Women’s Contribution to the Economy

Baroness Burt of Solihull Excerpts

Thursday 6th March 2014 Westminster Hall

[Mrs Caroline Spelman (Meriden) (Con)]

I thank all hon. Members who have asked to speak in this debate. It is the tradition of our Parliament to have a debate as close as possible to the date of international women’s day, which is on Saturday, so Thursday afternoon is as close as we can get. I am grateful to the Backbench Business Committee for acceding to the cross-party request to hold this debate today.

I will focus particularly on the global female economy. Women’s contribution to the economy is topical as the world digs its way out of the global financial crisis. It will be vital, if we are to consolidate economic recovery, for women around the world to participate in their economies. Research published by the Boston Consulting Group last September suggests that over the next five years, women will add $6 trillion to global earned income, which shows the size of the contribution that they already make and the scope for much more.

Both genders need to be active in the economy for GDP to grow to its full extent. An International Monetary Fund report also published last September noted the potential for macro-economic gains if women develop their full labour market potential. GDP per capita losses as a result of gender gaps in the labour market are estimated to be as high as 27% in some countries. The new Prime Minister of Japan took the World Economic Forum by storm this year when he said that if Japanese women were fully active in his economy, his country’s GDP would grow by 16%, that he sees that as absolutely key to the future of Japan, and that he intends to legislate for a target of 30% of leading positions in his country to be filled by women.

In developing countries, gender inequalities are often even greater than in developed countries. In 2013, the IMF cited studies estimating that of the 856 million women worldwide who have the potential to contribute more fully to their national economies, 812 million live in emerging and developing nations. India is one example. India has had, as role models, a famous female Prime Minister in Indira Gandhi and a female President, Pratibha Patil. However, the female participation rate in the labour force in India has stayed at around 32% since the turn of the century, and female wages in India have declined to an average of just 26% of men’s.

There are some important global initiatives to tackle such issues and realise the gains to be had from increasing female participation in labour markets. For example, Coca-Cola began its 5by20 initiative in 2010. Coca-Cola has pledged to empower 5 million female entrepreneurs around the globe by 2020 by increasing their access to business skills training courses, financial services and networks of mentors. The company employs 770,000 people directly and 10 million indirectly in its supply chain. Programmes are now running in more than 20 countries, including Haiti, Thailand, Liberia and Ethiopia, and will create a whole new generation of female entrepreneurs.

[Lorely Burt (Solihull) (LD)]

We need not look only to developing countries: the number of female entrepreneurs in this country is about half the number in America. If we are talking about growing the economy, would we not solve our economic problems at a stroke if more women were encouraged to create companies, wealth and jobs?

[Mrs Spelman]

The hon. Lady and I share a great interest in the role of female entrepreneurs in our regional economy. If she waits a short while, I will come to exactly that point.

Charities are also running initiatives, such as Oxfam’s gendered enterprise and markets programme. Oxfam works with vulnerable farmers, especially women and mothers, helping them grow and sell more by supporting them to establish producer groups. In that way, female farmers can pool their resources and sell their produce in bulk to get a better price, enabling them to increase income and gain equal status in their homes and communities.

A couple of weeks ago, during the recess, I saw another example of an initiative to empower women when I visited Bangladesh in my capacity as vice-president of Tearfund. The charity is working in partnership with other non-governmental organisations to undertake capacity-building programmes in flood and drought-prone parts of the country, as well as empowering women in village communities to take over and improve their own situation, not necessarily by giving money directly but by building capacity. I saw women there being taught to use kitchen gardens to grow vegetable crops that they would otherwise pay a great deal to buy imported from India. It was a joy to behold the light that shone out of their eyes and their pride in improving their circumstances. They might be illiterate, but their daughters will be able to get a university education, and the resources that they had secured through better farming were ploughed into the needs of their local community.

I also discovered in Bangladesh the role played by the central bank there. Its governor, Atiur Rahman, has at heart a desire to make his country more sustainable and to help the women there become more sustainable. He has granted a mobile bank account to every female garment worker in the country for next to no charge, meaning that those women can return their income directly to mum and dad back home in the village without a middleman taking a cut. Those are examples of creative ways to ensure in developing countries that women play a much more active role in their economy.

As for the UK, Office for National Statistics figures published last month show that female employment in the UK is at its highest level since records began. It now stands at 62.7%, compared with 53% in 1971. Women now account for 46% of the UK work force. Figures from January 2014 also show that 20.4% of FTSE 100 directors are female, compared with 12.5% in February 2011. Progress is being made in those areas, but there is definitely still further to go.

Turning to my regional interest, which I share with my hon. Friend the Member for Solihull (Lorely Burt), I am disturbed to read that there are serious geographic imbalances in female participation in this country. The lowest employment rates for women are in Birmingham, where the rate is 50%; Nottingham, where it is 54%; Coventry, where it is 55%; and Leicester, where it is 55%. That means that they have a higher than average proportion of women not actively employed in the economy. I fully understand that that might be linked to the ethnic make-up of those cities, but none the less, it is disappointing to find that the midlands cities, which are at the heart of the manufacturing renaissance that we are enjoying, have such low levels of female participation compared with other cities.

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[Fiona Mactaggart (Slough) (Lab)]

I congratulate the right hon. Member for Meriden (Mrs Spelman) on leading the call for this debate. When I spoke to the Leader of the House on 9 January, I pointed out that it was traditional to have an international women’s day debate and that, at a time when women of the world do two thirds of the world’s work, but only get 10% of the world’s earnings, there was a big challenge that we had to address. I am sad, as I am sure other Members in this Chamber are, that the debate about women’s issues is half in the main Chamber—about women in Afghanistan —and half in this Chamber. I should like to contribute to both debates. I hope that all of us can unite to make sure that next year we do not get a repeat of this mess.

I think that all hon. Members can unite in celebrating the way in which women’s contribution to the economy has grown. When I joined the work force in the 70s, only half of women were in employment and now it is two thirds, although we have not yet achieved equality with men. The Women’s Business Council recently calculated that if we were to equalise the participation of men and women in the economy, we would increase GDP by 0.5% per annum and by 10% by 2030. I think that we could all unite in wanting that.

I am concerned that we continue chronically to undervalue the role that women continue to play, because so much of the work that women do is not paid; and that is because we do not put an economic value on the things that women do that make the world work and make the economy and society operate effectively. Caring for family is critical to economic success. Without family care, children will not succeed in learning and the costs of caring for older and ill people will be a public burden. My thesis is that if we recognised the value of women’s work more effectively, we would have a stronger economy, there would be less under-employment of women and we would all thrive better.

I want to mention specifically a group of women that we have not noticed. We have noticed that there is a child care penalty, which the right hon. Lady described well, but I want to talk about the contribution of older women. In that context, I commend to right hon. and hon. Members a report produced by the TUC this week, called “Age immaterial: women over 50 in the workplace”. It is striking that older women face additional penalties. I am really sad that, in an era when we have traditionally equalised the pay gap and it has been pulling together—under the previous Government it reduced by 7.5% or 8%—for the first time in five years it has widened a bit again. It is worth looking at for whom it has widened most and where the pay gap is biggest.

We tend to think that the pay gap is biggest for a woman caring for her children. Actually, that is not so. The pay gap for women under 40 is less than 1% and the biggest pay gap between women and men—18%—is for women between 50 and 59. We need to address this issue of women in precarious employment who are underemployed and underpaid.

Older women share one kind of vulnerability with younger women: they are much more likely to be on zero hours contracts than other groups in the economy. This is a phenomenon at the beginning and the end of employment. They are more likely to be low paid. They will not benefit from the Budget that we are all looking forward to next week—well, we may not be looking forward to it, but we will have it shortly—because more than half of women over 50 are in part-time employment and more than half of them earn less than the tax-free allowance threshold. If that threshold is increased again, it will not address this low-paid group in the economy.

We need to deal with the concern about the most precarious women workers. Right hon. and hon. Members will be aware that I have been banging on somewhat—and I want to bang on briefly once more—about the fact that we do not protect young women from employment in roles ancillary to sex jobs, in pole-dancing clubs, saunas, massage parlours, and so on. Those roles are still advertised through jobcentres. It is shocking that people who do these ancillary jobs as hat-check girls, receptionists, spa workers, and so on, can still get the employment subsidy that is available to workers between 18 and 24. It is shocking that my taxes might be used to subsidise a young woman in such a role. I should welcome the Minister’s saying that she will discuss in her colleagues in the Department for Work and Pensions, whether that is happening at the moment and what the future jobs are of the girls in these ancillary roles. I fear that those jobs are a stepping stone to employment in the sex industry. If that is so, the least we should do is prohibit their being subsidised. But I divert into younger workers from my main issue, which is older workers.

If we were to tackle the issue of the quality of work available to older women, we would stop wasting a huge resource that is potentially available to our economy. It is striking that two thirds of people who work after retirement age are women, but two thirds of those women are still on the lowest pay levels. Of the men who comprise the one third of people who work after retirement age, two thirds of them are—guess what?—on the top rates of pay for their role. That is a reflection of the fact that women have to keep working because they have lower savings and poorer pensions and still have family responsibilities and costs. As I am sure other Members do, I speak to many women in my constituency who are desperately trying to get together resources to help their children and grandchildren get on to the housing ladder, and so on. We are wasting the potential of a large group of women, which we need to address.

[Lorely Burt]

I am listening closely to the hon. Lady. It is regrettable that older women are paid less—I declare my interest—but perhaps that is partly because they take time out for child care, whereas the boys, as ever, run ahead and develop their career. Also, as women get older, many of us have to care for our parents and the older generation. Does she think that the increase in flexible working rules will help this generation of women? What else does she suggest that we, as a Government, can do to facilitate the narrowing of the pay gap between men and women?

[Fiona Mactaggart]

The hon. Lady is right that the motherhood penalty goes through a woman’s career, which is one of the reasons why, although women outnumber men in the earlier levels of management, they fall off the career ladder as they go up. She is also right to highlight that, if we were to make work more flexible—I will make some specific proposals on ways to do that—it would be easier for women to thrive in the workplace. As is traditional in all sorts of areas of life, a male model is the standard model and women, of course, are a diversion from that standard model. I remember that when I was first elected in 1997—I was one of the 101 women we flapped on about in the Labour party—one of the difficulties that women such as me faced was that every single thing we did, and every single step we took, represented women in politics. Every time a woman did something that was perhaps unreliable or unusual, it was because that is what women do. We were strange and unusual, and we were a diversion from the norm. Interestingly, I no longer carry on my back that requirement to represent women in politics. Although we are still a small minority of Parliament, we have become more normal.

That is good, but we still have a workplace environment in which the norm is nine-to-five. The norm is a man with a wife at home who looks after the children, ensures that they get to school and deals with their doctor’s appointments, and so on. The recent figures from the Office for National Statistics are interesting because they suggest that women take more sick days than men. There were arguments that women know how to use doctors better, but everyone who has really been there knows that it is not because women are sicker than men or are better at using doctors; it is because women take time off pretending to be sick when their children are sick. When I was a teacher, no teacher ever took time off because they were sick, but they did take time off when their kids were sick. We have failed to recognise the different experiences of women and men in how work is structured, so we think it is very modern to make work more flexible by moving from a very male model to something that is more normal for all men and women, but we need to go further.