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§ Judy Mallaber (Amber Valley)
I am pleased to have secured this debate on equal pay for women and men.
What is today's debate about? It is simple to describe. The pay gap between women and men is 19 per cent. for full-time workers. For those working part time, the gap is 41 per cent. Hourly earnings of women part-time workers are just 59 per cent. of men's earnings, and the position has not changed for 25 years. The problem is much harder to eliminate. Even though pay discrimination has been illegal for 33 years since the passing of the Equal Pay Act 1970, inequality remains horribly stubborn. It runs from top to bottom and cuts across all sectors of employment. There are the well publicised cases of pay discrimination claims in City firms; for example, the share analyst, Julie Bower, won £1.4 million from Schröder Securities for a discriminatory bonus scheme, and the cleaner, Dawn Ruff, at Hannant cleaning was paid 60p less an hour than her male colleagues doing equivalent jobs.
That is why the all-party group on sex equality wanted this debate. Its chairwomen, my hon. Friend the Member for Cardiff, North (Julie Morgan), tabled an early-day motion on the subject, which has 129 signatures so far. It is such a wonderful a motion that, until I secured this debate, I was convinced that I had added my signature to it. To my horror, I discovered that I had not signed it, but now I have. I know that my hon. Friend hopes to intervene on this debate, but she must also attend a worthy Committee that is considering the Female Genital Mutilation Bill. I place on record our thanks to her for her work on the all-party group, and to the Equal Opportunities Commission for helping the group and providing briefings for Members today. I also thank my union, Unison, the TUC and firms in my constituency for providing information.
The all-party group welcomes the steps already taken by the Government to redress the pay gap, but we call for further action to give the strongest possible positive lead to employers and to highlight the problem, about which we have not done enough despite it being such a long-standing and deep-seated problem.
I am delighted to introduce the debate because I have worked on the issue of pay equality all my adult life, beginning many years ago—more than I care to remember—on the women's rights committee of the National Council for Civil Liberties with, among others, the Minister's boss, my right hon. Friend the Secretary of State for Trade and Industry. We were tackling pay inequality, and promoting equal pay for work of equal value.
At that time, I worked for the National Union of Public Employees and wrote its documents on a statutory minimum wage, until we finally persuaded our party that the principle was not an interference on free collective bargaining, but a positive measure in tackling injustice and poverty. It can be one of the most effective tools with which to tackle women's pay. Some 1.5 million people benefited from it when it was introduced. Some 70 per cent. of them were women and two thirds of them were working part time. For the most recent date for which figures are available, 1.8 million workers in Britain, of whom 1.35 million are women, were 298WH earning less than £4.50 an hour, which will be the minimum wage rate from October this year, as recommended by the Low Pay Commission. I welcome that increase, but my request to my hon. Friend the Minister is that the Government should ensure continued increases in the future. We need increases that are significantly above inflation to help to tackle the pay gap and promote improvements for those on the lowest pay.
I was proud to serve on the Committee that considered the National Minimum Wage Act 1998. I was on the Committee with the hon. Member for Buckingham (Mr. Bercow), and I hope that he will later recant the many hours that he made us spend, sitting through the night, telling us what an absolute disaster the minimum wage would be—the end of civilisation as we knew it. I know that he is an advocate of equal pay, so I look forward to his telling us that he now totally supports the minimum wage and the increases in it.
Pay matters. We all know that. It directly affects our standard of living. It shows how we are valued by our employers and society, and it can affect how we value ourselves. What does it say about the importance of women's work that they are paid so much less than men? How is that regarded? Pay inequality and secrecy about pay is bad for business. It can demotivate staff and lead to the loss of good, experienced staff. Pay inequality follows women into retirement and into pensioner poverty.
This is a complex issue that will require determined work on various fronts. We have seen the gap and how little progress we have made in the past 33 years. The causes of the pay gap have been and can be analysed under three main headings: straightforward discrimination, occupational segregation and the effects of the unequal impact of caring and family responsibilities. On pay discrimination, employers that I have asked have said to me, "We do not have a problem here, because we have equal pay rates. We pay men and women the same. There are no problems." However, employers often think that they are all right—that there is no problem—because they are looking only at basic pay and salary rates. Equal pay covers all elements of a pay package.
I am a strange anorak. I recall that, when I was working for the union, I used to love getting the pay statistics from local government employers. I would pore over those with great delight. At that time, the cook and the dustman, for example, were on the same basic rate, but the pay differences between them were substantial. One got a bonus and the other did not.
Other issues relating to unsocial hours payments, company cars, pensions and holidays all come into the pay package. Equal pay also means paying men and women the same, even if they do different jobs if they are jobs of similar worth, or jobs that can be evaluated as being equal.
§ Joan Ruddock (Lewisham, Deptford)
My hon. Friend is speaking about local government, so I wonder whether she has seen the excellent paper produced by the GMB, the Transport and General Workers Union and Unison on term-time working? That mainly affects women who are employed in term time, but who are 299WH often not paid for holidays and are on low rates of pay. Will she consider that issue, because it involves direct discrimination of the kind that she is discussing?
§ Judy Mallaber>
I thank my hon. Friend for her intervention. I used to help to negotiate pay rates and conditions for school meals staff and cleaners, so I am aware of that problem. Indeed, I recently attended the rally organised by the unions. I hope that we can take that point on board positively.
Because there are so many factors involved, we need employers to analyse their pay structures properly if they are to identify why men and women receive such different deals on pay. I welcome, as I am sure all hon. Members in the Chamber do, the Government report that has asked employers to carry out pay audits. I also welcome the development of the equal pay questionnaire to help employees to take up questions and concerns about unequal pay with their employers, and the Equal Opportunities Commission equal pay toolkit.
§ Julie Morgan (Cardiff, North)
Does my hon. Friend not agree that it is important that help is given to small and medium-sized businesses, so that they are able to analyse their pay practices? Is she aware of the high-tech guide for small businesses issued in Wales by the EOC in conjunction with the Welsh Development Agency? That is aimed especially at such firms to help them analyse their pay practices and move forward. Such businesses do not always have the resources available to large bodies and public bodies. I am sure that she will recognise that that is important in Wales, because two thirds of the people there work in small and medium-sized enterprises.
§ Judy Mallaber
I thank my hon. Friend for her contribution. That is important. I did an interview earlier with my regional BBC. I was asked whether employers would say that that was just another burden on them. I do not think that it is a burden—it is useful for businesses to have a good, fair pay structure. However, they need help with that and it is important that we have guides to make it easy for them to produce one and that say that this is not a complex exercise and that they will be given as much help as possible so that they are able to carry out the audits.
There are several issues that I shall add to the debate and ask the Minister to consider. First, the recent research from the EOC shows that only 18 per cent. of large employers and 10 per cent. of medium-sized employers have embarked on pay reviews. But, if they do not do so, they may not realise that there is inequality in their organisation. The immediate reaction is for organisations to say that they do everything properly, because they do not obviously discriminate. I call on my hon. Friend the Minister to ensure that the Government make a great effort to highlight pay audits and the assistance and advantages available to employers. The Government need to put the same effort into this issue as they do in promoting tax credits, family friendly and flexible working rights and so on.
Secondly, it is important to monitor progress on the equal pay audits. I do not suggest that there should be compulsory pay audits, but if progress is not being 300WH made, we will have to consider what more can be done. Otherwise, closing the pay gap will take decades. We have already waited 33 years and we cannot wait for ever.
Thirdly, we should use the power of the public sector and ask all private sector contractors employed by the Government to complete a pay review before contracts are agreed. The growth in the contract culture makes it difficult to apply many of the employment practices and employment legislation in our economy. For example, the Equal Pay Act 1970 cannot be used if comparisons cannot be drawn because people are employed by different employers, even if they are carrying out work as contractors for the same organization.
Fourthly, I welcome the TUC equal pay pilot project, which has been funded by the union learning fund. In the Committee on the Employment Bill, which was enacted in 2002, Opposition Members were fine about family friendly flexible hours but what drove them doolally and bananas was funding for union learning representatives. They insisted that the Minister stayed in Committee for the whole day while we talked about a positive proposal that I thought was the obvious thing to do; the Opposition said that we were there only at the behest of the TUC.
It is important to help workplace representatives to find out how to do equal pay reviews. It is important, too, to promote partnership between workplace reps and employers to conduct those exercises jointly. At present, the project has trained 500 representatives to understand what the reviews are about. I ask my hon. Friend the Minister to ensure that funding is continued for that purpose, including helping people from the employers' side.
Fifthly, the Government must lead by example. We cannot ask everyone else to do what we are not doing ourselves. The Secretary of State said recently how embarrassing it was to discover that an equal pay audit had uncovered a serious problem of unfair pay in ACAS, the great arbiter that ensures that everything operates smoothly in the workplace and assists people to get things right. However, at least the audit was done. The Secretary of State said that money had been found to address the problem.
I ask my hon. Friend to ensure that the results of the pay audits carried out in other Departments and agencies following the EOC's "Just Pay" report are published as soon as possible, and that action is taken to provide the funding to rectify any problems that are uncovered. I hope that she will take note of the matters arising from the issue of pay audit and pay discrimination.
I want to give a positive example of my union's experience of the NHS agenda for change programme, which has been widely discussed recently in various contexts. It covers more than 1 million employees and brings together about 10 different pay negotiating groups. When I wrote pay claims for those groups, it was a nightmare because the structure was so complex. The programme covers ancillaries, admin and clerical, professional and technical, ambulance and nursing staff, midwives and senior managers. It has taken four years to do the evaluation, which includes equal pay and equal value principles. It has been a massive and amazing exercise, but it will benefit NHS patients as well as 301WH employees. Bringing those groups together will mean less rigid demarcation; it will allow employees not to be disadvantaged if they change jobs because they can move within the pay bands. That will be a lot easier and better for the NHS.
The unions have agreed to carry out the first pilot schemes to ensure that everything works smoothly. If the NHS can do that, it cannot be impossible for other employers, with far less complex structures, to take such measures on board.
§ Mr. Mark Francois (Rayleigh)
Will the hon. Lady allow me to make a constituency point? I have two major call centres in my constituency, one of which is unfortunately in the process of making most of its employees redundant. As she will know, the bulk of call centre employees have historically tended to be women. Does she have examples—not necessarily from my constituency, but from elsewhere in the country—of unequal pay in call centres?
§ Judy Mallaber
That raises the issue of occupational segregation, to which I shall come shortly. It is one of the difficulties that result from men and women working in specific fields. It is difficult to implement equal pay in call centres unless one can find comparators within the same employer, although I am sure that employers can take up such issues.
Let me return to my previous point and give an example from the NHS pay agenda. Following the pay review, domestic supervisors are moving into a pay band that includes building and maintenance craftworkers. Domestic team leaders are moving up into a pay band with porter team leaders, security officers and storekeepers. As a result of last year's local government pay dispute, the Local Government Pay Commission is now moving towards introducing a similar exercise in local government. I think that we shall find that the agreements that were supposedly introduced on single status have not all been implemented, partly because of funding issues.
I have one question for my hon. Friend the Minister on public service pay reviews. Again, it comes back to the issue of contracting out. There is currently a dispute at the Royal Bolton hospital about cleaners being contracted out to work for a private company. There are agreements made under the Transfer of Undertakings (Protection of Employment) Regulations 1981, but they do not necessarily apply to employees for ever and they do not apply to new employees. The agreement on tackling the two-tier work force in local government was welcome, and I ask my hon. Friend to do all that she can to ensure that such agreements are extended to the NHS and other public agencies. Again, it is often women who lose out and become second-class citizens when work is contracted out to voluntary sector agencies or private contractors.
I return to the point about call centres. I have talked about the various facets of pay discrimination, but another major difficulty is occupational segregation. Pay audits can help to identify the impact of what is a major factor in pay inequality. More than 60 per cent. of women's employment is concentrated in just 10 occupations. I ask the Minister to look again at a proposal contained in the report on part-time workers 302WH that was published by the Select Committee on Education and Employment in the last Parliament. We suggested that such workers could use the concept of a hypothetical comparator, because many of them do not have anyone with whom to compare themselves. That is another issue that I shall put on to the table in the hope that we can return to it at some stage.
I want now to go beyond the public sector. I was talking to an employer in my constituency last week. I thanked him for the excellent evidence that he gave to the boundary commission in a case that we won. I took the opportunity to ask him about pay structures in his company, Bowmer and Kirkland, which is the largest privately owned construction and engineering group in the UK. He is very keen to ensure that all its employees and contracted companies get their construction industry training board construction accreditation certificate. I went to give out certificates last year, and John Kirkland, the chairman, was brave enough to do the tests himself while 1 was waiting to give out the certificates. He thought that he should lead by example and that, if he could not do the tests, there was no reason to think that his employees should.
I was pleased to give certificates to two women quantity surveyors, who were also there. The company has done well at pushing women into such jobs. Its subsidiary KeyBemo, which manufactures roof sheeting, has a woman UK operations manager. About 20 per cent of such posts in Bowmer and Kirkland are held by women, which is a very high figure for the construction industry. I understand from the House of Commons Library that there are so few female quantity surveyors that they do not feature in the labour statistics as a category. My local company, which is working very hard on training and is keen to promote women, still has only a minority of women in the jobs that are likely to attract higher pay.
§ Joan Ruddock
My hon. Friend makes an extremely important point about the entry of girls into construction and engineering in this country. It is appalling. Given the shortage of engineers and construction workers—some 17,000 vacancies are unfilled every year—surely that is a sector in which women and girls could find jobs and receive equal pay?
§ Judy Mallaber
I agree with my hon. Friend. She will be interested to know that, this morning, the Equal Opportunities Commission launched a formal investigation into occupational segregation, focusing on modern apprenticeships in five sectors including construction, plumbing, engineering, ICT and child care. I want to see men entering the burgeoning child care market as well as female plumbers and quantity surveyors, so the EOC launch is good news.
The employer that I mentioned, Bowmer and Kirkland, is working on a project at Landau Forte college. While it is there, the 50-year-old male site agent and the 20-year-old female quantity surveyor are taking the opportunity to go into the college to talk to the students about opportunities in the construction industry. That is a very positive example and my hon. Friend is right to mention the matter, which relates to my next point for the Minister.
The skills White Paper will provide an opportunity for us to focus on the issues. I hope that my hon. Friend the Minister will be involved in that debate and that will 303WH pick up the point of my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) about how we can ensure that the matter is taken up in schools. Education work has been done, and we need to push that forward so that boys and girls know what opportunities exist and are not shoehorned into particular jobs.
I shall not have time to focus on the third issue, which is just as important. It concerns unequal responsibilities within families and the long hours culture, which we say is such a bad idea although we all go along with it. We do not seek to pressurise people about the choices that are right for their families, but we need to keep pushing to make it easier for women and men to share family and work responsibilities, whatever choices they have made. We are looking to improve further on the welcome changes that have already been made, for example by introducing paid parental leave.
There is also a need to do far more about child care. We have done a great deal but there is still a long way to go. I invite my hon. Friend the Minister to congratulate Naomi Compton, who runs the early years unit in Derbyshire. Last week, she was named UK public sector manager of the year. Child care is an important area on which we must keep working.
The EOC states in its manifesto that it wants to halve the pay gap in five years. Unless we act on the range of issues that I have outlined, we shall not get there; we have not got very far yet. We have made progress, some of the legislation is in place, and a number of schemes are under way, but we need to act with huge determination in all areas if we are to start to cut into the problem. Let us do everything that we can, so that we do not return in another 33 years merely to say that we have not got very far.
§ Mr. John Bercow (Buckingham)
May I begin by congratulating the hon. Member for Amber Valley (Judy Mallaber) both on securing the debate and on her excellent speech introducing it.
I would like to think that the time will eventually come—not least as a result of the pioneering work of the Equal Opportunities Commission and others—when the cause of equal pay will no longer be seen as a source of partisan division between mainstream political parties. There is no reason to suppose that it need be a continuing source of friction. In arguing in support of equal pay, I shall divide my comments into two broad categories. First I will briefly focus on what the Government are doing with the public sector. Secondly, and more substantially, I will focus on the commercial sector. I will not at this stage be tempted to reply to the little tease, or taunt, from the hon. Member for Amber Valley on the national minimum wage. However, I fear that it will not be long before the itch is such that I will have to say something in response before I sit down.
First, I turn to the public sector. The Secretary of State for Trade and Industry and Minister for Women has often emphasised the Government's commitment to, and progress in, the conduct of equal pay reviews 304WH across Government Departments, non-departmental public bodies, and so on. That work is welcome. Progress has not been as speedy as some thought that it should be, but I do not quibble with the seriousness of purpose that the Government have shown.
There are a number of points to be made in relation to that policy. First—I hope that the Minister for Industry and the Regions and Deputy Minister for Women and Equality will accept this is the spirit in which the point is volunteered—we must have transparency from the Government. No Government can be allowed to be the judge of their own cause. If we are to judge the quality of what the Government have done, and the significance of the findings of the reviews, we need those reviews to be published. We have been told that a summary of the findings will be published. I politely put it to the Minister that it would be helpful for us to have the full details of all the reviews and all the findings of all the Departments, so that individual Members can assess the significance of the evidence.
Secondly, according to the Secretary of State when she spoke in the House on 1 May, significant evidence of what she described as serious problems of unequal pay has been unearthed. It is useful to know that the Government propose to institute action plans to deal with that. However, we need to know what those action plans will contain. It will be in the interests of informed public debate if those plans are published, and there is an opportunity to exchange views on them. Where discrimination in pay is relatively subtle and insidious, there will be pressure—and rightly so—for realignments of posts and regradings both within and between different parts of the public sector. We can make a judgment on how robustly the Government are tackling that problem, and the speed with which they propose to even out the discrepancies, only if we see those plans.
Thirdly, I endorse the call made by the hon. Member for Amber Valley for a broadening of the scope of the reviews to cover contractors. The hon. Lady touched on that point, but it bears underlining and repetition. In many cases, there is a labyrinthine structure within the public sector whereby a Government Department contracts out certain services to a particular company, and that contractor subcontracts the performance of the function to another organisation. In the spirit of the request by the hon. Member for Amber Valley, which I support, we need to know whether both the first contractor and the second contractor have conducted, or propose to conduct, equal pay reviews.
If the Government are committed to equal pay, and determined to demonstrate that through their behaviour, they should regard it as axiomatic that anyone who works for them should sign up to, and operate by, precisely the same principle. That will involve a degree of additional work—it will take time to extend the pay reviews—but in a thoroughly worthwhile and beneficial cause.
Fourthly, it is fair to exhort the Government to promote the policy. Those of us who work within the narrow and hallowed portals of Westminster and Whitehall tend to think that there is a much greater awareness of what we do than is actually the case. In the 305WH wider world, vast numbers of people are completely oblivious to the vast bulk of what happens on a day-to-day basis in Westminster policy making.
§ Mr. Henry Bellingham (North-West Norfolk)
My hon. Friend's point about bidding for Government contracts is relevant. Many good smaller companies in my constituency have proactively and successfully addressed the problem of equal pay, but do not often get the chance to go anywhere near a Government contract, whereas larger firms that subcontract, or even sub-subcontract, do not take equal pay seriously, yet get a lot of Government work.
§ Mr. Bercow
That is unsatisfactory, and it precisely underlines the force of the argument for extending the scope of the reviews.
The commercial sector is facing a critical challenge and is being offered a critical opportunity. The reasonable argument has been advanced that personal entitlements, social justice and equal pay policy should be pursued. I do not dissent from that argument, which is persuasive. However, it is worth while underlining the other prong to that argument: in the end, it is in the interests of business to practise a fair and equal pay policy.
Ultimately, people can choose an employer. If they see that a company operates fairly, gives them their due, and does not discriminate between men and women but operates on the principle of reward for merit, they are more likely to work for such a company than to work for a backward-looking, narrow-minded and thoroughly discriminatory operation.
For the commercial sector there are serious risks, which will grow, if it operates unequal pay policies. In general terms, the risks fall into two categories: direct costs and indirect costs. If companies are drawn into litigation, there are the direct costs of having to appear in court, of acquiring specialist expertise to guide them, of paying for legal representation, and of having to make often substantially backdated pay awards to one or more member of staff. There is also the prospect that if companies are found to have transgressed the terms of the Equal Pay Act 1970, they will have opened up a can of worms that will cause their activities in relation to a far larger group of staff to be probed and scrutinised. To avoid that eventuality, a company should accept head on its responsibility to operate fairly.
In addition to the obvious and direct costs, bad practice gives rise to indirect costs. It is sometimes difficult to quantify those costs precisely, but it seems to me, as I hope it will seem to others participating in the debate, that those costs are so obvious that only an extraordinarily obtuse individual could fail to recognise that they will be incurred. One such indirect cost is the lower productivity of workers who feel hard done by and not especially motivated, and will not work as effectively for the organisation as they might otherwise.
A second, related indirect cost is the lower productivity of managers who have to wrestle with the consequences of the internecine conflict incurred by the organisation's bad pay policy, instead of spending their time driving the business forward. The third consequence, which must have a negative effect on the effectiveness and harmony of the company, is poor 306WH workplace relations—a climate of suspicion, a sense of uncertainty, and an air of curiosity and cynicism about what other colleagues are paid.
The consequence that should be the most palpably significant to a business is the loss of reputation that the company suffers. In the end, businesses depend on the good will of the people who work for them, of their existing customers and of those who might be their customers in the future.
For all those reasons, companies should resolve to behave in an honourable and proper way as a point of principle and practicality—to behave in a way, I should underline, that the law has required of them for 33 years. The essential element of protection has been on the statute book since Barbara Castle's 1970 Act. Too often it has been honoured in the breach rather than in the observance. Secrecy about pay, which the hon. Member for Amber Valley touched on in her remarks, has tended to disguise the significance and scale of abuse. The fact that there is a significant level of abuse is surely no longer in question.
Issues of retention and recruitment are also involved. I have implicitly acknowledged that a company will struggle either to recruit or retain staff—or both if it does not operate a fair pay policy. To place the matter in context, so that nobody underestimates the importance of the phenomenon that we are debating, I shall highlight a statistic that has come my way from the EOC that is as significant as any that I have encountered.
On the basis of the commission's assessment, based on labour force surveys and workplace trends that it has observed, by 2010 only 20 per cent. of the work force will be white, able-bodied, male and under the age of 45. I was very struck by that statistic. Already, 53 per cent. of women with children under the age of four and 70 per cent. of women with children under the age of 10 are in the workplace. It is right that we should focus on the issue as a mainstream subject of public policy; it is a matter to which great urgency should be attached.
I have tried to make a non-partisan speech, because I believe that the Government do a lot of good work in that area. It is entirely proper that Ministers should be probed, scrutinised, harried and tested at every turn; if they expect otherwise—and I am sure that the hon. Lady does not—they are in for a shock. None the less, good work is being done.
I shall now focus on the work of the EOC. Since December 2001, it has had targets for the conduct of pay reviews. That harks back to a point that the hon. Member for Amber Valley made. The EOC has suggested that by the end of 2003, 50 per cent. of companies with 500 employees or more should have conducted equal pay reviews, and 25 per cent. of the rest of the commercial sector should similarly have undertaken such reviews. I am sure that that target, and the moral force behind the EOC's pronouncement has had an effect; yet even in the light of that—and the publicity that it has sought for its campaign—by March this year only 35 per cent. of large companies had fulfilled the brief. They do not have long to catch up if the EOC target is to be met by the end of the year.
Only 27 per cent. of medium-sized firms have done the right thing. Worryingly and disturbingly, 54 per cent. of large companies and 67 per cent. of medium-sized 307WH enterprises have not done the right thing, and we are advised that they have no plans to do so. That underlines the importance of a political focus on the issue, and on the Government injecting a degree of oomph into the publicity, and the communication of their own policy, of which I wager that only a tiny fraction of individuals and businesses in the country are currently aware.
Many companies have done good work—HSBC, Procter and Gamble, British Telecom, Unilever, PricewaterhouseCoopers, Camelot and Nationwide to name but a few. There is anecdotal evidence that has impressed me that they have been impelled on to the path of righteousness by the propagation of the policy by the Government. If the Government and the public sector give a lead and suggest that that is to be the normal pattern in the future, there is reason to hope that the commercial sector will follow.
I should love to indulge myself, and Westminster Hall, by quoting all sorts of companies that have put their commitment on the record. However, I am conscious that other hon. Members with a longstanding commitment to the subject would like to speak, so I shall resist the temptation. Suffice it to say that over the years, many companies have taken the view, "We're all right. We'll sign up to the principle, but there isn't a problem, so we needn't be preoccupied with the conduct of a review." If there were nothing wrong with their conduct of pay policy and they had nothing to fear from the conduct of the review, perhaps—but if there is something rotten in the state of Denmark, the sooner it is discovered, identified and corrected, so much the better for all of us.
The hon. Member for Amber Valley legitimately teased me about the national minimum wage. I make no apology for detailed probing and extensive scrutiny of the Government's position on the minimum wage, time-consuming though it proved to be. However, if in my mind facts change, I am willing to change my position. I am more than happy to concede, four to five years on, that my anxieties about the national minimum wage have been overwhelmingly demonstrated to be incorrect. I thought that there would be huge job losses. That is not a particularly newsworthy revelation on my part, because I have said several times in the House and elsewhere that the great shakeout of jobs that Conservative Members predicted has not taken place. The Government introduced the wage at a relatively low level, and I am thankful for that.
I shall make an additional point that meets the hon. Lady at least part of the way. The logic of the existence of the minimum wage is that it will be periodically and affordably increased. The increase that has been announced and will take effect in October this year is based on evidence from, and endorsement by, the Low Pay Commission. Several business representatives form part of that commission. The proposed increase is worth while, but it does not strike me as excessive. If it is to be affordable in terms of the state of the economy, the calculation has to be based on what the benefit will be to the people concerned, and the benefit to some of the lowest-paid people in our economy will be enormous. The damage to the economy from an increase in the 308WH minimum wage would have to be considerable to outweigh the benefit to some of the most vulnerable people in our society.
The hon. Lady focused on the fact that many people in receipt of the minimum wage are women, and that it has done something to reduce the pay gap. It has also done a good deal to improve the quality of life of the people concerned. As a practical Tory, I have no hesitation in saying that I have looked at the evidence, and the minimum wage has proved to be beneficial. My anxieties have not been fulfilled. I am willing to change my mind. To persist in pursuing an incorrect policy when the evidence shows that it is incorrect is foolish. To admit that one was previously incorrect and to change one's mind is wise. That is my position, and it does not require further elaboration.
I am delighted to have participated in the debate. I look forward to the day when I have persuaded and educated the bulk of my right hon. and hon. Friends in the Conservative party to such an extent that we can become champions of the fair treatment of equal pay and anti-discrimination policy in this matter, as in others.
§ Mr. Deputy Speaker (Mr. John McWilliam)
Order. Two hon. Members are seeking to catch my eye. I need to call the wind-up speeches in 16 minutes, and I am sure that those Members can divide 16 by two.
§ Sandra Osborne (Ayr)
Thank you, Mr. Deputy Speaker. I will attempt to be brief. It is a pleasure to follow the hon. Member for Buckingham (Mr. Bercow). It is refreshing to hear a Conservative Member giving such a commitment to equal pay. He certainly makes a good analysis of the business case for supporting equal pay and also of the changing structure of the work force. I agree with him that that is rather surprising and paints a very stark picture. Needless to say, it was also a pleasure to hear his description of his "road to Damascus" conversion in respect of the national minimum wage.
I congratulate my hon. Friend the Member for Amber Valley (Judy Mallaber) on securing the debate. It is an extremely important issue, in which unfortunately we have made little progress over the past 30 years since the Equal Pay Act 1970 was introduced. I argue, along with the EOC and others, that the legislation as it stands patently is not working and is in need of urgent review.
I shall endeavour not to repeat what has been said, because we are all working to the same EOC brief, for which we all grateful. Low-paid workers in our society are only too aware of the pay gap. As my hon. Friend outlined, they certainly benefited a great deal from the minimum wage, but not anywhere near enough to enable them to close the pay gap. I want to raise the issue of the pay gap suffered by young female graduates. They seem to be unaware of the gap and make the assumption that they will automatically be paid on an equal basis with their male colleagues. We know that that is not the case. The EOC has cited research that suggests that the annual salary of male graduates aged 20 to 24 is 15 per 309WH cent. higher than that of female graduates in the same age group, and that the gap becomes wider among older age groups.
For many of the younger generation of women, the old myth pertains that the battle for women's rights has largely been won. I believe that the secrecy in awarding salary packages perpetuated by many companies to which colleagues have referred, serves to obscure the reality that there is still a long way to go. The hon. Member for Buckingham described the process as subtle and insidious, which is a good way of describing the situation. We all know that it goes on, but trying to prove it and identify it is difficult.
The hon. Member for Buckingham also referred to statistics provided by the equal pay taskforce that, within eight years, the pay gap will be eliminated. However, we all know that that is not happening. We must make much more progress and we must review the relevant legislation. I understand that the Government pay reviews have been extensive and that a report is forthcoming by the end of July. Will the Minister confirm that when she sums up?
As the hon. Member for Buckingham said, many employers have no intention of conducting a review. That is not just complacent, but resistant. That is why the whole situation must be looked at again. My hon. Friend the Member for Amber Valley said no one wants compulsion, but I am not sure about that. If the present situation is not working and we find, while monitoring the position, that it is not getting any better, we should seriously consider that. We cannot wait any longer. We have waited 30 years and we must see much quicker progress.
Another issue that I want to raise is the single equality commission and the possibility of having a single equality Act. Perhaps the Equal Pay Act could be reviewed in that regard, but we all agree that the present equality legislation is piecemeal. It is not transparent. People do not know their rights or where to exercise them. I should welcome the Minister's comments on whether the Government will consider introducing a single equality Act.
In some respects, Scotland is leading the field with the help of some European funding. The close-the-gap initiative includes partners from Scotland, covering rural and urban areas. It has secured funding for three years to run an equal pay project in Scotland, which will work with employers to help them to institute pay reviews and to explode some myths about equal pay and related issues. Those involved in the initiative are also working with those affected by equal pay issues, and my main point relates to that. Those who are affected are women in part-time work, lone parents, women returners, ethnic minority women, women with disabilities, those who are disadvantaged through geographical location and those who live in areas of deprivation, or who are affected by a number of those factors. As my hon. Friend the Member for Amber Valley said, they are largely concentrated in female-dominated jobs, which have been traditionally low paid and regarded as secondary income to that of the main breadwinner in a household. However, we know that to be a complete myth, and out of step with the changes that have taken place in our society.
310WH I shall cite two examples, one of which affects the whole of the United Kingdom, and the other of which is currently taking place in Scotland. The two interconnected examples are of situations in which women, who are being discriminated against in pay and conditions, are fighting back, and I congratulate them on so doing.
My hon. Friend the Member for Lewisham, Deptford (Joan Ruddock) referred to term-time workers. I believe that a grave injustice has been occurring for many years in relation to term-time workers, who work mainly in education. Cooks, cleaners, teaching assistants, office and library staff are invariably low paid during term time and receive no pay during the holidays. They are a microcosm of women as the second sex in a labour market hallmarked by part-time, casual and temporary contracts and low pay.
Many hon. Members will be aware that, before the jobseeker's allowance was introduced, term-time workers could claim unemployment benefit during unpaid leave. However, they are now deemed to be in full-year employment but still receive only part-year pay. There is still a presumption that term-time jobs in education are for mothers making a bit of pin money to supplement another main breadwinner's wage. That is a vastly outdated and patronising view of women's place in the labour market and is highly discriminatory.
Every worker should get the rate for the job regardless of domestic circumstances. If we seriously accept that we need to tackle poverty pay and close the pay gap, the Government and employers must acknowledge their responsibilities towards that group. I congratulate the GMB, Unison and the Transport and General Workers Union on taking on that campaign, and I intend to support them.
I am very proud of the work that the Government have done in their introduction of universal nursery education for three and four-year-olds. That is one of our best achievements. However, as we know, nursery nursing is a job done almost exclusively by women, and nursery nurses have been very poorly paid for many years. There is, therefore, a contradiction between introducing universal nursery education and not addressing the issue of low pay among nursery nurses.
The hon. Member for Buckingham suggested that such issues can lead to a lack of motivation among the work force. The nursery nurses in Scotland have decided that they have had enough, and are currently taking industrial action in relation to their pay claim. However, perversely and unbelievably, not only are those nurses suffering from years and years of low pay, but their employers are considering introducing term-time working for nursery nurses, which would add them to the group of workers who are discriminated against on that basis. I believe that to be completely unacceptable, and I hope that the Minister agrees with me. I look forward to hearing her comments.
§ Mr. Deputy Speaker
Order. Before I call the hon. and learned Member for Redcar (Vera Baird), may I remind her that I have to reach the summing-up on the hour?
§ Vera Baird (Redcar)
Thank you, Mr. Deputy Speaker. I will jettison a large part of what I intended to say, and will focus on one important issue. I echo the 311WH congratulations that have been offered to the Government on the many dimensions across which they have encouraged and enhanced equal pay, of which the pay reviews are the most important and central. I look forward to the results of those reviews.
I congratulate my hon. Friend the Member for Amber Valley (Judy Mallaber) on securing the debate, and I echo what she said about the need, before contracts are signed, to oblige contractors to commit themselves to equal pay and to carry out pay reviews, as a condition of working in the public sector. That falls short of the compulsion that has been referred to as an inevitable last resort if progress is not made, but is an appropriate, constructive and prudent use of contractual leverage.
Another issue, which is similar to but somewhat different from the position of contractors who are, for instance, being used by a public authority, perhaps to run its canteen or to do its cleaning, is the trend—indeed, the deliberate policy—of having public services as a whole delivered by bodies other than public authorities; that is, they are not delivered by the public sector. Such measures as public-private partnerships, private finance initiatives, large-scale voluntary transfer of council housing, the introduction of public interest companies to run foundation hospitals and the use of private contractors to deliver more and more public services will put more and more people outside the ambit of government and public sector pay reviews. Government and the public sector are being cut back. I am not especially complaining about that policy, but the impact seems dangerous. It is essential that public sector and government pay reviews should be repeated, in order to ensure that pay discrimination does not creep back into the system. As time goes on and that element of policy develops, it seems that such reviews will affect fewer and fewer people, and narrower and narrower kinds of employment. That must not be allowed.
By a mechanism similar to contractual leverage on the part of smaller contractors, it is eminently possible to stipulate as a standard term of every PPP and PFI contract—and of part of the memorandum of articles of every public interest company—that there should be equal pay and that reviews must be carried out to ensure that it occurs. I shall be happy to be reassured that the proposals do not represent a limitation on public sector reviews, but if I am right and there is a hazard, the example that I have given will be slightly more than worrying, and will, I fear, be an example of how far equal pay is from being mainstreamed. Policies such as PFI, PPP and the private delivery of public services flourish without any regard to the vulnerability to which, by a side wind, they have exposed women workers, in particular, by removing them from the public sector. If I am right, the realisation that the policy has developed without sufficient regard to equal pay by means of accessibility to pay reviews will, in a sense, come only after the event.
I again congratulate my hon. Friend the Member for Amber Valley on securing the debate. It is hugely important to keep the detail high on the agenda, but, equally, I cannot close without congratulating the Government. I had thought of saying something clever about the fact that Government have done 18 times more during their six years of office than the last 312WH Conservative Government did in the 18 years that they had in office. However, since the last Conservative Government did precisely nothing, 18 times nothing would still be nothing. I shall therefore conclude by congratulating my Government on the progress that they have made.
§ Dr. Vincent Cable (Twickenham)
I add my congratulations to the hon. Member for Amber Valley (Judy Mallaber). The subject is very serious and deserves far more attention than 10 minutes at the end of Department of Trade and Industry questions once a month, which is what we normally devote to it, so I congratulate her on securing the debate and on the way she presented it.
The facts are not in dispute. The gender gap has been quantified: it is 20 per cent. in relation to full-time income, which has declined from 30 per cent. in the mid 1970s, and 40 per cent. in respect of part-time income, which has not declined at all in the last 30 years. We are therefore talking about a big disproportion in payment and no improvement in part-time work.
In my short time, I want to concentrate on two or three questions. Why are there not more women fat cats? That might seem a slightly odd question, but during the recent controversy I was struck by the fact that a woman Secretary of State for Trade and Industry was pursuing a lot of rather dubious business people who were ripping off their shareholders and work force in large numbers and getting away it. All those business people, without exception, were men, which prompted me to look up some of the figures. Of the people in this country who earn more than £100,000 a year, which is probably not everybody's definition of a fat cat, but is the Liberal Democrats' definition based on our tax proposals, there are 285,000 men and 40,000 women. Only one in eight of the high earners are women. That is important statistically, because if 100,000 more women were earning £100,000 a year, the gender gap would close dramatically. More importantly, many of those people are employers, who will influence the ethos of hiring and recruitment in their companies.
I see this issue at first hand. My own family has a kind of reverse gender gap. My eldest son is an opera singer with an intermittent income. My younger son is a research scientist with no income, then there is me—I do not know whether MPs are regarded as highly paid. My daughter, on the other hand, is a high-flying commercial barrister. When she rolls up at the front door in her latest sports car, one is tempted to think, "Maybe gender does not matter any more." That makes her angry, and she explains, quite accurately, that there are probably three or four women in Britain of her age earning her salary in that occupation, whereas there are dozens and probably hundreds of men doing the same thing.
There were many obstacles on the way, from kindly barristers who metaphorically patted her on the head and said, "Don't you think you would be happier doing family law," to a macho culture that suggested that if you turned up for work later than 7 am and left before 313WH 11 pm, you were some kind of wimp. Many obstacles, which are institutionally embedded, are preventing women getting into the high-flying, high-earning jobs.
§ Mr. Deputy Speaker
Order. I am not trying to be picky, but it is not really appropriate for the hon. Gentleman to use the word "you" in that context.
§ Dr. Cable
Even more right.
Many of the problems arise in higher education. We have heard about some of the different levels of payment to graduates, but the problem is deeper than that. We know that more women than men are doing better at A-level and going into higher education. The question is, what do they do at university? An enormous amount of occupational segregation takes place at that stage. Women are highly disproportionately represented in the humanities, social science and certain kinds of bachelor of science courses, especially chemistry and biology. Men are heavily disproportionately represented in maths, computing, engineering and business studies. That matters.
Some useful research has been done for the university of Warwick, which suggests that people who do humanities—English literature and history—have a graduate income throughout their working lives of up to 10 per cent. less than they would if they had left school at 18 and gained a vocational qualification. In other words, although they may study an interesting subject, people who go through that kind of course penalise themselves financially by doing so. If we add the burden of debt, there are considerable financial penalties from making that choice.
It is possible, even in the professions, to see much occupational segregation that is damaging to women's career prospects. I have mentioned the law, but there is also the social sciences. I once taught undergraduates economics, and it always struck me that women were in the minority. An interesting article was published recently by John Kay, formerly the dean of Oxford business school, titled, "Why so few women do economics." He noticed that in a class of 100, it is typical to find no more than two or three women doing economics. On the other hand, in other social sciences, such as sociology and psychology, women are in the majority. He asks why that should be so, and what the consequences are.
Economics is not an intrinsically useful subject. Apart from John Maynard Keynes, few economists have gone on to make lots of money themselves. It is, however, a platform for a lot of highly paid jobs. Somebody with a good economics degree from a "good" university with a good maths background can go straight into a market analyst's job in the City with opportunities for a six-figure salary in two to three years. Without that background people will not get that kind of job. Women are completely out of that professional track. Many sophisticated choices must be made at A-level and at the 314WH point of university entrance. Those choices marginalise the vast majority of women from high-paid occupations—they will never be fat cats because they are making the "wrong" choices, although they might be right in other ways.
We need to address the issue of sending out the right signals. How many schools prepare young women for making certain choices at A-level, such as by steering them in the direction of studying maths? Maths opens the door to so many other things. Rather, they quietly encourage girls to study English literature, which might be interesting but does not hold the key to certain professions. That is just a thought. It is not at all clear that any progress is being made in addressing why women are not entering the highest paid occupations.
My second question is partly related. Why are there not more women academics? The answer is not obvious. Of all the careers that should be open to women with families, academia is an obvious attraction. It should be fairly flexible, as people can take work home—they can write academic articles there and read essays. One tends to assume that The Guardian-reading classes teach in universities so they will be fairly enlightened and there will not be any hidden prejudice.
However, the figures for the academic world are staggering. The gender gap is larger than average at more than 20 per cent. In the hierarchy of academic professions, 35 per cent. of all postgraduate students are women, and that goes down to 31 per cent. of lecturers, 16 per cent. of senior lecturers and 7 per cent. of professors. Those figures are not greatly different from those from before the first world war. For some reason, women are finding it extraordinarily difficult to make progress towards the higher rungs of the academic ladder in a profession that at first sight seems open, and in which large numbers of women are now becoming qualified because of their graduate status.
§ Mr. Bercow
I am rather shocked by what the hon. Gentleman said. Is there any evidence that the phenomenon that he describes is worse than average in the traditional universities, as one might suspect?
§ Dr. Cable
I do not think that that is the case. The university that comes out worst of all is the university of London, and in particular King's college. There might be all kinds of reasons for that, but that is what the figures show.
I do not know what the answer is. Nobody seems to be clear what it is. It might be something to do with the decline in specialist girls' schools and colleges at universities, which might prepare them for an academic life. It is most likely due to the fact that universities, like the civil service, operate on the basis of salary increments—an old-fashioned way of rewarding length of service rather than quality of performance or productivity. A man who has served 20 years without interruption will be on a higher rung of the ladder than a women who has served 10 years and has taken 10 years out to look after children. Women are therefore permanently depressed in the career structure. Since the Government are the main funding source for universities and will expect something back for their substantial contributions, I hope that they will examine that.
315WH My final point relates to what is happening in the civil service. The Government have carried out useful survey work in the civil service, and have found that the pay gap, at 27 per cent., is bigger than it is in the economy as whole. If the Government are driving a gender equality agenda, as they are and should be, why is more not being done in precisely the area over which the Government have some control, as opposed to the area of small business where their control is indirect? I do not know the answer to that, but I suspect that the Minister might be able to tell us. I suspect that it has a great deal to do with the nature of bureaucracy, which rewards long service and incremental progress through a 30-year service in full-time employment. That does not take into account the flexible work patterns that most women, reasonably, seek. If the Government are to make a breakthrough in gender equality, they must consider their own employees. I hope that the Minister will indicate how much progress is being made in that respect.
§ 3.9 pm
§ Mr. Henry Bellingham (North-West Norfolk)
This is an important matter, and I congratulate the hon. Member for Amber Valley (Judy Mallaber) on the impressive way in which she opened the debate. I also congratulate the new Minister on her appointment. I have seen her in action in Committee and written her hundreds of letters, which have always received quick responses, so I can testify to the fact that she did a superb job in her previous post. I wish her well in her interesting new assignment and in her role as Deputy Minister for Women and Equality.
One of the most important points that has been made was voiced by my hon. Friend the Member for Buckingham (Mr. Bercow), who rightly pointed out that a contented work force will be motivated and satisfied, will create more wealth, and lead to a happier business community, whereas workers who feel hard done by will not realise their potential and will require a substantial diversion of management time.
The official Opposition feel strongly that the Equal Pay Act should be adhered to. It is more than 30 years old and it was the last Act of any significance passed by the Labour Government before they lost the 1970 election. The 19 per cent. pay gap for full-time staff and the 41 per cent. pay gap for part-timers have been mentioned. The hon. Member for Amber Valley pointed out that we hear a lot about the high-profile cases. However, there are cases every day throughout the country involving people who have suffered unfair discrimination. To an extent, they a re overshadowed by the high-profile cases that hit the news and make the headlines. A string of tribunal cases has featured in the tabloid press, some successful, others not.
Pay discrimination is sometimes stark and obvious, but it is often much more subtle. It can result from differential bonus rates or from anachronisms in the way in which posts are graded within an organisation. It is instructive to examine other figures. While 60 per cent. of women and 79 per cent. of men aged between 16 and 64 are in employment, only 48 per cent. of working-age women who have a child aged under two are in 316WH employment, compared with 90 per cent. of men with a child aged under two. That is a staggering difference.
The conclusion that I draw from those broad statistics is that, at any one time, many female employees are taking maternity leave—paid or otherwise—that, indirectly, their careers are being held back and that some loss of earnings does occur. Action is needed to protect women to the greatest possible extent from unfair discrimination on their return from maternity leave. It is vital that we have a flexible labour market that allows mothers to go back to work as soon as they feel able to do so. Firms should be more proactive in that respect.
It is interesting to look at some of the other statistics. The secondary education gap that used to exist has not just been closed; it has been reversed. Last year's figures show that 57 per cent. of girls but only 46 per cent. of boys gained five or more GCSE grades A to C. So far as A-level passes are concerned, the figures are 41 per cent. for girls and 32 per cent. for boys. It is, therefore, even more important that we address the gender pay gap.
One of the other interesting points is that women are twice as likely as men to work in the public sector. In fact, 32 per cent. of working-age women in employment work in the public sector, compared with 16 per cent. of working-age men. That is why it is important to focus on the public sector, and in my closing remarks, I will do just that. I would like to hear what the Minister has to say about that.
The hon. Member for Twickenham (Dr. Cable) said that the pay gap in the public sector is 27 per cent. I had no idea that the figure was as high as that. As my hon. Friend the Member for Buckingham pointed out—and it was also mentioned by the hon. Member for Amber Valley—the Government cannot be seen as a fair judge of the private sector until they can categorically state that they have got their own house in order.
There must be more transparency, and the Government must take the lead in that. I hope that the new Minister will work with the Secretary of State to ensure that Departments adhere to the best possible practice. I was in the House on 1 May. Department of Trade and Industry questions had just finished, and we then had questions to the Minister for Women. I was disappointed when the Secretary of State said that departmental reviewshave revealed serious problems of unequal pay and we are putting in place the action needed to put that right."—[Official Report, 1 May 2003; Vol. 404, c. 422.]The reviews have been promised, but will they be published? What will happen when various anomalies are identified? The Government promise action plans, but we need to know what those action plans contain. What regradings and realignment of staff pay will be recommended? Will the Government tell us where work of equal value is being unequally rewarded? Will the Government make it quite clear what remedies they will put in place to solve those problems?
Every hon. Member who has spoken has said that the scope of the Government's pay review must be broadened to go beyond the mainstream Departments. It must cover agencies, non-departmental public bodies, contracted-out staff, and, as was mentioned earlier, 317WH subcontractors and even sub-subcontractors. The Government are in a very important position as far as procurement is concerned. They procure billions of pounds of contracts every year. I do not wish to see another bureaucratic box-ticking exercise. I want an answer to a very simple question—has the firm in question conducted a pay review, and what were its results? There is an argument for the Government to disqualify certain applicants from the public procurement process. I would be grateful if the Minister would comment on that because it is vital that the Government promote equal pay more vigorously.
People in the top companies in this country and even those who know how Whitehall works have no idea that the Government have recently launched equal pay questionnaires. Why have the Government been so laid back about promoting their reviews? Why have they been so low key? Is it because the Government have been secretly embarrassed by their lack of progress? I would be grateful if the Minister could comment on that.
As at least four hon. Members have said, we support what the Government have done so far, but it is vital that they become more proactive and make an effort to put their house in order. If they do that, the Opposition will support them because we want to get on to the other agendas, particularly burdens on business, red tape and regulation. We will no doubt return to those matters for debate in this Chamber. However, today, we support what the Government have done, but would like to see them do a great deal more.
§ The Minister for Industry and the Regions and Deputy Minister for Women and Equality (Jacqui Smith)
I join in the congratulations for my hon. Friend the Member for Amber Valley (Judy Mallaber) on securing the debate, and I am pleased to have the opportunity to respond on behalf of the Government. This is not my first outing in my new ministerial role, but it is my first outing as Deputy Minister for Women. All hon. Members have identified today's debate as dealing with a crucial issue that must be addressed.
Time is short and I do not intend to repeat the statistics that hon. Members have rightly prayed in aid. It is not only morally right that men and women receive equal pay, but, as the hon. Member for Buckingham (Mr. Bercow) correctly pointed out, it is right for business and society.
Hon. Members have outlined the range of factors that contribute to the pay gap, which obviously means that we must take a range of action. Several Members have rightly turned the spotlight on to the Government. We take the findings on the pay gap seriously, which is why we are taking action to put our house in order. I was glad that my hon. Friend the Member for Amber Valley highlighted the considerable progress made in the NHS, where our approach to public sector pay enabled us to deliver on both the commitment to equal pay and the flexibility of public services, which is crucial.
Several hon. Members have referred to the cross-Government equal pay review in which the Cabinet Office is taking the lead. I can tell hon. Members that 79 Departments and agencies, representing 92 per cent. of the 500,000 civil servants employed by the Government, have already submitted their action plans to the Cabinet 318WH Office. The rest will be submitted shortly and are being chased vigorously by the Cabinet Office to ensure full coverage.
Without wanting to blow my new departmental horn, it is worthwhile pointing out that the Department of Trade and Industry HQ audit was one of the first to reach the Cabinet Office and that we have received very positive feedback. Likewise, all the DTI agencies and non-departmental public bodies have completed their plans.
The Cabinet Office is working closely with Departments over the details in their action plans and will—this relates to the transparency issue—publish a summary report of the findings by the end of July. The hon. Member for Buckingham pushed us on that issue, but it is for individual Departments to make the details of their pay reviews available given the delegation of pay responsibilities across the Departments. The Cabinet Office recommends that the details should be placed in the Library once discussion is completed.
The Government are also committed to encouraging the rest of the public sector to do likewise. On top of that, they have drawn together for the first time what Departments are doing to address gender equality as a whole. The report "Delivering on Gender Equality" was recently published, and we are introducing equality targets, which will be backed up by that action plan. The Government are showing their commitment to gender mainstreaming in all key spending Departments. That relates to the important issues raised by hon. Members about how we can ensure that those directly employed by the public sector benefit from the emphasis on equal pay and about how we can ensure that that is extended into the private sector.
My hon. and learned Friend the Member for Redcar (Vera Baird) made an important point about the relationship between Government policies for the private sector to build capacity and our ability to ensure equal pay. The issues around the use of procurement are tricky, but hon. Members have made a strong case. To ensure that the commitment to equal pay across the public and private sectors feeds through properly, we have set a target for the first time in the "Delivering on Gender Equality" plan. It says:The Government will work with businesses and trade unions, the Equal Opportunities Commission (EOC) and Opportunity Now towards ensuring that 35 per cent. of large companies have done pay reviews by 2006".The hon. Member for Buckingham was overly sanguine about the current position, because that target would double the number of large companies that have completed pay reviews.
I acknowledge what hon. Members have said about the need for the Government to lead by example and to communicate what is happening. We need to do that in partnership with business and the unions, which is why we provided the EOC with £100,000 to prepare a toolkit for voluntary pay reviews, which was launched in July 2002.
I recognise the important contribution of my hon. Friend the Member for Cardiff, North (Julie Morgan), who chairs the all-party group on sex equality. She raised the issue of small businesses. A separate system is also being developed for small businesses.
319WH I take seriously the need to make practical what businesses do to address equal pay. We worked with the EOC in making changes to its code of practice on equal pay, and we support the equal pay forum, which is organised by Opportunity Now and the EOC and which promotes equal pay reviews among employers. Members must be committed to carrying out, or have already undertaken, an equal pay review in order to join.
My hon. Friend the Member for Amber Valley is right to highlight our work with trade unions. We gave more than £250,000 to the TUC to train workplace equal pay representatives. I am sure that my hon. Friend understands that I cannot pledge money far into the distance, but I hope that the fact that we extended the project from one year to two years and have given a commitment to working with trade unions will give her some reassurance.
Hon. Members have also rightly identified pay segregation as part of what leads to a pay gap. More than 60 per cent. of women are still concentrated in just 10 occupations. Those occupations are typically the ones that pay the least: for instance, sales assistants, secretaries, child carers, cooks and caterers. If those 10 occupational groups are taken out of the equation, the pay gap in relation to the other 40 per cent. of women closes dramatically to just 8 per cent. That is why I warmly welcome the EOC's general formal investigation into occupation segregation in training and work. I look forward to seeing the result. I note that the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Bury, South (Mr. Lewis), who is the Minister responsible for skills, also welcomed that investigation today and said:We are committed to creating far more high status vocational learning opportunities for young people. Therefore we'll be interested to consider any barriers which may inhibit this ambition.I have covered some of the concerns raised by the hon. Member for Twickenham (Dr. Cable). His contribution made me wonder whether, given that I chose economics over English literature at the age of 18, I should be 320WH benefiting more in terms of pay than I am. However, the importance of my current role is far above the financial recompense that I receive for it.
Another important point was made by several hon. Members, including my hon. Friends the Members for Lewisham, Deptford (Joan Ruddock) and for Amber Valley. It relates to how we encourage women—and indeed men—into sectors of employment in which they are under-represented. In delivering on gender equality, for the first time, we are setting a target and taking action in relation to that area. That is an important way in which to ensure that we address the gender pay gap that stems from job segregation and the historic approach to where men and women work. We should break down assumptions about men's and women's jobs.
I was glad that hon. Members on all sides referred to the national minimum wage. The national minimum wage—now welcomed by converts on the Opposition Benches—has been extremely beneficial to women at the lower end of the pay range. Some 70 per cent. of the beneficiaries are women.
My hon. Friend the Member for Ayr (Sandra Osborne) raised the important issue of term-time working. Colleagues in the Department for Education and Skills are currently considering future roles and career structures for school support staff. They are working closely with local government employers and with support staff unions.
The hon. Member for Twickenham asked how we could ensure that there were more women at the top. I am sure that he will be aware of the report published by Laura Tyson last week. We welcome that and want to build on its recommendations.
Unfortunately, I do not have time to talk about the other important ways—promoting flexible working, extending maternity pay and ensuring that women, and men, have the choices that they need to balance work and family life—in which we can tackle some of the issues of discrimination.