Equal Pay and the Gender Pay Gap

Huw Merriman Excerpts

Wednesday 1st July 2015 Commons Chamber

[Huw Merriman (Bexhill and Battle) (Con)]

I pay tribute to the hon. Member for Bermondsey and Old Southwark (Neil Coyle) for his maiden speech. He is clearly a passionate champion for his constituents, and he gave a moving speech on their behalf. I know his constituency well from having staggered around it twice—on a marathon, I hasten to add—when I was not perhaps in the best of shape. Should matters deteriorate on my daily commute from London Bridge, I now know where I should go, and I look forward to so doing.

I also pay tribute to my hon. Friend the Member for Bury St Edmunds (Jo Churchill), who made a very moving speech. I have got to know her well since we entered the House at the same time, and I have found her to be an inspirational person. She is an absolute winner in business, and she will no doubt be a winner in the House as well. I was moved by her description of the struggles that she has overcome.

I should perhaps follow my hon. Friend’s declaration of interests by declaring that I have three daughters. I say so not in any glib attempt to speak on behalf of their sex, but because the motion is incredibly important to us all. If we have daughters, we want them to be the best they can be, not to suffer any disadvantages or prejudice. That is also true for all of us, because if everybody reaches their true potential, we will be better off as a society and an economy.

I welcome the motion’s recognition of the steps that the Government have taken, including with their new data transparency initiative. I am sure Members from both sides of the House welcome what drives the motion and the sentiment behind its words—the attempt to close the gender pay gap. It should be noted that the direction of travel is heading the right way. Indeed, the current gender pay gap is the lowest on record. For all employees, it is less than 20%, and for full-time employees, it is less 10%. However, the UK still has only the sixth highest gender equality index score in the European Union. We should aspire to close the gap and to lead other European nations in this sphere.

I managed a legal team for many years before I entered the House, and I want to reflect on my 18 years of experience. I wish to highlight three areas that we need to focus on further as subjects for discussion in this debate on how to close the gap. The first area is flexible working, on which we have made hugely encouraging strides. In the legal profession, more women than men are qualifying. Yet, historically, women have found it harder to reach the senior status of partner, Queen’s counsel or managing director within their practice due, among other reasons, to their taking leave to start a family or, indeed, to their leaving the profession.

In my experience, however, employers increasingly recognise and embrace the upside of flexible working. The opportunity to hire an experienced lawyer for three or four days per week over set and fixed hours gave my department more productivity from that individual than it would have had from a full-time lawyer without the same level of experience. It therefore became the norm for members of my team to come in and work under flexible arrangements. Indeed, I had more people working on a flexible than on a fixed basis, and my team was better as a result. It also became the norm for members of my team to make the grade of managing director, notwithstanding the fact that they worked flexibly, either in their hours or from home.

Such hugely encouraging strides would not have occurred when I started out 18 years previously. In that regard, the market, following encouragement by the Government, is recognising the issue and closing the gender pay gap, via demand and supply in an increasingly competitive labour market.

The second area is quotas. If flexible working arrangements recognise talent and allow employers to take advantage of experience and talent, quotas for board members are a good example of how forcing the issue can have damaging consequences for those we are seeking to help. Seniority can be gained only by experience and endeavour. A voluntary approach to targets, with transparency and publication of data, is likely to encourage employers to see the positive benefits of having a diverse board of all talents. To fast-track any individual, male or female, to a board to meet a quota is unlikely to lead to good career practice for that inexperienced individual, and it is even less likely to benefit the workforce of the company.

I note that the latest figures show that the proportion of women on the boards of FTSE 100 members has increased from 12.5% in 2011 to 22.8% in 2014. That is a welcome change, but the figure remains too low. I encourage companies to use models that other companies have adopted. Some companies invest in senior staff and mentor and coach them to board level to escalate their progress and achievement. I encourage the Government to consider tax incentives for those who practise that approach. However, any Government quotas to force the issue on companies would not only amount to state interference, but do little to help individuals to enjoy a long and lasting career at the top.

The third area I wish to explore is data—not the most inspirational of words, but the key, in my view, to unlocking poor practices. By requiring companies with more than 250 employees to publish data on the difference between the average pay of men and women, it should be easier for individuals to assess why they lag behind the opposite sex and to work with their employer to take action. It should also ensure that companies review discrepancies. Hopefully, they will close any unjustifiable differences before publishing. Those who do not operate fairly will lose their talent. With an increasing need to retain top talent, the market should help to force best practice to the top. The number is fixed at 250 employees, but publishing data should encourage best practice for smaller companies and encourage them to adopt the same processes. Smaller companies should find it easier to get their hands on the data, so I hope the practice spreads all the way to them, too.

In conclusion, I welcome the drive behind the motion to recognise the improvements that have been made. The House should unite in encouraging employers to go further. I recognise the achievements my Government have delivered in this sphere and applaud the latest initiative to force data disclosure on companies. I reflect on the Government’s key deliverable to empower all genders in the workplace—namely, a state that creates the economic climate for growth. Our companies then increase the supply of jobs. Employees have options in the jobs market and can demand to be paid their worth, benchmarked against the new gender data, or they can exercise their rights in the labour market and move to a more enlightened employer who will pay them more, thereby bringing us closer to gender pay equality. There is a record number of women in the workplace. In my view, that is the key deliverable in tackling gender pay inequality.