UK must tackle gender pay gap

Many businesses may have breathed a sigh of relief this spring when the government rejected calls from the Equal Opportunities Commission for statutory pay audits to tackle the gender pay gap.

No doubt companies welcomed the deflection of another demand on management time, and many may not have relished the prospect of declaring the true state of their pay structures.

But the issue did not die when the EOC produced the conclusions of its employer-led report. Last week’s TUC Conference heard that the MSF will attempt its own audits in firms where it has members. Its move follows a threat of similar action by the T&G in the 22,500 firms where its members are employed.

Very soon the Kingsmill review into equal pay and job opportunities for women will report to the government on its view of the pay gap and what measures can be taken to address it. The review, chaired by deputy chair of the Competition Commission Denise Kingsmill, will not call for statutory action. But its recommendations will nevertheless hoist the issue higher up the employment agenda.

The UK has a woeful pay gap. Government statistics say that women earn 82p for every £1 of men’s pay. The last European-wide measurement of the gender pay gap found the UK to have Europe’s worst record, with women receiving only 64% of male earnings.

There are, of course, many contributing factors such as the greater responsibility women take for childcare. This can lead to career breaks and often a move to lower grade employment when mothers return to work.

Outright discrimination is probably rare. However, unspoken and possibly unconscious discrimination is far more common. The EOC has estimated that between 25% and 50% of the cause of unequal pay is some form of discrimination.

The Institute of Management this week trumpeted a five-fold increase in the number of women reaching management positions compared with a decade ago. But there are also strong concerns that women tend to go only so far in businesses – and a woman on a board of directors is a rarity.

Sadly, another rarity is business interest in bridging the pay gap. Only one in five of the companies visited by the Kingsmill review has opted for a voluntary audit of its employment practices. Such a poor response can only strengthen the argument for enforcement.

Yet businesses have much to gain from ensuring that their employees are treated equally. They are inevitably wasting the talent of their women workers. And they also face recruitment and training costs when they leave or do not return after childbirth because of frustration or resentment over their treatment.

A clearer commitment to equality would also avoid the negative publicity that will inevitably ensue from union probes into pay practices.

Christine Buckley is industrial editor of The Times