Jacqui Smith MP

Women & Equal Pay

In my new ministerial role, I’d like to take this opportunity to thank you all, as well as the TUC as a whole, for its support for the different equality initiatives that this Government has introduced. Most recently, of course, the announcement of a consultation on civil partnership registration. We believe, as I know you do, that same-sex couples should be able to have their relationships recognised in law, a right denied them for far too long. Under our proposals, they can choose whether to register their partnerships, a chance that opposite-sex couples already have through marriage.

But I’m also here to congratulate you, first of all, for organising this seminar, but more importantly for the innovative ways in which you have used the Government funding that we gave you in 2001 to create a real momentum in the workplace around equal pay. In particular, I’d like to thank Mary Myles for all her hard work and for the enthusiasm she has shown throughout this project. Because as we all also know, the issue of equal pay for men and women has proved an elusive one.

As recently as the late 1960s and early 70s, there were different pay rates for men and women doing the same job. And it wasn’t that long ago that women civil servant had to leave their jobs when they got married. Before the early 1970s there were no women immigration officers. And even more recently, women in the forces had to resign if they got pregnant.

Since that time, basically in the space of a single generation, women’s working lives have been transformed. Today, women make up almost half the workforce, double the numbers of 25 years ago. And projections show that in 10 years’ time there will be 2 million more jobs in the economy, 80% of which will be filled by women.

That’s not to say we now have equality. Far from it. Because, although women are playing an increasingly important part in our economy, they’re still losing out.

We know for instance that women graduates can expect to be paid 15% less than men by the age of 20 and part time workers have a pay gap of 41%. So what’s the Government doing about it?

First of all, we’re taking the lead in equal pay reviews. And I can tell you that 79 departments and agencies, representing 92% of the 500,000 civil servants employed by Government, have already submitted their action plans to the cabinet office. The DTI’s received very positive feedback, I’m glad to say. The Cabinet Office will publish a summary report of findings at the end of the month.

So clearly, this is not an issue that can be resolved by Government alone. We need to work in partnership with businesses and, of course crucially, the trade union movement

But partnership is the key word. We want businesses to work with us because they want to work with us, not because they have to. We are still, therefore, not convinced that the mandatory approach is the best way forward. Having said that, however, we do believe that it is in firms’ best interests in the long-term to do them, so we are providing them with the tools to carry out pay reviews sensitively and fairly. This makes good common sense.

To facilitate that approach, we gave the EOC £100,000 to prepare a model for voluntary pay reviews, which it’s been rolling out across hundreds of companies and organisations. A separate system for small businesses has also been developed.

And in that regard, I am sure that employers will also find the EOC’s Code of Practice on Equal Pay helpful in improving their understanding of their responsibilities. This was laid before Parliament just this morning, although it won’t come into force until the end of the year.

And as your own project has shown, working in partnership can bring great benefits. I know that you have already initiated joint training with a number of important employers such as Alliance & Leicester plc, the BMW Group -Oxford Plant and Maldon District Council, all of whom will be carrying out pay reviews in due course

On top of that, the Government has drawn together, for the first time, what individual departments are doing to address gender equality as a whole, not just the pay gap, important though that is.

The report, ‘Delivering on Gender’, which is available on the Women and Equality Unit website sets out specific targets and initiatives across Government, which we believe are key to delivering improvements in gender equality.

By introducing equality targets, backed up by this important action plan, the Government is showing its commitment to gender mainstreaming across all key spending departments. In particular, we have a target that ‘the Government will work with businesses and trade unions, the Equal Opportunities Commission and Opportunity Now towards ensuring that 35% of large companies have done pay reviews by 2006.’

In addition, my department is in discussion as to how the Partnership Fund can support your idea of developing an equal pay expert’s panel to help organisations progress equal pay reviews in their organisations. I look forward to hearing more about this promising initiative as the details are worked up.

And we have also made it easier for women who have been discriminated against to take up equal pay cases by introducing an equal pay questionnaire. Until recently individuals could only obtain information about pay and job descriptions once an application to a tribunal had been made. One of the main purposes of the questionnaire is to get a dialogue going between the parties concerned, with the aim of seeing more disputes resolved in the workplace.

But awareness of existing rights is patchy. We believe that women’s employment opportunities and closing the pay gap can best be helped by making existing legislation work better. We value the contribution that legislation has made, but need to also accept its limitations. Many of the problems women face in improving their employment opportunities are based on culture and attitude and cannot be helped by legislation. But the issue is broader than just equal pay, it’s also about women’s work record, where they work and progression.

First of all, to support and protect people at work, we brought in parental leave, equal rights for part timers with full timers, the national minimum wage and dependants’ leave. And in April this year, we introduced another raft of new measures, for the first time, mothers and fathers have the right to apply to work flexible hours, fathers can take paid paternity leave, parents who adopt can take paid adoption leave and the arrangements for maternity leave and pay have been improved and simplified.

Women’s employment is highly concentrated in certain occupations, 60% of working women are in just 10 occupations. Part of this stems from choices made at school, highlighted in our report ‘Does Sex Make A Difference’, which is in your pack.

Target in Gender Equality Plan on increasing women in under-represented sectors and men.

Only a third of managers in Great Britain and less than 10% of directors are women.

And the picture is very different in different occupations, although women make up 73% of managers in health and social services, they only make up about 6% in production industries.

The recent report by Laura Tyson, building on the Higgs report on corporate governance, showed that the problem of diversity in the boardroom is not one of supply, there are plenty of able women out there, including women in the trade union movement, but of demand

The Government has welcomed her proposals and we have started work on how we can improve diversity in the boardroom. This in itself should help close the pay gap, which increased slightly last year because of a disparity in the earnings of some very highly paid men and women, in other words, the earnings of men at the top went up far more than for women high flyers.

So it’s clear we have come a long way from 1975 when the pay gap stood at 30%, but there are still many gaps and tensions. Removing the barriers should be a matter of concern for us all, for trade unions, for businesses, for our public bodies and our political institutions. As a Government, we are committed to working with others to tackle those barriers and reduce the pay gap.

This makes good economic sense, both at a micro and a macro level. But it is only by developing those partnerships that we can hope to make a difference, which is why it’s so important for us to continue to work together, as we have done so often in the past

Thank you