Gender pay gap data transparency has been a long time coming. Photo: Getty
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Is David Cameron serious about closing the gender pay gap?

The Prime Minister is re-announcing pay transparency measures formulated by the coalition – is it just a gesture?

David Cameron is warning big firms to have a better approach to their female employees – with a policy he nicked from a former female colleague. Kind of.

He plans to force companies with 250 employees or more to publish the pay gap between their male and female employees. Pay transparency to challenge the gender pay gap is a measure the Lib Dems were pushing through in the dwindling days of the coalition, championed by then Women & Equalities and Business Minister Jo Swinson.

The pay gap in the UK for all employees (full-time and part-time) is currently 19 per cent, measured by median gross hourly pay. You will also come across the assertion that the gender pay gap is 9.4 per cent, but this doesn’t count part-time workers (more of whom are women).

The government is always keen to point out that the gender pay gap is at its “lowest on record”, but it has shifted very little in the past five years, and actually widened in 2012-13 for the first time since 2008.

One former minister of the last government is scathing about the government championing its record on the subject: “yes the gender pay gap’s coming down,” they tell me. “But I think there can be a bit of a sense of complacency when we say it’s at its lowest ever – well yes, fine, that’s good, but there being a gender pay gap, let alone one that’s 19 per cent, is not acceptable.”

So is the Prime Minister really serious about tackling unequal pay?

Here’s his explanation of his policy – formulated at the end of the coalition and promised in the Tory manifesto – in an article in today’s Times:

We have already introduced equal pay audits for those companies that have lost employment tribunals. But today I’m announcing a really big move: we will make every single company with 250 employees or more publish the gap between average female earnings and average male earnings. That will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.

The pledge from the Tory manifesto:

We want to see full, genuine gender equality. The gender pay gap is the lowest on record, but we want to reduce it further and will push business to do so: we will require companies with more than 250 employees to publish the difference between the average pay of their male and female employees.

And here’s Section 78 of the Equality Act 2010, which refers to equal pay but has never been enacted in a way that has forced companies to fix their pay gaps:

(Click to enlarge).

Swinson, who held the Business and the Women & Equalities brief in 2012-15, was at the forefront of persuading her Conservative colleagues to take the issue seriously.

“My first thought was ‘this looks familiar’!” is how the former MP reacted to Cameron’s re-announcement of the policy she and her colleagues managed to push through in March.

“It was very frustrating in government when, for the best part of five years, the Conservatives were opposed to taking these steps on the gender pay gap,” she reveals. “But nonetheless it’s always positive to see the Prime Minister and senior politicians recognising the importance of this, not just for fairness of women, but for our economy more widely.”

She decries the Conservatives’ “obsession that the voluntary approach was going to solve it . . . Back when the equality strategy was being negotiated at the beginning of the coalition, this was one of the issues that Nick Clegg and Theresa May were negotiating on, and we were pushing for our policy on pay transparency to be implemented, and in the end, the best we could achieve was that we would try the voluntary approach and if that didn’t deliver, it would be reviewed.”

Giving companies the option of voluntarily disclosing their gender pay gaps didn’t work; only five firms ended up publishing the information.

Although Swinson is in favour of Cameron’s move to make it compulsory, she stresses that the policy alone will not solve the problem. “It has to be looked at as part of a wider set of measures; this measure on its own is very, very valuable but it’s not a silver bullet, and there is no silver bullet, because the pay gap is very complex,” she says.

Swinson praises the current Equalities Minister, and Education Secretary, Nicky Morgan for being "passionate" about the subject, but also warns that "there are definitely voices within the Conservative party who don’t see this as a business issue, who don’t see this as something that is holding back the UK economy, and think that it is something of a distraction. You can only hope that over time those voices will diminish."

There is a distinct lack of detail about how the policy will work, because it is under consultation. A government spokesperson tells me:

A consultation, launched today, will look at the detail of how the new gender pay gap regulations will be designed, including what, where and when information will be published.

And the “what” here is crucial.

“The devil is really in the detail,” says Belinda Phipps, chair of the Fawcett Society, a women’s rights campaign group that has long been campaigning for equal pay. “It doesn’t actually say anything specific at all in the actual law."

She explains:

Those who have published a pay gap voluntarily have taken employed people – excludes the partners – and have taken their basic salary – and that excludes bonus and overtime, which we know already is different for men and women – and they’ve calculated the median for women and the median for men, which is an odd average to choose, and the compared the two. It doesn’t actually tell you very much at all and it’s very easy for you to game it.

Comparing medians leaves room for a company to use the employment of low-paid men, or the awarding of more bonus than salary to highly-paid men, to reduce how wide its gender pay gap appears.

The Fawcett Society and other campaigners are calling for tight regulation requiring companies to publish specific data – not simply the gap, but the maximum and minimum salaries for each type of job by gender, taking into account bonuses and overtime, and looking at gaps in terms of mode, mean and median. “That tells you a different story,” says Phipps.

Phipps is optimistic that the government will respond to pressure from campaigners for such tight regulation, but others are not so sure. Shirley Wright, a partner at the Eversheds law firm who has specialised in equal pay cases for over ten years, predicts that the government will shy away from forcing companies to publish the data in great detail.

“My gut feeling is it will lead to an overall figure rather than details,” says Wright, who has conducted a number of contested equal pay matters for public and private sector employers.

She adds:

They will I think keep the door open for employers to provide more detail than they have to . . . If I had to bet, I think businesses will be given the opportunity to do it, but I don’t think they’ll be forced to, I think the government will be alive to the potential burden on business . . . It could be quite time-consuming for particularly large employers to number-crunch and understand what the gender gap is at different levels, but it’s more meaningful if you do that.

Wright also suggests that if the government decides on fining companies who don't comply, it won't be a significant amount. “I don't think the penalty would be very high. And a low fine in itself won't achieve the objective. I have heard it said, definitely not amongst my clients, but I have heard it said that if it's only going to be a £5,000 fine, better doing that than incurring the time to produce the data that could result in litigation."

Other EU states are way ahead of the UK in terms of enforcing salary transparency. In some countries, like France, failure to comply with rules to regularly assess pay practices and pay differences and draw up an action plan for equal pay results in financial sanctions. And in Denmark, all companies with ten or more employees are required to conduct a gender audit to compare salaries of women and men and publish annual statistics, or they will potentially face a fine, or even criminal action.

Considering the Equal Pay Act was passed 45 years ago, and many fellow European countries have already legislated for gender pay gap transparency, it looks like Cameron’s announcement this week is the least he could do, and the longest he could have left the situation before intervening.

As Phipps concludes: “It’s hardly a cause for celebration because it is so long overdue.”

Anoosh Chakelian is deputy web editor at the New Statesman.

Photo: Getty
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Ken Livingstone says publicly what many are saying privately: tomorrow belongs to John McDonnell

The Shadow Chancellor has emerged as a frontrunner should another Labour leadership election happen. 

“It would be John.” Ken Livingstone, one of Jeremy Corbyn’s most vocal allies in the media, has said publicly what many are saying privately: if something does happen to Corbyn, or should he choose to step down, place your bets on John McDonnell. Livingstone, speaking to Russia Today, said that if Corbyn were "pushed under a bus", John McDonnell, the shadow chancellor, would be the preferred candidate to replace him.

Even among the Labour leader’s allies, speculation is rife as to if the Islington North MP will lead the party into the 2020 election. Corbyn would be 71 in 2020 – the oldest candidate for Prime Minister since Clement Attlee lost the 1955 election aged 72.

While Corbyn is said to be enjoying the role at present, he still resents the intrusion of much of the press and dislikes many of the duties of the party leader. McDonnell, however, has impressed even some critics with his increasingly polished TV performances and has wowed a few sceptical donors. One big donor, who was thinking of pulling their money, confided that a one-on-one chat with the shadow chancellor had left them feeling much happier than a similar chat with Ed Miliband.

The issue of the succession is widely discussed on the left. For many, having waited decades to achieve a position of power, pinning their hopes on the health of one man would be unforgivably foolish. One historically-minded trade union official points out that Hugh Gaitskell, at 56, and John Smith, at 55, were 10 and 11 years younger than Corbyn when they died. In 1994, the right was ready and had two natural successors in the shape of Tony Blair and Gordon Brown in place. In 1963, the right was unprepared and lost the leadership to Harold Wilson, from the party's centre. "If something happens, or he just decides to call it a day, [we have to make sure] it will be '94 not '63," they observed.

While McDonnell is just two years younger than Corbyn, his closest ally in politics and a close personal friend, he is seen by some as considerably more vigorous. His increasingly frequent outings on television have seen him emerge as one of the most adept media performers from the Labour left, and he has won internal plaudits for his recent tussles with George Osborne over the tax bill.

The left’s hopes of securing a non-Corbyn candidate on the ballot have been boosted in recent weeks. The parliamentary Labour party’s successful attempt to boot Steve Rotheram off the party’s ruling NEC, while superficially a victory for the party’s Corbynsceptics, revealed that the numbers are still there for a candidate of the left to make the ballot. 30 MPs voted to keep Rotheram in place, with many MPs from the left of the party, including McDonnell, Corbyn, Diane Abbott and John Trickett, abstaining.

The ballot threshold has risen due to a little-noticed rule change, agreed over the summer, to give members of the European Parliament equal rights with members of the Westminster Parliament. However, Labour’s MEPs are more leftwing, on the whole, than the party in Westminster . In addition, party members vote on the order that Labour MEPs appear on the party list, increasing (or decreasing) their chances of being re-elected, making them more likely to be susceptible to an organised campaign to secure a place for a leftwinger on the ballot.

That makes it – in the views of many key players – incredibly likely that the necessary 51 nominations to secure a place on the ballot are well within reach for the left, particularly if by-election selections in Ogmore, where the sitting MP, is standing down to run for the Welsh Assembly, and Sheffield Brightside, where Harry Harpham has died, return candidates from the party’s left.

McDonnell’s rivals on the left of the party are believed to have fallen short for one reason or another. Clive Lewis, who many party activists believe could provide Corbynism without the historical baggage of the man himself, is unlikely to be able to secure the nominations necessary to make the ballot.

Any left candidate’s route to the ballot paper runs through the 2015 intake, who are on the whole more leftwing than their predecessors. But Lewis has alienated many of his potential allies, with his antics in the 2015 intake’s WhatsApp group a sore point for many. “He has brought too much politics into it,” complained one MP who is also on the left of the party. (The group is usually used for blowing off steam and arranging social events.)

Lisa Nandy, who is from the soft left rather than the left of the party, is widely believed to be in the running also, despite her ruling out any leadership ambitions in a recent interview with the New Statesman.However, she would represent a break from the Corbynite approach, albeit a more leftwing one than Dan Jarvis or Hilary Benn.

Local party chairs in no doubt that the shadow chancellor is profiling should another leadership election arise. One constituency chair noted to the New Statesman that: “you could tell who was going for it [last time], because they were desperate to speak [at events]”. Tom Watson, Caroline Flint, Chuka Umunna, Yvette Cooper, Andy Burnham and Liz Kendall all visited local parties across the country in preparation for their election bids in 2015.

Now, speaking to local party activists, four names are mentioned more than any other: Dan Jarvis, currently on the backbenches, but in whom the hopes – and the donations – of many who are disillusioned by the current leadership are invested, Gloria De Piero, who is touring the country as part of the party’s voter registration drive, her close ally Jon Ashworth, and John McDonnell.

Another close ally of Corbyn and McDonnell, who worked closely on the leadership election, is in no doubt that the shadow chancellor is gearing up for a run should the need arise.  “You remember when that nice Mr Watson went touring the country? Well, pay attention to John’s movements.”

As for his chances of success, McDonnell may well be even more popular among members than Corbyn himself. He is regularly at or near the top of LabourList's shadow cabinet rankings, and is frequently praised by members. Should he be able to secure the nominations to get on the ballot, an even bigger victory than that secured by Corbyn in September is not out of the question.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.