Prime Minister: My one nation government will close the gender pay gap

14 Jul 2015 01:58 PM

The Prime Minister will today (Tuesday 14 July) set out his ambition to “end the gender pay gap in a generation”. 

There are now more women-led businesses than ever before, a record number of women in work, and the gender pay gap is at an all-time low - but the Prime Minister will say there is more to do.

The new National Living Wage, which starts next April at £7.20 and will reach over £9 by 2020, will primarily help women - who tend to be in lower paid jobs - and will help close the gender pay gap.

The National Living Wage was part of a Budget in which the government made clear its commitment to rebalancing the economy by moving from a high-welfare, high-tax, low-pay economy into a lower-welfare, lower-tax, higher-pay society.

Today the government is announcing further steps to tackle the gender gap:

• every company with more than 250 employees will have to publish the difference between the average pay of their male and female employees

• 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. It will also seek views on what more can be done to encourage girls to consider the widest range of careers, support parents returning to work and help women of all ages reach their full potential and have the security of a well-paid job

This comes as the UK’s FTSE 100 has reached the Lord Davies’ target of 25% of board positions being filled by women – set in 2011.

Writing in the Times today, the Prime Minister said:

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.

This goes back to what we announced at the Budget last week. Our aim is to fundamentally rebalance our economy – to transform Britain from a high-welfare, high-tax, low-pay economy into a lower-welfare, lower-tax, higher-pay society. Higher pay is something we want for everyone. That is why the Chancellor announced the National Living Wage, which starts next April at £7.20 and will reach over £9 by 2020. This will primarily help women, who tend to be in lower paid jobs. It will help close the gender pay gap. But we need to go further, and that’s why introducing gender pay audits is so important.

Transparency, skills, representation, affordable childcare – these things can end the gender pay gap in a generation. That’s my goal.

This government is providing a wide programme of support for women in the workplace, introducing 30 hours of free childcare, 20.6 million employees now able to benefit from flexible working, and the new careers service putting businesses in the lead and showing schoolgirls that no profession is off limits.

As part of the Budget, the Chancellor announced a further £1.1 million to help women take full advantage of all the opportunities that superfast broadband can bring to business – and today the government has announced the 16 successful local broadband projects across England which will deliver the scheme.

Secretary of State for Education, and Minister for Women and Equalities, Nicky Morgan said:

I am delighted that we have hit the target so that women now make up 25% of all FTSE 100 company boards. But while I am proud of the progress made, there can be no room for complacency when it comes to securing equality for women.

That is why today, we are committing to eliminating the gender pay gap in a generation. This is not just the right thing to do, it makes good business sense: supporting women to fulfil their potential could increase the size of our economy by 35%. To achieve gender equality we need to continue to inspire young women and girls so that they can compete with the best in the world for the top jobs – and see that their hard work will pay off.

John Allan, National Chairman for the Federation of Small Businesses, said:

Our research shows growing numbers of women are choosing to start-up in business, and there are more women directors than ever before. To help support this trend we need to keep up the momentum and break down the remaining barriers that prevent women progressing in the workplace and the boardroom, and so we welcome, and look forward to taking part in, the government’s gender pay gap consultation.

In the past, low wages have been one such barrier, discouraging many women from applying for roles. As the economy continues to recover, our research shows a clear trend of more and more small firms raising pay, with over half of our members already paying all of their staff the living wage or above. In addition, more small employers are offering flexible working opportunities to their staff, enabling parents to balance family life with pursuing a rewarding career.

Other supporters

António Horta Osório, CEO of Lloyds Banking Group, said:

Lloyds Banking Group welcomes the Prime Minister’s commitment to ending the gender pay gap within a generation.

At Lloyds, we want to attract and retain the best people regardless of gender. Women are a vital part of our workforce and we are working hard to support them at each and every level of their careers. Last year, Lloyds pledged to increase the proportion of senior management roles held by women to 40% by 2020.

Lloyds looks forward to working with the government on the consultation on gender pay gap reporting, to ensure the views of British business are taken into consideration when implementing this policy.

Michelle Mone OBE, founder of Ultimo, said:

This new requirement for larger companies to publicise their gender pay gap is absolutely fantastic. Women should rightly have the same expectation of good pay and progression as men, wherever they choose to work. Today’s announcement will highlight those companies where the pay gap is persisting. I hope this will empower women to challenge this state of affairs and ask why.

It is great progress that a quarter of people on FTSE 100 boards are women, and that’s without legislation or quotas. I hope that many other talented women will follow in their footsteps.

Notes to editors

A Treasury analysis of the impact of the government’s new national living wage announcement in last week’s Budget shows 65 % of winners are expected to be women.

The overall gender pay gap for all employees (19.1%) is the lowest since records began. It shows that a woman, on average, earns around 80p for every £1 earned by a man.

The proposed regulations will implement Section 78 of the Equality Act 2010 – this requires employers in Great Britain with at least 250 employees to publish information about the pay of their male and female employees. We plan to introduce this in the first half of 2016 and the consultation will explore how quickly it can be enforced.

In 2011, Lord Davies of Abersoch set the target for 25% women on boards after being asked by government to look at how to address the lack of women on FTSE boards. There are now no all-male boards left compared to in 2011.

Lord Davies will now work with industry experts to learn from the experiences of the past four years and make a series of recommendations on how businesses can continue to improve gender diversity.

The successful local broadband projects, as part of the Women and Broadband Challenge Fund, are: Cambridgeshire, Central Bedfordshire and Milton Keynes, Devon and Somerset, Dorset, Durham, East Sussex, Herefordshire and Gloucestershire, Greater Manchester and Cheshire, Kent, Leicestershire, Northumberland, Oxfordshire, Shropshire, Staffordshire, Telford, South Yorkshire, West Yorkshire.