Bishop of Southwark on flexible working, which were absolutely on the ball. Flexible working can make a huge difference to family well-being. As the noble Baroness, Lady Gould of Potternewton, reminded us, individual performance improves when there is flexibility in the working environment. However, I fear that many UK businesses will struggle to survive the next 12 to 18 difficult months. There will be other occasions on which we can discuss why that has happened and what needs to happen now. I have listened carefully to the concerns of the CBI and British Chambers of Commerce and was pleased to note in the CBI’s briefing on the Bill a reminder of its view that discrimination is inexcusable. Although both organisations have concerns about the detailed provisions, they support flexible working practices and recognise that they can be particularly useful to businesses during a downturn.
As we proceed to the Committee stage, we must reflect on how this legislation can be improved. However, as businesses struggle to survive, they will greatly enhance their chances of success if they truly embrace fairness, allowing each and every individual to realise his or her full potential and then receiving full and fair recompense in return. I support the Bill.
1.07 pm
The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform & Cabinet Office (Baroness Vadera): My Lords, I join other noble Lords in thanking the noble Baroness, Lady Morris, for giving us the opportunity to discuss the issues addressed in this Bill, and for her passion for and the contribution she makes to this area. From the Government’s perspective, we believe that the House ought to consider some of the points in the Bill. It proposes two changes to the Equal Pay Act 1970, but as other noble Lords have remarked, these proposals come before us just as the Government are preparing their own equality Bill to bring together all existing equality legislation, including equal pay. That Bill was promised in our manifesto and included in the Queen’s Speech as a sign of our commitment to these issues. We will be bringing it forward as soon as practicable. We are of course grateful to the noble Lord, Lord Lester, for his work on our Bill and I can assure the noble Lord of our enthusiasm for equal pay not just as an issue of social justice, but in terms of economic productivity.
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Lord Hunt of Wirral: My Lords, in welcoming the noble Baroness’s reply to this debate, it would help if she were able to offer a little more clarity on when the equality Bill is to be introduced.
Baroness Vadera: My Lords, we believe that the Bill will be published in the spring. When further details become available, I shall write to the noble Lord. We are carefully considering how the law on equal pay will be framed in the new legislation. This will include the grounds on which differences in pay for equal work can be justified, a subject also addressed by the noble Baroness’s Bill. Under existing law, for a difference in pay between a man and a woman doing the same work or work of equal value to be justifiable, the employer must be able to point to a genuine material factor that is unrelated to gender. As has been said, London weighting is such a material factor, and must be both significant and related to the difference between the contractual terms of the female and the male comparator. The employer therefore has to show that this is the reason for the disparity in pay. I therefore wholeheartedly agree with the three reasons sharply articulated by the noble Lord, Lord Lester, as to why adding a reasonableness element to this test would not be helpful. It would potentially require an employer to be ready objectively to justify as reasonable any reason for a difference in pay between a man and a woman doing equal work even where the reason for it is not discriminatory, whereas at the moment it is necessary to do so only where the fact in question is tainted by indirect discrimination. This could increase the number of potential claims and the burdens on business, and could lead to extra, unnecessary complexity without adding to the protection provided to women.
In our Bill, we intend to clarify the way in which the current law works. I cannot better the compelling arguments made by my noble friends Lady Gould and Lady Prosser, based on their lifetime experience in this area, about the unintended consequences in relation to this and the second element in the Bill, which requires that when there is a breach of an equal pay requirement an employment tribunal should be required to order an equal pay audit. Under this proposal employers would be required to carry out an equal pay audit even if they had recently undertaken one or if the case did not have implications for the majority of employees in the organisation. The impact of this proposal would therefore be disproportionate in most cases.
A study carried out for the Equal Opportunities Commission in 2005 found that a typical audit in the private sector cost the equivalent of three to six months of a full-time member of staff time. Nor would it have a significant impact on the gender pay gap. It would have applied to only 125 equal pay cases in 2006-07, the latest year for which figures are available. This equates to only 2 per cent of the total number of equal pay cases in that period.
In preparing our equality Bill, the Government have carefully considered the case for all employers to carry out mandatory equal pay audits. We have concluded that while equal pay audits can be useful as a way of exploring unfair pay practices in some circumstances,
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The Government’s equality Bill will therefore increase transparency by banning secrecy clauses that prevent people discussing their own pay; by ensuring that public bodies report on equality issues, which will enable targeted and effective action; and by extending the scope for positive action, which will give employers a chance to make their workforce more diverse when choosing between two equally suitable candidates.
Our Bill will strengthen the law in a way that will have a real impact on the gender pay gap without imposing unnecessary burdens on business. We therefore look forward to the support for the Bill of the noble Lord, Lord Hunt, in the light of the comments he has made.
Lord Lester of Herne Hill: My Lords, will the Minister reflect afterwards on the value of equal pay audits of a non-heavy and non-bureaucratic kind as a preventive measure in order that employers understand the problems they have and take remedial measures in advance? She has presented it so far on the basis of what the Opposition have put forward, but there is a preventive way of doing it which is much better than measures leading to law suits. Will she reflect on that?
Baroness Vadera: My Lords, noble Lords will be aware that discussions are ongoing. I am sure that the noble Lord will not only be consulted but will have the chance to debate this issue during the course of the Bill.
We are proud of our record on family-friendly policies and the flexible working policy, which is founded on careful evaluation and thorough consultation. It balances the needs of employees and employers; it contains the right to request, not the right to have, but with the employer having the obligation to consider all requests seriously. Evidence suggests that they do so: 91 per cent of all requests are accepted, and 95 per cent of workplaces say that at least one flexible-working arrangement is available to employees. Some 56 per cent of employees say they have worked flexibly in the past 12 months.
Businesses recognise the benefits that flexible working can bring. The Institute of Directors said in its 2008 report that all the measured impacts of flexible working were deemed positive, including productivity, profitability, customer service, recruitment, retention, absenteeism, overhead costs, morale, teamworking and knowledge sharing. Working with business on our flexible working policy has underpinned our success so far, and noble Lords have commented on the CBI’s position in that regard.
The noble Baroness asked about the number of fathers requesting flexible working. I am pleased to say that it has broadly doubled. The figures are available and we would be happy to provide them.
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We will continue to work closely with employers as we embark on this next phase. As my noble friend Lady Morgan has explained, we had a review last year by Imelda Walsh, the HR director of Tesco, who considered evidence from a wide range of sources including interviews with business organisations, unions and family groups.
Baroness Prosser: My Lords, I am sorry to interrupt but, just as a matter of record, Imelda Walsh is the HR director of Sainsbury’s.
Baroness Vadera: My Lords, I apologise for getting my retailers mixed up. I am glad to be corrected on that point because I am sure she would not have been happy.
The review was well received after full consultation and it concluded that extending the right to request to parents of children up to the age of 16 would allow them to support their children through their GCSEs. It stressed the growing importance of exams and highlighted that some parents will want to work more flexibly, on either a permanent or a temporary basis, to help their children prepare for them.
Imelda Walsh rejected a smaller extension to the age of 12 because of the importance of enabling parents to support their children through their early teenage years. She also rejected a wider increase to 18; representations to the review suggested that parental need for flexible working at this time is weaker. She recognised that young adults aged 16 to 18 can be expected to take greater personal responsibility than younger teenagers, whether in education, training or a first job.
She highlighted that the increase to 16 would be sizeable and the single biggest increase in the number of employees entitled to the right to request, from over 6 million now to over 10 million from April. Furthermore, official data show that the labour outcomes for mothers aged 16 and under in particular can be compromised by trying to balance their work/life commitments. Female employment rates rise steadily by age of youngest child. By 15 they are still only around 50 per cent, but when the youngest child reaches 17 almost 70 per cent of mothers are at work. It is therefore right that we focus on parents of children up to the age of 16 where there is a real need to be met.
I recognise that some wish us to go further than that amount, but I hope the noble Baroness will recognise the representations that have been made from all sides. There are also others who would prefer us to delay. The Government have carefully considered all the arguments but continue to believe that the extension to 16 balances parental need with business requirements and is a fair outcome for both parties.
We have recently consulted on how to implement the extension and our response is due to be published shortly. The extension to flexible working will be introduced from April 2009, and an extra 4.5 million parents in Britain will gain new rights to request flexible working. This is a significant achievement and, we believe, the right way forward. The noble Baroness, Lady Morris, will no doubt recognise that there are some serious considerations of elements of her Bill but that we have to take a balanced view.
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We look forward to building cross-party support for our equality Bill. I am very proud of this Government’s achievements. We are a party with three times as many female MPs as all the rest put together. We have introduced longer maternity leave, paid paternity leave, the right to flexible working and other measures, including the national minimum wage and tax credits, that make a huge difference to the lives of millions of women. Those measures have been opposed by the Opposition.
I assure the House that we will show the report of the debate to all the relevant Ministers across government. I shall also ensure that relevant officials follow the progress of the Bill through the House.
1.20 pm
Baroness Morris of Bolton: My Lords, I am most grateful to everybody for taking part. It has been a wonderful debate and I look forward to reading all your Lordships’ contributions in Hansard, because they merit it. I thank the Minister for her comments. I, too, applaud all that the Government have done for women and for families—I think that we can now take that as a given. I thank her also for alerting us to the fact that the equality Bill will be published in the spring. We had been led to believe that it would not be before the summer, so it is welcome that we will see it sooner rather than later. I look forward to working alongside my noble friend Lady Warsi on it.
The Minister went into great detail, for which I am most grateful. As this is a complex area, as many noble Lords have said, I look forward to reading exactly what she said. Although we may not agree on the detail of my Bill, I found myself agreeing with much of what the Minister said.
I thank my noble friend Lord Hunt of Wirral for his fulsome support for the Bill. I am grateful to him for pointing out that equal pay and fairness have long been part of the lexicon of the Conservative Party, even though there seems to be collective amnesia in some areas. However, I agree with the noble Lord, Lord Lester, that these issues should not be partisan.
I thank the noble Lord, Lord Lester, for his support for the aims of the Bill and take on board his comments about it being fundamentally flawed—although I am not quite sure how he accommodates both those sentiments so well. I am not a lawyer; I am simply married to one, although he had nothing whatever to do with the Bill—being a judge, he has to be very much above party politics. I look forward to the assistance of the noble Lord, Lord Lester, in later stages, especially with regard to light-touch audits. That is an interesting area that we could explore.
On reasonableness, I can say only that various lawyers have helped on the drafting, which I am told is used in countless legal situations and arguments, including the Unfair Contract Terms Act 1977 and other parts of employment law. I would be most grateful if the noble Lord, Lord Lester, did not intervene on those points, because I would not have an answer to give him, but I am told that reasonableness is expected there.
I take on board the point made by the noble Lord, Lord Morris of Handsworth, however, that the test of reasonableness could be a lawyers’ paradise, although
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When the noble Lord, Lord Morris, said that he agreed with everything, I thought of how, in these difficult times, people sometimes seem to be on different sides of the argument. We had a wonderful supper together the other night, when as a good Tory I bemoaned the fact that I banked with the RBS, which is now almost entirely owned by the Government, and that my mortgage is with the Britannia, which has now merged with the Co-operative society. The noble Lord, Lord Morris, said that for all his life he had been campaigning for a mixed economy, but he never thought that it would be the banks that were legalised and the Post Office that was privatised. It just goes to show that, in these times, arguments really are all over the place.
I congratulate the noble Baroness, Lady Prosser, on the tremendous work that she undertook with the Women and Work Commission, culminating in the excellent report, Shaping a Fairer Future. It is a brilliant document and I recommend it to anyone who has not read it. I agree with her that flexibility is welcomed by many employers; small companies are the original flexible employers. Often they are ahead of legislation. My parents had a small cake shop in Farnworth where they employed eight people and, if they had not operated flexible working practices, they simply would not have had a business. I agree, too, on enhancing the skills of women. I shall read again with care her views on the Equal Pay Act possibly needing to be ripped up and started again.
The noble Baroness, Lady Gould of Potternewton, had reservations about the details of the Bill but no reservations regarding the principles, and I thank her for that. Along with the noble Baronesses, Lady Prosser and Lady Morgan of Huyton, she mentioned the Walsh review, which we will welcome as a step in the right direction. Anyone with a child of 17 or 18 knows that they have their own needs. In today’s world, strengthening and supporting families should be one of our key concerns. I remind your Lordships that the
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I agree with the noble Baroness, Lady Morgan of Huyton, that legislation is only part of the process and that the issue of women at work is complex, but at least this Bill is an attempt to address it. The majority of women’s groups that we spoke to thought that the way in the Bill was the best way forward. The noble Baroness had a catalogue of why maybe in the past we had not agreed with things—but we need to work on this in a collaborative way, which is exactly what I am trying to do. I rather liked the idea of a redhead from Bolton following in the footsteps of a redhead from Blackburn.
I am most grateful to the noble Baroness, Lady Howe of Idlicote, with her vast experience in this area, who said that the Bill may not be perfect—and I am getting that message loud and clear now—but it does try to address the issues. It has found genuine support in its aims around your Lordships' House. Again, I agree with her that women’s potential remains so underdeveloped.
I thank the right reverend Prelate the Bishop of Southwark for taking part and for mentioning the right reverend Prelate the Bishop of Nottingham and Southwell, with whom I have enjoyed debating the issue of flexible working on numerous occasions. The remarks of the right reverend Prelate about benefit families bring up one of my main concerns in this area.
The pay gap is a silent but far reaching problem. As the CBI said, discrimination is inexcusable. I leave noble Lords with a simple request—to think about the issues that I have raised here today and which I hope this Bill goes some way to addressing, beyond the confines of party allegiance. These are pressing concerns which affect countless women in the country. Rather than wait for a big government Bill to go through—although I look forward to it—with all the delays that Bills and false starts may entail, in this Bill we have an opportunity to make changes that will strengthen our families and promote fairness.
Bill read a second time and committed to a Committee of the Whole House.
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