Contribution
My hon. Friend is absolutely right. If our ambition is to make the workplace fairer and secure it for everybody, we should take the opportunities laid before us. That is one opportunity to ensure that we not only close the gap but make workplaces fairer.
There was one case that was easy to identify as a trade union official: men were called chefs and women were called cooks, and chefs were paid a higher rate than cooks. That was an easy one, once we could figure out what was going on. A more difficult case was that of Kay, who said:
“I had been working as a chef with a large catering company for ten years. During a casual conversation, my colleague mentioned he was being paid £22,000 a year. This was £6,000 a year more than me. I thought the right to equal pay would mean I was being paid fairly. For years, I went to work each day without knowing I was being paid less than those I was working alongside. I am not an isolated case. I know there are many women who, like me, don’t realise they are experiencing pay discrimination.”
That picks up on the point made by my hon. Friend the Member for Liverpool Riverside (Kim Johnson). The law is there, but if someone does not know what the person next to them, who is doing the same job, is paid, they could be discriminated against.
Some people will say that some men and women do different jobs, different types of work or different hours. The law says the “same work” or “work of equal value”, but even when men and women work the same hours and in the same roles, nearly two thirds of the gender pay gap remains unexplained. That points to pay discrimination, which we must tackle as a Government. How do we tackle that and move faster towards security, fairness and equality? One way is transparency. It is important for people to know who is being paid what and why. We should introduce the right to know. In Kay’s situation, she should be able to see how much X is being paid and know that there is a £6,000 pay deficit. We also need actionable and enforceable action plans. Again, an organisation may have identified a pay gap, but unless it has committed to closing that gap, that probably will not happen. Another way companies can do that is by assigning it as a key performance indicator. We have found that when organisations assign that to somebody as a KPI, real action is taken and pay gaps begin to close.
The Government have a huge role to play not just through legislation, in terms of the Equal Pay Act and so on, but by securing the circular economy. The Government can have an active role in making the workplace fairer by ensuring, as has been done in some areas, that they give contracts only to companies that pay people well and fairly and do not have a pay gap. So the Government’s procurement contract processes can ensure that they give contracts only to companies that follow good practices, which will enrich the circular economy. This is not just about doing the right thing. Companies that pay people well and employ the right people for the right jobs generally have a 15% higher profit margin than their nearest counterparts. That also plays out in the fact that a lot of young people are becoming socially informed, so they like to shop with companies that have good ethics and consider climate change. This approach will benefit everybody and is good in itself.
As I come to the end of my speech, some may wonder why I have not mentioned fines. The Minister may correct me, but to my knowledge no company has been fined for its gender pay gap. Unless that part of the law is strengthened, it is meaningless. I am interested to know how we can ensure that we fine companies that are not closing their pay gaps, and what the Government plan to do with any money that is collected.
There is a stark difference across UK regions, with some doing better than others. London has the largest ethnicity pay gap, which currently stands at a whopping 23.8%. That is appalling in one of the most diverse capital cities in the world and the financial capital city of the UK. As chair of the London parliamentary Labour party, I want to accelerate the move towards closing those pay gaps. I commend Dianne Greyson, founder of #EthnicityPayGap, for her work on that.
As chair of the all-party parliamentary group on governance and inclusive leadership—GAIL—I launched a maturity matrix in Parliament. That guide is available online for free for companies to implement in their workplace. It takes them through various stages to recognise and close pay gaps. That has been so successful that companies have asked for it to be expanded for disability and other things, which is currently being done. That is a free resource because, ultimately, we want better and fairer workplaces.
People should be paid fairly on merit. No one should be paid less for their work because of their gender, colour of their skin, ethnicity, background, accent, size, age or class. If we get this right on gender, ethnicity and disability, we will create a better and fairer work environment for all.