Companies failing to address the gender pay gap have to pay up, writes shadow women and equalities minister Dawn Butler.
Earlier this month more than 10,000 companies provided details on their gender pay gaps and the findings were appalling.
An incredible 78% of companies pay men more than its women based on the median pay gap, while just 14% of the firms had a pay gap in favour of women.
The data exposes how men are over-represented in the best-paid jobs within companies, and that the proportion of women in positions gets worse as you move up the pay scales. Men too are paid higher bonuses on average than women. The data speaks for itself.
The Equality and Human Rights Commission (EHRC) has also said that around 1,500 companies failed to meet the reporting deadline. They must now use their powers to force these companies to report, and take action where they fail to do so. The problem is the EHRC has had 70% of their funding cut and I am sceptical of just how much power they can wield.
While the figures are shocking, it confirms what we already knew: there is an unacceptable gender pay gap. The Fawcett Society already found a 14.1% pay gap which has stagnated for three years. Data is important to understand the problem but without action it is meaningless.
We need a cultural shift backed by government but sadly I have no faith in this Tory government to do so.
They were pressured into enacting Section 78 of the Equality Act 2010, introduced by Labour, requiring organisations with 250 or more employees to publish gender pay gap figures.
And we must also remember that this is the same Conservative government which has inflicted 86% of its cuts on women, and the same Conservative government which is yet to act on its Race Audit.
Merely talking about the problem is not enough.
Labour has a strong policy to tackle the gender pay gap which goes much further than the government. Our plan requires companies to demonstrate how they will tackle their pay gaps, taking the onus away from the employees to call out pay inequality and placing it on employers.
We have a five-point plan; focussing on mandatory auditing, actions plans to close the pay gaps, government certification for fair equality practices, further auditing and fines for those who fail to receive certification of their equality practices, and shifting the responsibility to report unequal pay from the employee to the employer.
Employers will have to draw up action plans to address their gender pay gaps.
Several companies are already displaying good practice and many steps can be taken – like developing pipelines to improve female representation for coming years, stepping up the recruitment of female staff if underrepresented and ensuring women have pathways into senior roles.
And companies must address the contributing factors causing pay gaps, by ending unequal pay and discrimination, ensuring employees have greater work-life balances, improving take up of shared parental leave, improving access to flexible working and ending maternity discrimination.
Under Labour, powers of enforcement, should they be needed, will also be much tougher. Labour will give the EHRC the teeth to act and continue tackling discrimination in the workplace.
Our policies will also benefit business – PwC recently estimated the gains to the UK from closing the gender pay gap could amount to approximately £90 billion. And employers which meet the criteria will obtain government certification and be considered for lucrative government procurement contracts.
We must be clear: now that we have the data, action must follow.
It is time for the Prime Minister, whose cuts have only made things harder for women in this country, to finally back up her warm words with action. Cuts have consequences – you cannot tackle the “burning injustices” if you only add fuel to the fire yourself.
Labour has a strong, comprehensive and positive policy – which will be ready to put into action under the next Labour government – to end the gender pay gap and make a positive difference to people’s lives across the country. I challenge the government to implement this policy.
We simply cannot tolerate the gender pay gap any longer, it is time to value women and the contribution of all women in society.
Dawn Butler is Shadow Minister for Women and Equalities and Labour MP for Brent Central.
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