Equality Act 2010 (Gender Pay Gap Information) Regulations 2017

Baroness Gale Excerpts

Tuesday 24th January 2017 Lords Chamber

[Baroness Gale (Lab)]

My Lords, I congratulate the Minister on her first performance at the Dispatch Box and thank her very much for bringing these regulations before us tonight. I look forward to working with her again.

We are pleased that the Government have at last brought this statutory instrument on the gender pay gap before us tonight, as it was part of Labour’s Equality Act 2010. This Act introduced mandatory pay audits under which companies employing more than 250 people have to publish details of their male and female staff’s pay. We have continually asked the Government to live up to their duty to ensure that big companies publish information about their gender pay gap. I am glad to say that the Government have finally acted on this, but it has taken them seven years to bring this into force. It was a simple piece of legislation that Labour passed, legislation that would make the workplace much fairer. It is interesting to note that almost every major piece of legislation that has improved the lives of working women has been introduced by a Labour Government.

It is unfortunate that these regulations do not contain any enforcement provisions, or sanctions for non-compliance or for publishing inaccurate or misleading reports. I am aware that the Equality and Human Rights Commission could enforce these rules, as the Minister said, but I understand that it does not have the proper powers or resources to do so. In response to the Government Equalities Office’s consultation, Closing the Gender Pay Gap, the commission said that it would,

“require additional powers, and resources, to enable it to enforce compliance with the regulations, because its current powers are not suitable for enforcing, in a proportionate manner, a failure to publish”.

It therefore seems from this response that this is not something that the Equalities Commission can do at the moment. The interesting thing about this consultation is that about two-thirds of respondents agreed that such a civil enforcement system would ensure compliance. It is unacceptable that the Government have watered down these regulations and it seems to demonstrate their lack of true commitment to ending the gender pay gap.

We know that low pay is a significant factor in the gender pay gap. Women hold the majority of minimum wage jobs—some 59%—and female part-timers hold 41% of minimum wage jobs, almost twice as high as their share of all jobs. The sectors with the most minimum wage jobs are hospitality and retail, which account for just over 45% of minimum wage jobs, followed by social care, cleaning and employment agencies, which each account for between 6% and 7 % of such jobs. It is mainly women doing these jobs, and so much work still needs to be done on this front. That is why enforcement is crucial.

As of the last Autumn Statement, 86% of net savings to the Treasury since 2010, through tax and benefit changes, had come from women. It is a shame that the Government have repeatedly refused to conduct a cumulative gender impact analysis of their policies. Part of the reason that the Government have been unable to significantly shift the gender pay gap is because they do not seem to have a strategy to address chronic low pay in sectors such as retail, care and hospitality, where many women work. I am sorry to say that the Government are turning the clock back on gender economic equality. As a result of their policies, they have forced women to pay the price for their austerity failures. With the gender pay gap still at more than 18%, women are still working for lower wages than men, and over a lifetime that can result in a significant loss of wages.

Under these regulations, employers must analyse their gender pay gap each April and publish their gender pay gap report within 12 months, and they must report annually on their websites. They must also upload the information to a government website, but details of this website have still not been released. I understand that the Government plan to introduce similar reporting obligations for public sector employers within the same timeframe.

I would like to hear from the Minister on the following points. Will she tell us whether the Government will give the powers and resources to the Equality and Human Rights Commission in order for it to be able to enforce compliance with the regulations? Otherwise, it is difficult to see how it can possibly carry out this work, bearing in mind that its budget has been cut from £62 million in 2010 to £17.4 million by 2020. Will the Minister say when details of the government website will be released? Regarding public sector employers, will she say when the regulations will be put to Parliament? I look forward to the Minister’s response.

[Baroness Vere of Norbiton]

My Lords, I thank noble Lords for such an interesting debate this evening, particularly the two noble Baronesses for their kind welcome. Feedback is, of course, very welcome. I would like to spend a few moments addressing some of the points that were made.

Turning first to non-compliance and sanctions, it is the case that the Equality and Human Rights Commission has the powers under the Equality Act 2006. The way that we are going to approach this is that the system has to be up and running. The Government will review the sanctions in due course, but only when the prevalence of, and, perhaps as importantly, the reasons for, non-compliance have been established. It is certainly under review, but it should also be noted that the majority of organisations responding to the consultation did not raise concerns about the lack of financial penalties. The other reason why compliance will be slightly higher than otherwise is that competition within organisations in the same sector will, I think, be quite fierce. We will have to see where we go on that, but I know that it will be under review.

I listened with interest to the entreaty from the noble Baroness, Lady Gale, on low-paid workers. I understand that she was approaching that from a female perspective, but let us not forget that the Conservatives have raised 1 million people out of income tax altogether. There were lots of positive things being done for low-paid workers, including the minimum wage going up. She also mentioned the pay gap, which is still at 18.1%. I agree, but it is going down, which is very good. Actually, compared with other countries, we do very well. The gap in Finland is 18.4% and in Austria it is 22.25%. The interesting thing about what they are doing with their gender pay gap reporting is that they are requiring companies to gather the information, but then not requiring it to be published. I am therefore happy that the proposals that we have in front of us really are world-class. We are taking a lead in these, which is very positive.

The noble Baroness also asked about the website. As we know, the snapshot date is 5 April this year, and from that date, the companies will be able to publish their data as their reporting cycle moves through. Of course, it can be up to a year before they actually publish. The government-sponsored website will allow us to closely monitor compliance levels and we will launch it to coincide with the commencement of these regulations. I know that I will be looking with interest to see what the outcomes are.

The noble Baronesses also asked about the public sector regulations and when we might see them. They were laid on 18 January and will be subject to separate debates in both Houses shortly. Subject to parliamentary approval, these regulations will be in force by March 2017, and the specified public bodies will need to publish their gender pay gap before March 2018. By 2018, therefore, we will have a whole lot of data to look at, which is excellent. Both sets of regulations will require the same gender pay gap calculations, so they will be comparable, and noble Lords may have seen that the Government published their response to the consultation on public sector gender pay gap reporting earlier today.

It is not acceptable that the gender pay gap still exists in this day and age. These regulations will create opportunities for individuals and employers by driving action that promotes greater gender equality in workplaces across the country. I am pleased that the regulations are broadly supported by this House and that the underlying policy intent is agreed. We must accelerate action to close the UK gender pay gap. On that basis, and if there are no further questions, I hope that noble Lords will see fit to support the regulations and I commend them to the House.