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Equality Bill

– in a Public Bill Committee on 9th June 2009.

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[Mr. Joe Benton in the Chair]

The Committee deliberated in private.

On resuming—

Photo of Joe Benton Joe Benton Labour, Bootle

Thank you for coming, Solicitor-General. I am sorry, but it appears that you are the lone Minister this afternoon. Would you introduce your colleagues to the Committee please?

Vera Baird: I am fortunate to have with me my two senior officials. To my right is Melanie Field and to my left James Maskell. Perhaps they should introduce themselves and say a little more as to their role.

Melanie Field: I am Melanie Field. I work in the Government Equalities Office and am the lead official on the Equality Bill.

James Maskell: I am James Maskell. I am head of the Government Equalities Office legal team and the Treasury Solicitors, and I am the lead lawyer on the Equality Bill.

Photo of Joe Benton Joe Benton Labour, Bootle

Thank you. Before we commence questioning, will everyone ensure that their mobile phones and BlackBerrys are switched off? I understand that there was some trouble with interference this morning from BlackBerrys, so I would be grateful if that was done.

Q 207207

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

It is good to see you in the Chair, Mr. Benton. My first question is a quick one about positive action, which follows on from this morning’s evidence and questioning that you did, Minister. May I check the Government and legal position on a company or business that has two equally qualified employees using one of the protected characteristics as a tie-break? Is that lawful or unlawful?

Vera Baird: That would be unlawful.

Q 208

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

Right, so the Government’s view is that clause 153, given what you said this morning about it being fairly widespread or common practice for such a thing to take place, effectively enables companies to continue doing it without running into legal difficulties? Is that the motivation?

Vera Baird: Yes. It has two purposes. One is the ability to improve the numbers in an unrepresented work community, which we talked about, and the other is the one you have now pinpointed. You say it is fairly widespread. We have certainly had some evidence from senior stakeholders in business of the kind of example that I gave this morning, where someone wants to sell to  a particular community and therefore deliberately chooses someone from that community as a marketing person. That is fairly commonly done and it makes a lot of sense from a business point of view, I would have thought, so it is important to make sure there is protection for that.

Q 209

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

Okay, that is great. On disability, you will know from previous evidence sessions that a number of disability groups have expressed some reservations, asking whether the Bill is a step backwards. I know that the Government’s position is that it is not, as far as disability protection is concerned, but you will know that there are a number of concerns. Will you set out clearly for the Committee the Government’s position on disability protection in the Bill, so that we have a short statement about the Government’s position, or about what they think they are doing, and are clear for when we move into the debate on the specifics of the Bill.

Vera Baird: We intend to continue all the protection that is uniquely available to the disability strand because it allows for positive discrimination, which is essential. Meanwhile, there has been the case of Lewisham v. Malcolm, which changed the law to the disadvantage of disabled people. We have altered slightly how we describe the law about disability as a consequence of that case and we have dealt with it, but we do not think there is the slightest regression. We are confident that we have protected disabled people and left it open for there to be positive discrimination in their way.

Perhaps I should discuss concerns that have been expressed about specific things that the disability sector has said here. The first is that there might be some regression in that it is now necessary to show that someone has knowledge that a person is disabled before direct discrimination is indeed direct discrimination. That was raised here, I think. May I make points on that? First, the House of Lords made it very clear in the Malcolm case that that had always been the law. It interpreted the law in that way, so it has always been the case and we are only putting into statute what the House of Lords has declared always to have been the law.

The extra thing that disabled people have—I hope I am putting this correctly, but James will help me if I am not—is the availability of indirect discrimination, which they did not have before. That, of course, does not require knowledge, but relates to where a provision, criterion or practice disadvantages someone with a protected characteristic and is not objectively justifiable. That is a new strand of discrimination that will help disabled people. If anything, we think that we have moved forward. Certainly, we have not moved backwards.

There are more aspects. One is the problem of whether we have declared clearly enough the availability of positive discrimination. That is coupled with whether there is a danger of confusion because of the existence of the positive action clause that you have just talked about, Mark. That clause is weaker on the face of it than the positive discrimination provision.

There was even a suggestion that it might be better if we left positive action out of the disabled sector. We have made it as clear as we can that positive discrimination is still available, but if there is a better way of declaring it, we would have no problem at all in trying to do that.  Since the disability sector came here the other day, we have engaged it to see whether it has any suggestions about how we can make what we want to be clear even clearer.

The purpose in keeping disabled people in the positive action arena is to allow positive action, such as between groups of disabled people. So, for example, if Tesco wanted to have a specific programme on people with learning difficulties, it would be protected from discrimination against other disabled people through that provision. Both those aspects are important and if there is any deficiency in how we have declared them, we are happy to have the provision corrected, strengthened or whatever is necessary.

It is absolutely clear—I hope I am making it absolutely clear—that the political will is to make sure that disabled people are protected and given all that they have always had since the Disability Discrimination Act 1995 came into force.

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

As we move into consideration in Committee, it is helpful to know where we are approaching that matter from. We will seek to be as constructive as the Minister has been in getting to that.

Vera Baird: May I just check whether there is anything to add? No.

Q 210

Photo of Mark Harper Mark Harper Shadow Minister (Work and Pensions)

Two brief points on employment. I shall put them together and the Minister can then reply to them together. Employment rates for disabled people are still fairly low—much lower than for non-disabled people. Will you set out briefly any changes in the Bill that help to improve that situation? The second issue is linked to that and follows on from this morning’s discussion about the gender pay gap: there is a disability pay gap.

I have some information about the pay gap in Government. A number of Departments pay their disabled employees, on average, a significant amount less than their non-disabled employees. I suspect that mostly it is a case not of people in the same jobs being paid different amounts, but of seniority in the civil service being reflected. However, I do not have that level of detail.

Will the Minister perhaps address that point? There is nothing specifically in the Bill about the disability pay gap. Given the conversations we have had about the gender pay gap, do the Government intend to look at that?

Vera Baird: There is, of course, the positive action provision, which we have already talked about. That provision will try to help the imbalance in relation to employment for disabled people. There is also a duty to report to the companies registry on the levels of disability employment—it is already there. We are consulting on whether there should be reporting of the disability pay gap on much the same basis as there will be of the gender pay gap because transparency would help.

Those are the things that I would point to straightaway as providing a first response to your question.

James Maskell: It is worth making it clear that there are obviously two separate elements here: the public sector and the private sector. On the public sector, a consultation will shortly come out in relation to specific duties, which will potentially cover disclosure of disability  employment issues and so forth. In the context of the private sector, at this point we will be looking more for the first stage to be a voluntary element in terms of what people would want to disclose.

Vera Baird: Our approach is the same as with the gender pay gap: oblige the public sector and request the private sector. That is what we are looking at. James’s point that you have to distinguish the two was well made. We obviously intend that the public sector will drive it.

Q 211

Photo of John Mason John Mason Scottish National Party, Glasgow East

It has been suggested that maybe there should be a kind of equality guarantee or purpose clause in the Bill, as that would help the courts when they come to interpreting the legislation. To follow on from that, what is the Government’s thinking if there is a conflict between some of the eight protected characteristics? For example, what if one person’s right does not quite fit in with someone else’s right?

Vera Baird: I do not myself find the prospect of a purpose clause a very helpful likely tool for court interpretation. It is not something that we have as a rule in many British statutes. I do not think that the courts will have real difficulty understanding what the purpose of this is. It is fairly manifest from the content of the Bill what it is intended to promote. You could quote the equality duty as setting out most clearly what its intention is.

I do not think that a purpose clause would be a useful tool of interpretation. There has certainly been no pressure from the judiciary to lead us to think that they would find it difficult to look at the Bill without such an aid. A purpose clause is not part of what we usually do in English statute, and there is no particular reason to put it in here. I do not know whether any statement of purpose would go beyond the full contents of the statute itself to help where there is a conflict between strands. I would guess that there are likely to be, at some point, conflicts between strands, although it is not that marked an experience that there have been a lot of conflicts between strands in the past. Clearly, religion and sexual orientation are likely to be the ones, if there are any. We would hope that the Equality and Human Rights Commission will give guidance about how the public sector should deal with this, and there will be every prospect of it being involved in mediation if there were some issue.

A few people in the EHRC in Manchester have picked up cases in which there has been discrimination or a question mark over whether there is discrimination—some are large, some small. They are an obvious repository. They have, in a number of cases which they quoted to me when I visited them just a few weeks ago, been able simply to indicate to the person, perhaps the church hall organiser or some bigger affair, that they are discriminating—they have not realised that they are and have rectified it.

In other cases, the people at the EHRC have facilitated mediation between people who have not intended to get at cross purposes but represent separate interests. Obviously, one hopes that the tenor in which the Bill will be carried forward will be to try to promote good relations between the groups. That is for the EHRC to be at the forefront  of, so I hope that it will be much more about mediating, facilitating and making sure that there is a positive approach to each other among the strands, which, after all, is what the Bill is about. Obviously, if you have to go to court, then you have to go to court.

Q 212

Photo of John Mason John Mason Scottish National Party, Glasgow East

There is a feeling in some circles that when religion gets to court, it is treated as the least important of the strands. I do not know whether you feel that that has been the case and whether it will continue to be the case.

Vera Baird: I am not sure what court cases you are referring to. I am not sure that there have been a significant number so that one draws a conclusion that religion always comes out bottom. If you talk to people about sexual orientation, they might be equally concerned that religion might trump them in some cases, though you saw Ben Summerskill being very measured about all of that. I do not know whether there is any evidence to justify that view.

Q 213

Photo of John Mason John Mason Scottish National Party, Glasgow East

Perhaps we can come back to that when we have the debates later on. May I ask a final point? How would you see the place of an individual employee’s conscience? We had the idea that with abortion, employees are allowed a certain amount of latitude. Are there issues in the Bill that might benefit from an individual employee having a degree of latitude—for example, over a civil ceremony for a same-sex couple?

Vera Baird: Having a degree of latitude to discriminate?

Q 214

Photo of John Mason John Mason Scottish National Party, Glasgow East

The local authority as a whole would have to provide the service, but it would not force every individual employee to carry out that same service, as happens with abortion.

Vera Baird: Essentially, if you are delivering a public function, it has to be delivered by all the staff on a non-discriminatory basis. Granted that there are some exceptions to that principle in the Bill, none the less that is the right position to hold. Do you have any caveats on that?

Melanie Field: One witness this morning said that indirect discrimination was a helpful way of looking at this. If an employer has a policy that all registrars should conduct civil partnership ceremonies, it could be said to be indirectly discriminatory towards people who hold particular religious views. The question would be whether that policy was a proportionate means of achieving a legitimate aim. There is a question over the level of judgment.

James Maskell: It is also worth mentioning that we will have guidance from the EHRC on a lot of this. These are the sorts of issues that one would expect it to be working through to help employers and employees to reach satisfactory accommodations.

Q 215

Photo of Tim Boswell Tim Boswell Conservative, Daventry

This is directed to the Solicitor-General. First, I have a point on the purpose clause. You know that I am a declared supporter of the concept. I understand that the EHRC has argued that, had a purpose clause been in place, it would have been unlikely that the Malcolm case would have been adjudicated in the same way because a wider  interpretation of discrimination would have been applied. I appreciate that that case is now in the past. Do you have any comment on that?

Vera Baird: No, I do not. It is a slightly theoretical notion because we have not had a purpose clause. I cannot see that it is a particularly useful tool. Judges have a number of rules of statutory interpretation to which they cleave fairly strongly, including the ones that came in under the Human Rights Act 1998, which altered the basis of some interpretation. I think that they are satisfactory tools.

Q 216

Photo of Tim Boswell Tim Boswell Conservative, Daventry

Okay. I fear that I am going to ask one more rather general question and then a much more precise one. Would you like to say another word or two on your take on the issue of diversity? I appreciate that this is the Equality Bill, not an equality and diversity Bill, and that there may be difficulties in interpretation if we try to drag in something else. By diversity I do not necessarily mean the narrow issue of the hierarchy of strands, whether one is higher than another and how that is to be resolved. As I understand it, you are relying on guidance for that rather than on decisions or statutory or judicial interpretation.

Do you see it as at least part of the Bill’s function to try to maintain diversity? I mean that not only in terms of all the aspects that are discriminated against, but in terms of the actual participation in certain areas of people, for example, of different religious groups or none, or from different ethnic backgrounds. Is there a wider agenda, which many of us would be sympathetic to, that is not quite encompassed by the legal framework of the Bill?

Vera Baird: There undoubtedly is an agenda to drive the culture in the direction of better appreciation of diversity and more promotion of equality. The terminology in the public sector duty that talks about fostering good relations between people who share relevant protected characteristics and those who do not is a nod in the direction of communities working together. There are nods in the direction of diversity in some of the issues we discussed this morning, for example in protecting faith schools and giving rather narrow protections—I generally approve of the narrowness of them—where particular communities feel that they need to be protected. That is about it.

Q 217

Photo of Tim Boswell Tim Boswell Conservative, Daventry

Okay, thank you. If I may, I will divide the practical question in two. I was pleased to hear you refer a number of times to mediation. There are a number of areas where reaching for the judicial revolver is not helpful. Are you at least prepared to reflect on whether what is written in the Bill delivers sufficiently or would be likely to lead to processes of mediation as a precursor to any necessary litigation—that is, people should try to sort problems out first? I am thinking, for example, of the analogy of employment tribunals.

My second question is in the same spirit and is about the procedure of the Bill. You would not expect Opposition Members to subvert the whole purpose of a Public Bill Committee by saying that we need all this done behind closed doors, so I am sure that you will not interpret my question in that way. Some of these matters are legally very complex and, frankly, are outside the competence  of some of us. Nevertheless, they are exercising a number of people, including some who are legally advised. Over and above the public debate, would you at least be prepared to look at whether there are particular cruces in terms of the interpretation of something, and to caucus to try and see whether we can reach some kind of common understanding?

Vera Baird: I am glad that you agree that promoting mediation is an obvious way forward and wholly compatible with the nature of the Bill. There are structures that permit mediation in both of the obvious forums where action is likely to be taken if someone gets to the threshold of court. A person would go either to the employment tribunal and engage with ACAS or, if it regarded an outside of work provision, they would go to the county court where there is a lot of mediation. In some centres—particularly in a small claims court, where some of these cases would arise—there is an almost automatic attempt at mediation before the matter goes to court. Given that we are aiming at a culture change and that the commission is intended to drive that, one would hope that long before people started to talk about issuing proceedings, there would be an attempt to mediate if issues came to the attention of the commission. There are formal processes of mediation tucked within both of those processes.

If I understand what you are suggesting about caucusing—an interesting notion—you think that where issues are disputed, or where there is potential for dispute, we should try to talk to the lawyers for the stakeholders and hammer out the likely meaning. If there is any of that left to do, it will be a useful exercise for us to carry out before the Bill is finally enacted, so that everybody is clear about it. However, I think that we have been doing an enormous amount of that work as we have gone along, as we have been very consultative.

Q 218

Photo of Tim Boswell Tim Boswell Conservative, Daventry

I understand that, although we heard evidence this morning regarding some of the concerns held by the Church representatives, who did not feel that they knew exactly what the provision was before. I did not raise the issue for that purpose, I just record it.

Perhaps I can give you a gloss—this is very much a personal view. Rather than drawing political lines in the sand, if we are stuck on a definition and there is still a doubt about it, it would be helpful, in practical terms, to leave the issue open for further consideration before reaching a final view. I do not suggest that you do not have a job in Government, but if we are to get this right, a degree of tentativeness would be helpful to the process.

Vera Baird: I am not sure how we can legislate tentatively—I might not get the gist of what you are saying. I think that we have consulted widely, but I will ask Melanie to comment on what the two Church representatives said about being taken by surprise by that particular provision. However, I think that there has been discussion not only from stakeholder group to official, but from stakeholder group lawyers to our lawyers all the way through, in an attempt to ensure that the wording of the Bill is clear. As you know, it is what we call a plain-English Bill, in the sense that it has not only the necessary legalese on one side of the page, but plain English on the other side. Hopefully, it is accessible to those who are not legally qualified. I do not know whether there is anything to add about how we can better ensure that our definitions are well understood.

James Maskell: In a lot of cases one would hope that any issues would be raised during the debates if there are doubts about them. We will be clear where we do not intend to change the meaning of something. With a Bill of this nature, inevitably we might change a word but we do not intend to change the meaning. Sometimes people might think that we did intend to change the meaning. That is a consolidation of a clear element of the Bill. If it helps, we will make it clear when we are not changing the status quo.

Melanie Field: Following the comments made by the two representatives this morning I did go back and check on the issue. My understanding is that we do not think that we have narrowed the substantive provisions that we were clarifying under the law. A colleague telephoned the Church of England representative and gave them prior notice, but I have not been able to ascertain that anyone contacted the Catholics about it. We will obviously apologise for that.

Q 219

Photo of Lynne Featherstone Lynne Featherstone Shadow Minister (Children, Schools and Families), Liberal Democrat Spokeperson (Children, Schools and Families)

I am struggling with the socio-economic inequalities bit. The intended outcome is very laudable, but I do not see a mechanism that will actually deliver change and whether that change is measurable. Will you expand on your hopes for that? It seems such an important area and such a very small paragraph.

Vera Baird: What do you see the deficiencies in it being at present?

Q 220

Photo of Lynne Featherstone Lynne Featherstone Shadow Minister (Children, Schools and Families), Liberal Democrat Spokeperson (Children, Schools and Families)

It says that an authority must have regard, but it does not say whether that regard has to translate into action. It does not say how you will look at what effect the legislation has had. If it is meant to be beneficial in reducing the socio-economic gap, how will the legislation help us to look at that retrospectively? I cannot see where it will be effective. Perhaps I have missed something.

Vera Baird: The requirement is that, when planning strategically how to exercise functions, every public authority, the Government, local authorities—the whole lot—will have to have regard to the need to reduce the bad outcomes of socio-economic disadvantage. It is very outcome-focused. One would expect that, in looking at their three-year plans or whatever mechanism is used in the various public authorities that it will cover, they will have to have specific regard to that.

It will be transparent in the following two ways: first, it will be reported on and monitored by the inspectorate. The Audit Commission, Ofsted and so on will have in their matrix of things to consider whether regard appears to have been had to that in the context of the inequalities that will be at large in the domain of the public authorities. For instance, if it was in Redcar council where Ofsted was reporting some deficiency in how education was being delivered in one place as opposed to another or some other defect, the impact on my colleagues on the council—probably from all political parties—would cause them immediately to look at the problem and wonder why the inspectorates were reporting a deficiency in implementing that duty.

I would also expect, because transparency is key lever, other lobbyists to be immediately watching and to see that the inspectorates were pointing to deficiencies about them in that field and be trying to drive the  agenda. There were questions mostly from Labour Members, although they could have been from anywhere really, about whether it is not already common currency to be trying to overcome socio-economic inequality. It is in many cases; none the less, there remain socio-economic inequalities that are capable of being tackled through the public services. As I have encapsulated, the point of that is more generally to ensure that there is an actual legal duty on a public authority to do that now, and that it has to have priority. In the end, I suppose that it will be actionable in the sense that it could be used in a judicial review if there was a deficiency of outcome that could be pointed to, although it is not intended for that, but to make the local authority think.

Q 221

Vera Baird: Yes.

Q 222

Photo of Lynne Featherstone Lynne Featherstone Shadow Minister (Children, Schools and Families), Liberal Democrat Spokeperson (Children, Schools and Families)

Forgive my lack of legal knowledge, but a public duty to “have regard” does not just mean that they have to think about it and can then ignore it. It means that they have to think about it and then deliver it.

Vera Baird: It means that they have to have regard to how they integrate that into their strategy, does it not? “Having regard” does not mean that you can go through the motions of pretending you have looked at it, and then leave it behind. You have to have regard to it in a meaningful way. By and large, if you put statutory duties on public authorities, they follow them, but there is a back-up mechanism whereby the inspectorates will be there to, as it were, drive it. That is without the commission, which will also be on the look-out. It is strategic authorities—

Q 223

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

I want to return to some of our earlier questions this morning, starting with public sector procurement. In particular, I was struck and a little concerned, because, for example, whenever you listen to Ministers from the Department for Work and Pensions talking about welfare to work, they are most insistent that all the outsourcing they are doing of welfare-to-work programmes has to be done on what they are now calling a black-box basis. That means it is outcome-based: they pay by results. They do not, within some very basic legal minima, ask how the results are achieved. They just pay according to how many people get back into work, how fast, and how long they stay there. If we start requiring the subcontractors to comply with public sector equality duties of one sort or another and to provide information on how they are going to satisfy all these other duties, rather than just asking questions about what they have achieved, is there not some kind of conflict or tension there with some of your colleagues?

Vera Baird: I do not think so, but I do not want us to overstate. The public sector duty is exactly that. It is a duty on the public sector, not on the procured service necessarily. In fact, the procurement provisions in the Bill simply make it clear that procurement is a public function, so that the public sector duty is applied to procurement when it occurs. And it will, if you couple it up with a positive action provision, for instance. It will probably allow for quite good provisions in contracts. For instance, when building an estate, you can now put  conditions on that there should be training—apprentices and so on—involved in the building of the estate. You could probably couple that with a positive action provision, and now say that you would want 10 per cent. of those to be women, or 5 per cent. of those to be black, minority or ethnic—whatever the deficiency in the work community was. So that kind of provision is capable of being very helpful.

I also think that a quite important point was raised this morning. It is implicit in a contract about welfare to work—I think Katja was talking about somewhere where there is a big BME population—

Vera Baird: It is implicit in that you would need to have conditions on it that the people delivering it matched, to some extent, the community. That is not something new, but I think that is rather in the way that we talked about people picking marketing representatives from the same community. I think that already happens; it is not necessarily discriminatory. That is key and will be driven more strongly by this. But I also was slightly worried about the example she gave. I think we should clarify that if people have broken equality legislation, even if they are only delivering stationary, which was the example that was given, then they ought not to be coming into the pool of those who are used to deliver services by a public authority with a single equality duty. Those are the kind of parameters of how it should work. I do not think is about micro-managing how a particular deliverer of welfare to work does it. I think it is just ensuring that it functions within the ambit of the equality duty that the public authority wants to pass on.

Q 224

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

My concern is that that may not be the intention, but it may none the less be the outcome, because it is hard to think of a way in which you can maintain the black box and payment by results while also requiring the various different contractors and subcontractors to provide all the information and prove they are complying with all these additional bits and pieces. I cannot see how you can have both at the same time. In particular, I am concerned that it might very adversely impact on some of the smaller subcontractors, particularly those that may be private sector or third sector, who are very focused and dedicated and high-quality providers of services to particular niches. It might be somewhere in Bradford, it might be gay HIV sufferers in Leeds, it does not matter where, but some of them are very focused and very effective within their area, but are small organisations that find it very onerous to comply with some of those things.

Vera Baird: I am not sure that I follow why you think that people delivering public services, albeit at one remove, should not abide by equality law. I am not sure why you think that requiring them to do so will interfere with how they deliver their services materially. The whole public procurement process is set out in stages, is it not? First, we have conditions to allow people into the pool, then the terms of the contract and how the contract will work—monitoring whether it is working and so on. All that goes on now and is not incompatible with what you are calling the black-box approach. I am not sure why you think that. Of course they already have to look at issues of gender, race and disability—we are just adding the other sectors.

Your separate concern—if it was separate—was about niche providers. Niche providers will not be undermined at all, as long as we can ensure that there is provision and overlook for the whole population, if it needs to be divided into niche markets by niche providers. That is perfectly satisfactory, as long as there is a spread across the board and availability.

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

That is a helpful explanation of where we are coming from. We can explore it in more detail in our later debates.

Vera Baird: Okay. For my own satisfaction let me ensure that Melanie does not have anything to add or even detract from what I have just said.

Melanie Field: No.

Q 225

Photo of John Penrose John Penrose Shadow Minister (Business, Innovation and Skills)

One more small issue. I want to pick up on the points about the gender pay gap, which we were discussing this morning. I want to get the Government sense of how much the gender pay gap is as a result of actions by employers as opposed to other, structural or indirect problems in the rest of society, often public sector goods and services that have been delivered at another point in an applicant’s life, be that in the education system or elsewhere. What proportion is the fault of employers, which needs to be fixed by them, and how much of it is from elsewhere in the public sector?

Vera Baird: May I nitpick? I do not want to talk about stuff that is the fault of the employers necessarily being the same as discrimination. There is a certain amount of discrimination that the employer does not know is going on. I shall explain in a moment what might be a foreign concept. I do not think that anyone knows, really, what the amount of discriminatory unequal pay is, but those on the front line have suspicions—obviously they vary quite a bit, from what you have seen today. The trade unions would say that the amount was sizeable.

There are two kinds of discriminatory unequal pay, are there not? One is—deliberately, as it were, paying this man more than this woman or, theoretically, the other way around, although I do not think that happens very much. We shall tackle that by getting in gagging clauses, which about a third of the work force are subject to, and by the general transparency that we bring.

The other kind of discriminatory unequal pay is indirect. For instance, it happens quite a lot in local authorities, but also in larger companies, where work forces have come together because of mergers or reorganisation. It has simply not been appreciated that employment group 1 is doing work of equal value with employment group 2 because, albeit they are in the same organisation now, there has never been a comparison run. There is in fact gender discriminatory unequal pay. That is very hard to get to, because the employees almost by definition do not know that it is there. The employers may not realise that it is there. That is the real point at which transparency can make a significant difference in discriminatory unequal pay. Deliberate discriminatory unequal pay would be exposed by transparency, but the transparency provisions are really key to that second element.

I was pleased that Katja Hall this morning said that we need to look at what works and that she was ready to join in the job that we want to give to the commission  straight away—sorting out the things to measure, with the TUC, with the CBI, so that we can have some meaningful metrics. We can then require in the public sector and encourage in the private sector everyone to disclose them. I suspect that if that bites as we intend and results in disclosure among businesses that currently do not disclose, some businesses will be surprised to find that they have discriminatory unequal pay of the kind that I have said, which is not necessarily blameworthy. One hopes that they and the work force, having found that out, will be able to come to an understanding of how they get rid of the inequality in pay in an acceptable and manageable way. The short answer is that I do not think we know how much is discriminatory, but there are two distinct kinds of discrimination, and one is not really blameworthy in terms of the employer, but it is accessed through transparency, which is in large part what the provisions about transparency are for.

There are a lot of other factors. High-quality part-time work is not available for people who have had children and come back to work. It is estimated that about half of women who come back after childbirth work part-time in jobs for which they are over-qualified because there is not that kind of quality work available part-time and there is a lack of flexibility. That is something that we need to tackle in different ways.

As the Bill is making progress, we are at the same time putting together a paper on working toward equality, which is about the whole wider arena of women’s employment and why there is not only unequal pay but gender inequality in status and directorships in businesses. We want to expose where the rest of the difficulties that are not discrimination still lie, so that we can try to put policies forward to get rid of them. We have done lots. There is a lot more child care than there ever was before. There is the ability to ask for flexible working and better maternity leave. None the less, there is more to do. We want to put that document out and get input about how we can make progress in the non-discriminatory aspects of unequal pay.

Q 226

Photo of Sandra Osborne Sandra Osborne Labour, Ayr, Carrick and Cumnock

May I go back to the socio-economic duty? I very much welcome it, although it is quite limited, because it once again acknowledges the persistent class inequality that we still have in this country, where people are denied opportunities because of where they happen to come from. But I note that the explanatory notes say that this duty does not apply to Scotland,

“except where such matters are reserved to the United Kingdom Parliament.”

In terms of tackling socio-economic inequality, that is quite often done in Scotland on the basis of partnership working across the board between, for example, health authorities, local authorities, DWP and other such bodies under the guise of community planning. To say that I am disappointed that my constituents may not benefit from this duty in the same way that people will in England and Wales would be putting it mildly. How has it come about that Scotland has been excepted?

Vera Baird: It is because the Scottish Government do not want to have the duty placed on their public authorities. We would be very ready to extend it to Scotland. We would welcome it. We agree with you that it is an  important, though limited, duty to put on public authorities so that there is a recognition that there is still a long way to go to improve socio-economic equality. We think that that is as applicable to Scotland as it is here. We wish that the Scottish Government would take it up. I assume that they do not want to because they want to do things in their own way, but if they had a change of heart we would be delighted to extend it to them.

Q 227

Photo of Sandra Osborne Sandra Osborne Labour, Ayr, Carrick and Cumnock

You say “extend it”. Would that have been possible through a Sewel motion? Is that how it would have been done to be included in the Bill?

James Maskell: If we had extended it in the Bill, it would have required a Sewel motion. But obviously you get agreement before trying to force it.

Vera Baird: If the Scottish Government changed their mind and wanted their public authorities to be subject to the duty, is your question would we need a Sewel motion?

Vera Baird: If they wanted to do it, they would obviously pass the Sewel motion. You cannot use the Sewel motion as leverage to make them do it.

Q 228

Photo of Sandra Osborne Sandra Osborne Labour, Ayr, Carrick and Cumnock

So it could not be done without their agreement?

Vera Baird: No. They definitely have to agree, but they do not. They do not want a duty to reduce socio-economic inequality to be applicable in Scotland.

Q 229

Photo of Sandra Osborne Sandra Osborne Labour, Ayr, Carrick and Cumnock

That is extremely regrettable. This morning, we heard diverse views on whether pay audits are a good idea per se and whether they would take things forward. Given the persistent lack of progress on equal pay, why have the Government not considered making pay audits compulsory now, rather than leaving them to be done on a voluntary basis, which has not worked in the past?

Vera Baird: As you know, we have a power to compel the transparency that the public sector will have to abide by in four years if the public sector does not start to comply. We think that the way forward is to try to get a consensus. It is clear that a large number of businesses now declare their whole pay structure. Katja Hall said that it was 50 per cent., but I would be surprised if it was that many. However, businesses do not declare it in a way that enables you to compare like with like, sector by sector or across the board.

We want to get the metrics that will be worked out by this little group—the CBI, the TUC and the commission —in play quickly so that we can get the people who are already disclosing their pay structures to do so according to the same pattern so that like can be compared with like. That will put a lot of pressure on businesses that do not do it to do the same.

If you look at three businesses called A, B and C and A and C disclose their pay gaps, which are minimal, you will wonder why B is not disclosing its pay structure. If you are a sensible woman looking for a job, an ethical investor seeking to put money into one of the businesses, or a customer operating on an ethical basis, which many customers now do, you will steer well clear of company B. It will quickly be to the disadvantage of  company B not to make clear what its pay structure is. It will not want to make clear that it is a very discriminatory one and so it will move towards equal pay.

Granted that the CBI is ready to join in the process with the TUC and the commission, it is possible to try to make progress consensually. After all, the Bill is about changing culture, not about making business inequalities bitter enemies who have to be forced into mandatory pay audits to get out of a difficulty, when that could be done in a wholly different way. We think that this is the best way and we will give it a serious try. In due course, if it does not work and we are not getting movement towards equality, we have the power and we will use it.

Q 230

Photo of John Howell John Howell Conservative, Henley

May I ask some questions on age discrimination? I will begin with age discrimination outside the workplace in relation to goods, facilities and services. At the moment, we are in a position of wanting to have our cake and eat it. We would all want that. We want to remove negative discrimination but retain the best of positive discrimination, for example, bus passes and Saga Holidays. I do not quite understand how that fits together and where you draw the line. The conflict comes out most in what we heard this morning from the insurance industry. Could you give an overall picture of your thinking on that?

Vera Baird: We do want to have our cake and eat it, I am afraid. We want older people to have their cake and eat it. Things like cheap fish and chips in Redcar if you are over 65 and bus passes must carry on. There is no groundswell of opposition to that from any sector. Such beneficial age discrimination should carry on and we intend to ensure that it does.

We have to look at the area of insurance, in particular travel and driving insurance. Perhaps we should also look at mortgages and other financial services. I heard the gentleman from the insurance business today, and at the moment there is no requirement on any deliverer of financial services to age-proof the way they deliver those services to make sure that they are not gratuitously discriminatory as to age. It is very obvious that insurance in particular deals with risk, and if a risk increases as age increases then it is actuarially justifiable to enhance the premium to meet the risk, but there is now no need to check which one of them it is, and that is the process that we have to carry out. We have to ensure that appropriately and actuarially brought about distinctions between older people and younger people carry on, because that is essential for business and for older people to be covered by financial services, but we equally have to make sure that they are actuarially justified and not just piled on.

One problem that I see in insurance policies is that, often, somebody who is over a particular age is bracketed with people who are well over a particular age—65 to 75, for example. Obviously, the risk is going to be with the 75-year-old, not with the person who is 65 and one day. I think that issues will arise, when we look closely at that, as to whether such wide boundaries are really justifiable and whether we have to have narrower boundaries. That is one example where you can see that age discrimination could be slipping into financial services. We will consult, and we have kept on board both the age lobbies and the insurance companies in terms of membership of our senior stakeholder groups. They all know what we are doing at every stage and have no real  reason to think that their case is not being heard. We will consult on a document that will be issued pretty soon—I think I saw the first draft yesterday, so it is almost there—to try to pick between the things that are age discrimination and those which are not. The things that need to be protected—I suppose that Saga holidays are another one—will need to be subject to exceptions to the age discrimination legislation, and we will be happy to ensure that they are available as exceptions, but we have to draw them now to make sure that we do not capture any unjustified age discrimination.

Photo of Joe Benton Joe Benton Labour, Bootle

Order. I am sorry to interrupt, but as the Committee knows, we are bound by the knives agreed last week, and we finish at 5 pm, so this will probably have to be the last question.

Q 231

Photo of John Howell John Howell Conservative, Henley

In that case, let me move on to another issue, which we have heard a lot about—the default retirement age. Where are we going to end up with that in your view?

Vera Baird: The sequence is that we have agreed it should be reviewed in 2011 if nothing else happens before, but on 16 and 17 July, I think, the administrative court will hear a case brought by Heyday, which is the trading arm of Age Concern. It has been to Europe, which said that a default retirement age can be justified for reasons A and B—technical reasons—and the question for the administrative court now to decide is whether the British Government can climb over those hurdles and show that the age is justified. If the court says that it is not, we will have to look again at the whole question of what follows from that, because the default retirement age will in effect go with that judgment. If, on the other hand, the court says that it is justified, then presumably it will hold on, with diminishing importance I would have thought, until 2011 when we finally review it and decide what to do. Much depends on the outcome of that case.

Photo of Joe Benton Joe Benton Labour, Bootle

Very quickly, Sharon—the last question?

Q 232

Photo of Sharon Hodgson Sharon Hodgson Labour, Gateshead East and Washington West

Yes, please, thank you for letting me ask one, Mr. Benton. I have a couple of quick questions on pregnancy discrimination—it will probably have to be my only question. The National Union of Teachers is concerned about clause 16(7) and the use of the word “reasonable”, which we keep seeing in a lot of legislation at the moment. The NUT feels that employers could defend discrimination against pregnant women on the ground that complying with anti-discrimination measures is inconvenient or costly.

Vera Baird: Do not worry. We have tabled an amendment today to take “reasonably” out, as we have accepted the arguments that have come forward. We wanted to put a standard in there and we thought that “reasonable” would do it, but we have accepted the argument that it is bad and not good.

Q 233

Photo of Sharon Hodgson Sharon Hodgson Labour, Gateshead East and Washington West

The YWCA is concerned about clause 79 with regard to education for pregnant girls in school. Evidence shows that a significant proportion of them are treated less favourably in school.

Vera Baird: I will write to you—

Photo of Joe Benton Joe Benton Labour, Bootle

Order. On behalf of the Committee, I thank you, Minister, and your colleagues, for your evidence.

Ordered, That further consideration be now adjourned. —(Lyn Brown.)

Adjourned till Thursday 11 June at Nine o’clock.