Equal Pay (Audit)

– in the House of Commons at 3:30 pm on 21 March 2001.

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Photo of Vernon Coaker Vernon Coaker Labour, Gedling 3:30, 21 March 2001

I beg to move, That leave be given to bring in a Bill to require employers to carry out an audit of their pay structures' compliance with the provisions of the Equal Pay Act 1970[Interruption]

Photo of Michael Martin Michael Martin Speaker of the House of Commons

Order. Perhaps hon. Members would leave the Chamber quietly.

Photo of Vernon Coaker Vernon Coaker Labour, Gedling

I shall begin by publicly thanking the Equal Opportunities Commission for its help, and by congratulating it on its recently published report entitled "Just Pay".

In 1970, my noble Friend Baroness Castle, who was then First Secretary of State and Secretary of State for Employment and Productivity, introduced the Second Reading of the Equal Pay (No. 2) Bill. I reread her inspirational speech, and found many moving quotes that set the scene for today's debate. She said: There can be no doubt that this afternoon we are witnessing another historic advance in the struggle against discrimination in our society, this time against discrimination on grounds of sex … While other people have talked—lots of people have talked—we intend to make equal pay for equal work a reality". She went on to say: The concept of equal pay for equal work is so self-evidently right and just that it has been part of our national thinking for a very long time … Indeed, as far back as 1888, the TUC first endorsed the principle of the same wages for the same work. —[Official Report, 9 February 1970; Vol. 795, c. 914.] Some 30 years after those remarks, what would Baroness Castle make of the progress that we have made? I think that there would be pride in the progress that has been made, but disappointment that equal pay is still not a reality. Thirty years after the 1970 Act, discrimination in pay is still a reality for many thousands of women. Equal pay for equal work may have been part of our national thinking for a long time, but it clearly still requires major national action. Our practice has often fallen far short of the ideal.

The pay gap between men and women has narrowed since the 1970 Act was passed. In 1970, the gap stood at 31 per cent. It is smaller in 2001, but women working full time still earn, on average, 18 per cent. less per hour than men. Women working part time earn 39 per cent. less per hour than male full-time workers. It is clear, therefore, that the initial progress made soon after the 1970 Act became law in 1975 has faltered and that the pay gap, especially for women part-timers remains stubbornly high.

That is as unacceptable as it has always been, but the differential is striking when we consider the accepted view of society today. We believe that we are a modern society, free of the prejudices and injustices of the past. In many respects, that is true: there is more equality of opportunity, and discrimination in all its forms is being dealt with, but so much more remains to be done.

Continuing with that work fits in well with the Government's agenda of bringing about social inclusion and delivering greater equality of opportunity. Eliminating the gender pay gap makes a statement about the sort of society that we all want—a society in which ability and talent are what count, and in which everyone's ability is utilised to the full.

The elimination of the gender pay gap would improve the quality of life of working women, both now and in the future, and help to tackle child poverty. However, there are also sound business reasons for tackling the pay gap, as many employers already recognise. Fair pay makes recruitment and retention easier and increases productivity.

So what are the reasons for the continuing existence of the gender pay gap? The "Just Pay" report identifies a number of key factors that need to be addressed. They include discrimination in pay and occupational segregation, as well as the unequal impact of women's family responsibilities. The cumbersome nature of the tribunal processes available to women seeking to tackle pay inequality also causes problems.

The Government have taken, or are about to take, action on some of these issues and a number of reforms are in place. Measures such as higher maternity pay, the working families tax, credit, the children's tax credit, new rights for parental leave, trade union recognition, better child care and, of course, the minimum wage are making a huge difference to the position of women and families in our society. However, the challenge of equal pay remains, and neither the Government nor those outside who campaign for this must shirk it.

I know that the Minister for Employment, Welfare to Work and Equal Opportunities, my right hon. Friend the Member for Dulwich and West Norwood (Ms Jowell), is to bring forward proposals to speed up the industrial tribunal system, under which women try to air their grievances. In 1998–99 it was taking an average of 19 months to go through the system. Other proposals will include continuing to improve child care and providing real choice for women.

Let us look at the impact of occupational segregation on the gender pay gap. The fundamental issue is the valuation of women's work in the labour market and, in particular, the work of part-timers. The low status in the labour market of part-timers—predominantly women—is a major problem that again highlights how crucial education and training are.

The part of the gap caused by pay discrimination is the focus of my Bill. The Equal Opportunities Commission estimates that that accounts for 25 to 50 per cent. of the pay gap. Such discrimination is not necessarily intentional, but can result from procedures and policies that unwittingly fail to give women equal pay. If employers are not required to audit their pay structures to ensure conformity with the Equal Pay Act 1970, how do we know what is going on?

The figures according to the new earnings survey in April 2000 show that in my region of the east midlands, in craft and related occupations, women's earnings are 62 per cent. of male earnings—nearly a third less. In sales occupations, the figure is 68 per cent. Overall, in all occupations in the east midlands, women earn 74 per cent. —roughly three quarters—of what men earn.

To quote a specific national example, the recent Bett report into higher education showed a number of examples of unequal pay. Females were paid less in almost all occupations and at all grades in universities. The earnings of female academics were, on average, £4,000 less than those of male academics. If it is happening in that field, among highly educated women, one can imagine some of the problems and difficulties experienced elsewhere. I am pleased that the Government are starting to address the issue in the higher education sector.

The Equal Opportunities Commission conducted additional research, seeking evidence from employers about their pay practice. Some 301 employers were surveyed by National Opinion Poll. The key findings were that 11 per cent. of all respondents said that women progressed more slowly than men. Some 32 per cent. of public sector employees conceded that jobs done mainly by men had access to bonus or performance payments, whereas those done mainly by women did not. Twelve per cent. said that part-timers did not have access to occupational pensions.

It is for those reasons—the reality of life in our society—that my Bill is necessary. It would require an audit by employers of their pay structures to see whether they complied with the law. It is clear that without such a review, employers will not be able to judge whether they comply. According to the Equal Opportunities Commission survey, only a third of respondents had conducted any review of their pay system. In a more flexible job market, with more individual negotiation and considerable variety in the way in which people are paid, we must do more to ensure that such procedures are put in place. How much longer must we wait? I believe that most people would have expected us to win that challenge by now.

At the end of her speech in 1970, Baroness Castle said: There is just one thing I would like to say in conclusion. It is to pay a tribute to all those who have argued and striven over the past years for equal pay for women, and in particular to those hon. Members on both sides of the House who have championed the cause which is coming to such happy fruition today."—[Official Report, 9 February 1970; Vol. 795, c.929.] I hope that my ten-minute Bill can play a small part in continuing the effort to make equal pay a reality and to finish the task begun by those who went before us.

Question put and agreed to.

Bill ordered to be brought in by Mr. Vernon Coaker, Gillian Merron, Liz Blackman, Ms Joan Ryan, Mr. Derek Twigg, Ann Keen, Angela Smith, Ms Julie Morgan, Mr. Chris Pond, Ms Ruth Kelly, Mr. Jonathan Shaw and Mr. John Heppell.