Equality Bill

Public Bill Committee, 23 June 2009.

Clause 38

John Penrose (Conservative, Weston-Super-Mare)

I beg to move amendment 213, in clause 38, page 28, line 2, after ‘worker’, insert

‘with a protected characteristic compared to a contract worker without a protected characteristic’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss amendment 214, in clause 38, page 28, line 10, after ‘worker’, insert

‘with a protected characteristic compared to a contract worker without a protected characteristic’.

John Penrose (Conservative, Weston-Super-Mare)

It is a pleasure to see you in the Chair, Mr. Benton, as we prepare to consider these measures. The amendments are multi-technical and seek clarification. During the evidence sessions at the start of our deliberations, there was some discussion with representatives of the insurance industry about contract workers. I want to clarify whether the Government are clear about the comparator for the clause and to know whether, when talking about discrimination against contractors, we are talking about discrimination against contracted workers without a protected characteristic or non-contract workers, such as regular employees, as the relevant comparator. I hope that the comparator that the Minister puts on the record is straightforward.

The evidence session a couple of weeks ago sounded a few warning bells in my mind, and it is important that we clarify matters. Without trying your patience too much, Mr. Benton, I want to highlight the fact that all members of the Committee are aware that separate measures that are before the House will impact on contract and agency workers, and I want to ensure that the Bill is not a stealthy way to achieve something that is supposed to be in those measures and that it will do what it is intended to do, rather than something broader. I hope that the Minister can put our minds at rest.

Vera Baird (Labour, Redcar)

Good morning to you, Mr. Benton, and to all members of the Committee. The provision is not an attempt to do anything stealthy of the type that has been mooted, although my response will be a tiny bit more complicated than my just saying no.

The clause makes it unlawful for “the principal”, the person who makes work available to contract workers, to discriminate, harass or victimise a worker. Amendment 213 would change the effect of the law by limiting the comparison by which discrimination was established to another contract worker. That would be the comparator.

However, clause 22 already establishes the fact that, as under the current law, the comparator must be someone whose circumstances are not materially different from those of the complainant. That is likely to be another contract worker, but it is not impossible that a claimant could seek to compare their treatment with that according to a permanent member of staff employed by the principal if there were, as clause 22 requires, no material difference between the circumstances in the case. It would be a question of fact about whether there was any material difference.

John Penrose (Conservative, Weston-Super-Mare)

To clarify the Minister’s point, it is important to understand what the similarities and the legitimate differences might be. I hope to hear reassurance that the legitimate differences might be that contract workers would be different because of the terms of their contract and the fact that they are not permanent employees and have different terms and conditions as a legal basis for their engagement with the principal. However, if the task that they are performing is, under the terms of the contract, the same as that of a full-time employee, that would be a fair comparison. In other words, we are not trying to eliminate the differences between contract workers and full-time workers, those being different forms of employment—both of which have a legitimate purpose and value in the workplace, and which we would not want to fudge or try to elide.

Vera Baird (Labour, Redcar)

The hon. Gentleman is absolutely right. The issue is protected strands and discrimination. Issues elsewhere relate to different contractual terms, which are often different between contract workers and employees, and there is no sneaking elision of the two.

May I speak to amendment 214 before I specifically say what the hon. Gentleman wants me to say? Amendment 214 would introduce a comparator to victimisation where no comparator is necessary at all, and it would turn current law on its head. I know that it is only a probing amendment, but I need to say that we could not possibly accept it, because it would have that peculiar effect.

On 8 May, the Department for Business, Enterprise and Regulatory Reform issued a consultation document on the proposed approaches to the European agency workers directive, which requires that agency workers be treated equally with permanent staff in the organisation in which they are placed after a qualifying period determined by member states, along with social partners. According to the directive, the qualifying period is to be 12 weeks. In our view, the document does not contain any policy risks in relation to the Bill.

The proposal is that protection be granted to agency workers as for a permanent staff member. It is to be decided whether a hypothetical comparison will be permitted as a comparator, but the entitlement will be to equal treatment with that comparator in terms of conditions of work. That is the directive, not the Bill. However, there might be issues from an employer’s point of view. The protection is distinct from that provided in the Bill, which is concerned with presenting less favourable treatment because of protected characteristics rather than because of the nature or conditions of the work. They are two completely separate policy streams. I hope that satisfies the Committee.

John Penrose (Conservative, Weston-Super-Mare)

I thank the Minister for that explanation. That is indeed the point I was driving at and she has explained that the two strands are entirely separate—one does not affect the other. It is important for businesses around the country to have that on the record, so I thank her for it. With that assurance, I beg to ask leave to withdraw the amendment.

Schedule 6

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I beg to move amendment 199, in schedule 6, page 170, line 9, at end insert

‘or other authorities of the GLA family’.

Vera Baird (Labour, Redcar)

Paragraph 2 of the schedule excludes political offices from the protection—available under clauses 46 to 48—against discrimination, harassment and victimisation. The provision ensures that essentially political matters, such as appointment to council offices or indeed to ministerial offices, do not come before a tribunal. There is a carefully drawn exclusion of specific offices in specific political settings, which include GLA offices held by the Mayor and members of the assembly. That is obviously a good thing.

The connection between election and offices in places such as the MPA is not so clear. Protection for people holding offices in such bodies will be available in any case only if the office satisfies the definition of a personal or public office for the purposes of clauses 46 to 48, or if it fits under any other provision in part 5, but it will not arise as a result of election.

The amendment would cause confusion between members of the authorities mentioned in it, some of whom are elected, although many are not. We think it would complicate the provision. In essence, the provision protects people who are elected, as opposed to those who get to their office in some different way, and it would be unlawfully regressive if the amendment were accepted.

The hon. Lady has made her point; she has probed the issue. I hope that she now appreciates the complexity of the matter and I invite her to withdraw the amendment.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I have listened carefully to the Minister. To clarify, is she saying that if someone is elected to the GLA and then appointed to the MPA, which is what happens to elected members on the GLA, they will not be protected?

Vera Baird (Labour, Redcar)

If it was a personal or public office, or if they were in employment, but otherwise not.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Okay. On that basis, I beg to ask leave to withdraw the amendment.

Clause 51

Vera Baird (Labour, Redcar)

I beg to move amendment 62, in clause 51, page 40, line 14, after second ‘a’, insert ‘relevant’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss Government amendments 63, 75, 76 and 77.

Vera Baird (Labour, Redcar)

The amendment inserts the word “relevant” before “qualification”, thereby making the wording more specific. I do not know whether there is any need to debate that.

Clause 52

Vera Baird (Labour, Redcar)

I beg to move amendment 226, in clause 52, page 41, line 12, leave out from ‘service-provider’ to end of line 14 and insert

‘, except in relation to the provision of a vocational service.’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss Government amendments 227, 64, 228 and 229.

Vera Baird (Labour, Redcar)

I call this the “back to the future” provision, which will restore the position as it was. Amendments 226, 227, 228 and 229 restore the position under the Disability Discrimination Act 1995 when it comes to reasonable adjustment placed on those providing employment services and vocational services. The amendment maintains the existing protection by obliging an anticipatory duty. Disabled people wanting to avail themselves of high street employment agencies or Jobcentre Plus need to be able to access the services on offer and receive information and advice in ways that are accessible to them.

Members who in an earlier debate were keen to test the effectiveness of the reasonable adjustment provisions will be reassured that there is no erosion of existing levels in that connection. The amendment also restates the position for enforcement of the duty to make reasonable adjustments in respect of vocational services as being via the employment tribunal. I suspect that that will also meet with people’s approval because it is usually thought of as being easier than the county court.

Amendment 64 concerns clause 53, which defines what the provision of an employment service does and does not include for the purposes of clause 52, which makes it unlawful to discriminate, harass or victimise someone when using such a service. We want to omit clause 52(3), which excludes from that clause employment services provided other than by way of a trade or profession. We want to do that because it is necessary to ensure that employment services provided by volunteers are also captured by the discrimination provisions.

All together, the exceptions ensure that the Bill is consistent with the position under current law, whereby in what capacity an employment service is provided is irrelevant—the appropriate duties are still on the provider.

Clause 53

Clause 56

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I beg to move amendment 244, in clause 56, page 43, line 38, at end insert—

‘(ca) a member of an authority in the GLA family;’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss the following: amendment 245, in clause 56, page 44, line 6, at end insert—

‘(m) a fire authority.’.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

We are back to the GLA. The amendment is probing and based on an earlier amendment. Amendment 245 probes the same issue to ensure that members of fire authorities across the country are protected against discrimination. It would be helpful if the Minister clarified where the members of other public authorities, such as police authorities and fire authorities, stand in terms of the clause.

Vera Baird (Labour, Redcar)

Let me explain the protection—I thank the hon. Lady for the amendments to facilitate that. Amendment 244 is to include authorities “in the GLA family” within the meaning of “local authority” for the purposes of protection under clause 55. The amendment would even include the members of those authorities in the definition of a “local authority”, so they would be prohibited from discriminating against themselves—but never mind, I appreciate that the amendment is probing.

Members of those bodies may be protected under clauses 46 to 48, in respect of the appointment and conditions of office if they are personal or public office holders, or under clause 36 if the relationship amounts to employment. However, clause 55 aims at elected members while they undertake official business. It harmonises the existing law, providing a limited exception to the exclusion of elected offices from protection under discrimination law, recognising the importance of prohibiting discrimination and enabling reasonable adjustments in the carrying out of official business by local authority members.

We have put a power in clause 56(3) whereby bodies that exercise functions conferred on local authorities may be added to the list, recognising the fact that many members of local authorities are subsequently appointed to other, quasi-local authority bodies to discharge some of the functions of the local authority. Ensuring that such members are protected from discrimination, victimisation and harassment in the carrying out of official business in respect of those bodies as well is right, because they operate effectively as an extension of the local authorities, the functions of which they are discharging. It is better to do that by secondary legislation, rather than in the Bill, for greater flexibility, given that local authorities change and the situation is dynamic. We shall consider what bodies should be included by means of the power, and we shall look at the ones referred to by the hon. Lady at that time.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I thank the Minister for that clarification. Having the provision put so clearly into words is helpful. On that basis, I beg to ask leave to withdraw the amendment.

Clause 58

Clause 59

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss the following: amendment 260, in clause 61, page 47, line 16, at end add—

‘(5) Where section [Relevant types of work (No. 2)] (2) applies, the provisions of this section will apply to the extent that a term of A’s is less favourable than a corresponding term of B would be, or that A does not have a term which B would have.’.

Amendment 261, in clause 62, page 48, line 27, at end add—

‘(11) Where section [Relevant types of work (No. 2)] (2) applies, the provisions of this section will apply to the extent that a term of A’s is less favourable than a corresponding term of B would be, or if a discretion in relation to A is capable of being exercised in a way which is less favourable than it would be in relation to B.’.

New clause 24—Relevant types of work (No. 2)—

‘(1) Sections 61 to 65 apply where—

(a) a person (A) is employed on work that is equal to the work that a colleague of the opposite sex (B) does;

(b) a person (A) holding a personal or public office does work that is equal to the work that colleague (B) of the opposite sex does.

(2) To the extent set out in sections 61 to 64, those sections also apply where A does not have a colleague B who does work that falls within subsection (1), because there is no such person of the opposite sex to A.’.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

This debate is about hypothetical comparators. The amendments would allow people to make a claim for equal pay when there is no real comparator. The argument is quite well-trodden—if one Googles “hypothetical comparator” on the parliamentary website, one can see that the discussion goes back through many forms of Committees over many years. This time round, I hope that we will make a change.

Traditionally, women who suffer unequal pay are at a significant disadvantage to other forms of discrimination, such as race and disability. It is the only type of discrimination regarding pay differentials where there is a particular requirement to propose a real comparator—to point to someone else to compare with, in the work that one is undertaking. That has proven—the TUC, the Fawcett Society and the Women’s National Commission agree—to be a significant obstacle where such a comparator does not exist. That happens when there is a majority female work force.

Professions dominated by females are often underpaid—cleaners, hairdressers, dinner ladies and many other female occupations. They often have a lower ratio of pay. Because there are virtually no men doing comparable jobs in comparable places, it becomes impossible to argue that the work is undervalued, because we cannot point to a real comparator.

For reasons of history and female economic inequality through almost every strata, women’s work is always given a lower price tag, even when men are doing equivalent tasks that require equivalent skills to those of a female-orientated job. The requirement is not imposed on other types of discrimination. For example, if someone is trying to prove race discrimination, they are not barred from claiming discrimination if they cannot find a real comparator. It is a discrimination within discriminations.

The Women’s National Commission, in its evidence, said that it is very much in favour of hypothetical comparators, and would like to see, as we would on the Liberal Democrat Benches—I suspect on many other Benches as well—the barrier removed from equal pay claims. The Fawcett Society said that that would make a huge difference. Will the Minister explain why there has been resistance to removing that barrier to equal pay, which has set women back so profoundly? I do not understand the rationale behind it, so I would welcome her response.

Sandra Osborne (Labour, Ayr, Carrick and Cumnock)

I would like to echo the comments of the hon. Lady. Getting equal pay has been a long-term problem. Many women are disadvantaged, especially those who are low paid and whose work is undervalued in our society. I also support the views of the TUC and the National Women’s Commission in relation to the matter. I would like an explanation from the Minister as to why the provision cannot be brought in to complete the Bill. I am sure that she has a good explanation, which I am looking forward to hearing.

Vera Baird (Labour, Redcar)

I know that there are a number of views on the matter. The Fawcett Society and the NWC are in favour of hypothetical comparators, as the hon. Member for Hornsey and Wood Green said. I will turn specifically to that. If anybody finds it helpful, I could set out the whole scheme of the chapter, but I think she put her finger on the point that she is really interested in, as did my hon. Friend the Member for Ayr, Carrick and Cumnock.

I hope that it would be helpful if I set out some examples that are usually given to support the need for hypothetical comparison in equal pay cases. The first kind of example is about gender segregation, which the hon. Member for Hornsey and Wood Green has already mentioned. The example is that in some work environments, as a result of gender segregation, no men are doing equivalent work to women. The suggestion is that if the women believed that they were underpaid, they should be able to claim on the basis that, were there a man doing that work, he would be paid more. The amendment would allow that.

One difficulty with that is what the evidence would be that a man in that situation would be paid more. If there is clear evidence, such as a statement by the employer to that effect, a claim would be a possible—we have made it so in clause 66—as that would be direct discrimination. There may not be many cases of that, but those that exist will be caught by the Bill. Any remaining gap would be in cases where the employer discriminates indirectly against a woman in relation to contractual pay.

The amendments demonstrate the difficulty of doing that. As I understand them, the amendments would permit a claimant to argue that B, a hypothetical employee doing the same or similar work, has a term in their contract that the claimant does not, or one that is better than the equivalent one that the claimant has. It is quite difficult to see on what basis a tribunal could reasonably reach that conclusion. If it were asked to do so by relying on evidence that people doing completely different work had such a term, such a claim would not succeed. In effect, we would be asking the tribunal to decide that the fact that there is a difference in pay between two people of the opposite sex doing completely different work somehow supports the argument that two such people doing the same work would also be paid differently. That is a significant thing to ask a tribunal to do, and considerable uncertainty would emerge.

I may be asked what the difference is between that and a case of indirect sex discrimination. In an indirect discrimination case advanced on that basis, an employer would say that the difference in pay reflects a difference in work. That would, in our view, be sufficient to establish that there was a materially different set of circumstances under clause 22, which is the clause I spoke of earlier when we dealt with contract workers, and hence, the claim would fail.

A similar point can be made in respect of other examples commonly given. For example, a woman being paid only 50 per cent. of the salary given to a man, when she works at 75 per cent. of the value, should be able to claim. Other examples commonly given arise from situations where work has been privatised. They are difficult examples to agree with, because they call for a comparison between the terms of people who are employed by different employers. That is not how the Bill works, and cannot be right. Direct discrimination in pay can, and should, in our view be properly examined through the equality clause provisions in the Bill.

An alternative approach would have been to scrap the contractual approach, but Members will know that we have retained the contractual approach and the distinction between contractual and non-contractual pay matters for work-related gender discrimination. While we could have done the opposite—scrap the contractual approach—or allow discrimination claims in parallel with it, in our view, all the difficult issues that arise in equal pay cases would arise with the discrimination approach too, only that they would be in a different order.

Mr. Benton, I wonder if it is possible for me to leave the room for a brief duration. I apologise that it is at so inconvenient a time.

Vera Baird (Labour, Redcar)

I thank all members of the Committee for their indulgence and for allowing me to take a most important telephone call about the steelworks in my constituency, which I could not put off until the end of our sitting. I want to explain, not least to the public, what has been going on. I am most grateful to you, Mr. Benton, and to colleagues.

I was saying that we could have taken an alternative approach, scrapping the contractual approach and allowing discrimination claims in parallel with it. They were the two options. However, all the difficult issues that arise in equal pay matters would come from that approach, too, even though they would come in a different order. It is clear that, if we made a wholesale change, the potential would exist for issues that have already been settled by the courts to be revisited. It is also likely that, more often or not, after expensive litigation the result would be the same.

There would always be the possibility, too, of new difficulties arising such as a claim advanced on the basis of a statistical analysis of the pay given to groups of workers doing different work, differently valued, perhaps showing that paying one group more disadvantages women who make up a smaller proportion of that group. Perhaps I should repeat that. A claim advanced on the basis of a statistical analysis of the pay given to groups of workers doing very different work—differently valued—could show that paying more to one group more disadvantages women who make up a smaller proportion of that group. One could see such a situation arising. Is that on its own to be the basis for a claim?

Surely the right response to that is not artificially to increase the pay of one group, but to seek to ensure by other means that women are as well represented in the higher paid group as in the lower. There might be risks of such cases arising. It would not be right to take the substantial risk that a large number of new cases, which would ultimately fail, would arise in such a way.

Doubtless we will have this argument again in various guises throughout consideration of the Bill, but that is a key point to raise at this stage. Changing to a different model could lead to uncertainty with more litigation and unpredictable outcomes for employers and employees alike. We are not convinced that any real advantages for women would be achieved by that change to offset the disadvantages. Right now there is a need for stability.

What the hon. Members for Hornsey and Wood Green and for Oxford, West and Abingdon propose goes beyond the protection offered by indirect discrimination, and I suggest it goes a very long way. What the issues expose is in part related to the question of where the boundary lies between individual disadvantage, which can be corrected by the Bill, and the disadvantages that arise in society, which should be dealt with by policies aimed at closing the pay gap rather than individual remedy.

John Mason (Scottish National Party, Glasgow East)

I appreciate the point that the Solicitor-General makes, but if the Bill is not the place to address such issues, where is? There are some much wider issues out there disadvantaging women in particular, but also other groups. My own experience in a local authority showed that comparisons could be made within the authority, because everyone was employed by the same employer, but outside there are separate organisations that employ only specific groups of workers, and they are disadvantaged because they cannot be compared with anyone else. Is the Bill not the place to deal with that?

Vera Baird (Labour, Redcar)

No. The issue is about equal pay between workers in the same employ. It is not about trying to ensure that employer A pays the same rate as employer B, which is something for trade union negotiations or policies connected more broadly with trying to redress the disadvantage of women who are likely to be paid less but who are not in a group that can be protected under the provision.

Diane Abbott (Labour, Hackney North and Stoke Newington)

My hon. and learned Friend says that the issue is about ensuring that groups of employees doing comparative work for the same employer are paid the same, but she forgets the electorate. For them, the Bill is designed to address inequality of pay across the board between men and women, and they look to the Bill as a mechanism to achieve that. Over a long period, many groups have raised issue in the amendment that colleagues have tabled to achieve it. For the public, this is about not particular employers, but the salaries that women, on average, can expect to obtain for comparable work done by men, on average.

Vera Baird (Labour, Redcar)

But this is not the clause in which the public will look for that. If they did, they would be misguided. There are many other matters in the Bill that we will debate presently, which are about trying to get equal pay through transparency. There are requirements on the private and public sectors.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Will the Solicitor-General give way?

Vera Baird (Labour, Redcar)

I will finish my point first and sketch out the issues so that the hon. Lady can join in our debate about them.

The proposal, which is accepted by the CBI and the TUC, is that the commission will set up a group of the representatives of employers and employees that will work out the right things to measure—metrics, as they are now called—to achieve disclosure of pay gaps firm by firm, industry by industry. That is a better way to drive forward the broader agenda for equal pay than this particular provision, which is essentially about protecting an individual against an overpaid individual doing comparably equal work. When we come to those provisions, my hon. Friend the Member for Hackney, North and Stoke Newington will see, if I have not explained them clearly enough, that they are designed to get rid of the pay gap that exists in the public sector but more powerfully in the private sector.

In what we hope is a short period, we shall use the transparency demands to make businesses see that if they disclose unequal pay, they are not likely to achieve investment. Smart women will go where there is not unequal pay and consumers who buy ethically will not buy their goods. There are other provisions that directly seek to attack the whole question of systemic unequal pay.

We shall come to a debate about representative actions, too, albeit they are not in the Bill. However, they are under consideration. That, again, can have broader reach into the whole area of systemic inequality in employment not only for gender—gender in particular, as that is what we are talking about—but for other protected characteristics.

Additionally, in due course we intend to put out a document, side by side with the Bill, looking at all the other sources of unequal pay and inequality between men and women. The Women and Work Commission has been reconvened to look at its earlier recommendations—whether it sticks with those recommendations, whether it has further recommendations, whether the Government have done enough to meet the original demands—and, with our document, we ought to be able to draw things together for ourselves. There will be consultation, so that everyone can put in any strategy to get rid of unequal pay. Aspects such as poor training and the low quality of available part-time work cannot be reached by legislation. The broader issues of equal pay come under some of those headings, rather than being dealt with effectively here. There is plenty yet to come, and everything does not hinge on the clause. My hon. Friend is right, but this is not where public expectation should lie.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I appreciate the amount of work that the Government are doing to deal with such problems—we are all moving in the same direction. However, this particular case has been something of an issue for women going to tribunal when in women-only professions. In a sense, the ability to use a hypothetical comparator will give them insurance against whatever may happen with the Equality and Human Rights Commission matrix and all the other things. A number of organisations have supported the idea. For example, the Equality and Diversity Forum says that the directive does not permit the exclusion of provisions outlawing direct and indirect discrimination in relation to terms and conditions and, therefore, requires that hypothetical comparisons must be possible in that regard, in the same way as they would be in relation to race. That would bring the situation into line with European law.

Also, Unison says that the EU equal treatment directive allows hypothetical comparisons. The Bill, therefore, should allow the use of hypothetical comparators when no actual comparator exists. Interestingly, Unison says that such comparators ought to be permissible, while the EDF says that they ought to be a requirement. I would like to probe the Minister further on why she thinks that those organisations are still clamouring for a hypothetical comparator to be admitted—to be a requirement or to be permissible. All the work that she said is going on does not suffice to satisfy Unison or the EDF. I wish to test her further on that issue.

Vera Baird (Labour, Redcar)

Organisations, as quoted, do press for that. They are also engaged with us—on the one hand they take up a campaigning position, clinging to hypothetical comparators as the magic elixir, but on the other hand they engage with us on all the other things that we are doing and appreciate that there is a lot of progress as well. There is nothing contradictory in that position, but the hon. Lady needs the context for her assertion that all those people consistently press for that.

There is some case law under article 141 of the treaty of Rome, in which the European Court of Justice has looked at the issue. It has consistently required an actual comparator to be identified for the purposes of an equal pay claim under the article. There is nothing in any pending directive that is likely to change that position. We find that to be a difficulty in accepting what the hon. Lady said.

There is, though, a recipe for confusion—I hope that I have expressed myself using the appropriate technical language, but all sorts of things can happen, which the hon. Lady is probably familiar with. Take for example a person in job A—a gardener—who wants to assert that he should have equal pay to the caretaker, and they are both men. If a hypothetical comparator were available, one could assume that one person was a woman and compare the pay of the man with the theoretical woman to see whether they should have equal pay. That has nothing to do with discrimination and pay; it concerns an argument that is better taken on by a trade union. The hypothetical comparator has real, practical drawbacks, as well as the ones that I have set out, and as well as the partial bar from Europe on taking it on.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

My hon. Friend read out a note from the Equality and Diversity Forum, which is a serious organisation. I should like some clarification on that point, because the forum was referring to the directive of the European Parliament and the Council of 5 July 2006 on

“the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast)”.

It says that the directive has been fully in effect from 15 August 2008 and that it requires that hypothetical comparisons must be possible in that regard—as mentioned by my hon. Friend—in the same way that they would be in relation to a race case. That is an assertion of fact with which I presume the Minister disagrees. If she could put on the record that she thinks that that is wrong, that would be helpful for later discussions.

Vera Baird (Labour, Redcar)

I would have thought that that was an assertion of law; it is one with which I disagree and so do the Government. I acknowledge entirely that EDF is a fine organisation. It is an organisation of organisations and we are happy and grateful to it for helping us all the way through the Bill. The tentacles that it has into equality and diversity are massively important to ensure that we are always in touch with people on the front line.

In summary, however, we do not believe that hypothetical comparators are either workable or required. We fear that allowing their use would create significant unintended consequences, some of which I have set out technically, and others I have exemplified. We have therefore decided, on balance, that ensuring pay equality is better served by maintaining our current approach. Clause 66 contains a provision to allow claims where there is evidence of direct discrimination in relation to contractual pay. I hope that the Committee will welcome that—it closes a gap in the current law. This law is better than it has been before, even in this specific way.

We will reflect carefully on what has been said, but we are not able to offer satisfaction today. I invite the hon. Lady not to press her amendment to a Division. However, it is good that we have had the discussion—we are, as she put it, all driving in the same direction. We are satisfied that we have a better state of affairs for the drive towards equal pay than that which she offers, but none the less, we appreciate that it is a tenable view that she is right.

Joe Benton (Labour, Bootle)

Just before the hon. Member for Hornsey and Wood Green indicates her intention, I want to ensure that she is aware that we are discussing clause stand part. If the Committee agrees to that, it negates her amendments. I want to clarify that so that the Committee is aware of the procedure. If it is her intention to pursue the amendments and the new clause, the stand part element has to be opposed.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Thank you, Mr. Benton. All help towards my understanding procedures is gratefully received. I intend to divide the Committee on clause stand part.

Clause 64

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss new clause 25—Defence of material factor (No. 2)—

‘(1) The sex equality clause in A’s terms has no effect in relation to a difference between A’s terms and B’s terms if the responsible person shows that the difference is because of a material factor—

(a) which does not constitute discrimination because of sex within the meaning of section 13, and

(b) which is within subsection (2).

(2) A factor is within this subsection if—

(a) as a result of the factor, A and persons of the same sex as A are or would be put at a particular disadvantage when compared with persons of the opposite sex, but

(b) the responsible person shows that relying on the factor is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary.

(3) A sex equality rule has no effect in relation to a difference between A and B in the effect of a relevant matter if the trustees or managers of the scheme in question show that the difference is because of a material factor which—

(a) does not constitute discrimination because of sex within the meaning of section 13 and

(b) which is within subsection (2).

(4) “Relevant matter” has the meaning given in section 62.

(5) For the purposes of this section, a factor is not material unless it is a material difference between A’s case and B’s.’.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

As currently worded, the clause allows employers defending equal pay claims to avoid the need to justify discriminatory pay objectively. Subsection (l)(a) allows employers to defend a claim by simply pointing to another reason for the pay differential that is not sex—not a protected characteristic, that is, sex. An employer only needs to refer to paragraph (a) because there is an “or” at the moment, rather than an “and”. If the employer cannot find or identify another reason, it is only then that the obligation kicks in to justify the differential in pay objectively.

That is inconsistent with European law and the decisions of the European Court of Justice in equal pay cases appealed from the UK. In practice, it means that where there is a female-dominated group, such as cleaners or home care workers, in local government, where it has been established that they should be paid the same rates of pay and bonuses as a comparable male-dominated group, such as road sweepers and refuse collectors, all the employer has to do to get out of equalling the pay is to identify a reason for the difference which is not sex. That reason could be something like the need to improve productivity or a need to recruit and retain staff in an environment where one particular gender was difficult to recruit. Once the reason has been identified, there will be no imperative for the employer to justify that reason objectively, and no obligation for them to show that there is a genuine need to improve productivity, that recruitment of a particular gender is difficult, or that the need is a proportionate or necessary reason to perpetuate the discrimination in pay. All the employer needs to do is to cite the other reason without any examination of the strength or veracity of that reason—carte-blanche really, so long as it is not covered by subsection 1(a).

The important point is that the female and male worker groups do jobs of equal value, and that equal value, by that stage, should have been evaluated as being equivalent under a recognised job evaluation scheme. It is only after that equality has been proved that the employer is able to raise the defence of material factor. It is important that the defence is fair and complies with European law.

The clause replicates the worst aspects of the judgment made in law under the Equal Pay Act 1970, a decision that has been roundly criticised and is currently under appeal in two cases at the Employment Appeal Tribunal and Court of Appeal. This is therefore a golden opportunity to bring United Kingdom equal pay law back into line with European law.

We have left out from our new clause subsection (3) on pay protection. I understand that the Government’s intention is not to scare the horses. For example, when pay has to be equalled up, if the disparity is huge and public sector organisations are faced with levelling pay, clause 64(3) allows for the long-term objective of reducing inequality. The Liberal Democrats want to test the Minister on that because it seems very much like letting them off the hook. Subsection (3) attempts to deal with the pay protection for groups of workers whose pay is reduced as a result of removing discrimination in pay.

For the majority of negotiated equal pay outcomes that seek to bring the pay of underpaid groups up to the level of the rates enjoyed by the comparable higher-paid work groups that does not simply involve raising the pay of the lower paid to that of the higher paid. It is important to note that many women and men have their pay reduced as a result of job evaluation in local government, and it is not always simple to state that it is necessarily men who are highly paid and that only women are underpaid. That said, there are often situations when large male-dominated groups are the subject of dramatic pay reductions and receive pay protection. As a result, what generally happens is that the higher-paid groups have their pay reduced and underpaid groups have their pay increased. In pay protection, the pay of groups rated as equal in a job evaluation is set somewhere in the middle of those two positions.

To have a system that requires employers to bring the pay of underpaid workers up to the level previously enjoyed by the higher-paid groups would be financially very difficult. I understand completely why, three years in, the majority of employers would find it hard if such a process had to be carried out immediately. I assume, therefore, that subsection (3) is about transitional arrangements, but the use of the phrase “long-term” would give far too much power and timing to the employer and less consideration to the employees.

Pay protection will be acceptable only if it is for a limited period, and the clause as drafted makes pay protection that perpetuates discrimination in pay unlawful. That is because such protection cannot be seen to have the purpose of reducing the gender pay gap and would therefore not be justifiable. It would make it difficult for all parties who genuinely desire a negotiated resolution of pay discrimination, and will create uncertainty. I should welcome the Minister exploring that long-term measure so that I can understand better if something in the clause will protect against an open-ended, kick-into-the-long-grass outcome. I await her response.

Vera Baird (Labour, Redcar)

I am struggling to identify the case to which the hon. Lady referred. Can she give me more information so that I can take it on board?

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I am trying to find the reference. I was assured that I had it, but I do not now seem to have it to hand.

Vera Baird (Labour, Redcar)

Okay, I will press on without the reference, although I might not be able to deal with the point made without the case being identified. New clause 25 would replace clause 64, which restates and clarifies the existing position of the definition of a general material factor. They are not a massively different remit. First let me concentrate on three aspects of the hon. Lady’s amendments, and then deal directly with the pay protection points. It may be that she can find the case in the meantime. If not, we will have to correspond about the precise terms.

New clause 25(2)(a) deals with the hypothetical comparator point again, as it says that

“A and persons of the same sex as A are or would be put at a particular disadvantage when compared with persons of the opposite sex”.

That would stop us taking on the new clause in the first place, as it is about the hypothetical comparator.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I am not sure that it is quite of that nature. The first part of the wording is taken directly from clause 64(1).

Vera Baird (Labour, Redcar)

This is subsection (2)(a).

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I apologise. I was looking at the wrong subsection.

Vera Baird (Labour, Redcar)

I thought I had said (2)(a), but I may not have said the right section. What the hon. Lady has drafted, as a result, in subsection (2)(a)—

“A factor is within this subsection if—

(a) as a result of the factor, A and persons of the same sex as A are or would be put at a particular disadvantage when compared with persons of the opposite sex”—

is a direct reference back to the hypothetical comparator point.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

If the Minister returns to subsection (1) of both clause 64 and new clause 25, she will see that the only difference is the word “and” instead of “or”.

“A factor is within this subsection if”

is the argument about “and” and “or” rather than the hypothetical comparator. If one leaves in the “or”, the issue is in subsection (2), which is

“objectively justified by a legitimate aim”.

The aim here is not to address simply a hypothetical comparator, but the ability of an employer to point at any reason for a differential in pay other than sex as the protected characteristic covered by paragraph (a).

Vera Baird (Labour, Redcar)

The summary of the way the defence operates was not entirely accurately put by the hon. Lady—where a factor directly discriminates against women, the defence fails; where it indirectly discriminates, it must be objectively justified. A factor that is not gender discriminatory must be material and significant, but where there is no discrimination, there is no need for a justification. That is fairly straightforward.

Clause 64 reflects the position under European law, and if I have misunderstood subsection(2)(a), I will just pass over it. The next point is that the objective justification test for indirect discrimination would, in the new clause, replace the concept of proportionate means of achieving a legitimate aim with the preferred usage “appropriate” and “necessary”. That is a block that we have already run round a couple of times. We worry that the term “necessary” can be, and has been given a overly narrow interpretation domestically. For that reason, and among others that I cited earlier, we do not want to make that change.

Lastly, the new clause is directive because the word “and” between subsections (1)(a) and (1)(b) requires a responsible person to show that the factor that he seeks to rely on is neither directly nor indirectly discriminatory as set out in subsection (2). On the other hand, clause 64(1)—this is the point that I have just made—provides that a responsible person must show that the factor is not the difference of sex or indirectly discriminatory within the meaning of subsection (2). We do not think that there should be a burden on the responsible person to disprove any indirectly discriminatory effect of a material factor, unless the claimant puts forward some evidence suggesting that there is such an effect. The “and”, as opposed to the “or”, would be unnecessarily onerous on the responsible person, unless there was evidence to suggest that there was a discriminatory effect.

Obviously there is a need for a material factor defence, and I do not think that the hon. Lady is saying anything different from that. The explanatory notes give one example, which is about a bonus payment. It would largely benefit male employees in this example, and can be justified because it is a proportionate means of achieving the legitimate aim of encouraging employees to work unsociable hours. There are almost fine shades of distinction between the hon. Lady’s clause and our clause, when we are driving at the same purpose, but the two aspects that I have referred to make her clause unacceptable.

I should draw to the Committee’s attention points about clause 64. It removes the word “genuine”, which many of us are used to when describing the material factor defence, but it does not change the substance of the current law. I want to make that clear. Employers will still have to show that the factor is not a sham or pretence—subsection (1) makes it clear that the difference must be because of the material factors. It will have to be real. Secondly, subsection (2) incorporates the effect of European Community law in respect of objective justification of indirectly discriminatory factors.

Finally, subsection (3) contains a new provision, stating that the long-term objective of reducing pay inequality is always to be considered a legitimate aim for the purposes of subsection (2)—the hon. Lady characterised that as the long grass provision. It is intended to acknowledge that strategies to reduce long-term pay inequality may need a reasonable time to work before equality is achieved. It is not intended to be a “get out of jail free” card for discriminatory employers. Any action taken to achieve that aim has got to be proportionate, but we intend to encourage those on both sides of pay negotiations to move forward.

The hon. Lady talked about pay protection. As she rightly said, where there is unequal pay, the availability of consensual arrangements—negotiations—is important in coming to a situation in which the move, albeit direct, deliberate and steady, towards equal pay is done at a rate that is realistic for the employer in question. To drive that agenda, we put the provision in, making it clear that there is, as it were, a statement about that being a practical and acceptable way forward. The provision is certainly not intended to let employers off the hook.

In the example referred to by the hon. Lady, unless the pay protection had the effect of gradually bringing the parties closer within a foreseeable time, all that would be done is to re-entrench the previous discriminatory unequal pay. Theoretically, a further action could be brought. Unequal pay will always have to be drawing nearer to equality; the provision just acknowledges that there is sometimes a need for delicacy, but we intend that process to happen as quickly as it can.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I have listened carefully to the Minister and we are not miles apart, to be honest, except on that interpretation of the first differential between “or” and “and”. I shall go back and have a look at it in light of what the Minister has said. I shall be looking at what might be termed transitional arrangements but, for the moment, I am happy—the Minister has tried to answer my questions. On that basis I shall not press for a Division.

Clause 65

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Forgive me, Mr. Benton, but are we not on amendment 258?

Joe Benton (Labour, Bootle)

The Question is that clause 65 stand part of the Bill.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

On a point of order, Mr. Benton. May I apologise? The reason for the confusion is that we tabled an amendment to leave out the clause, but that is not printed on the list. My hon. Friend’s intention is to speak briefly to clause stand part, because there is an argument to leave it out, if that would be acceptable—despite the double attempt to move that proposal.

Joe Benton (Labour, Bootle)

One grows used to such things. To clarify, amendment 258 was not selected and therefore cannot be moved. However, I will allow a discussion on clause 65 stand part.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Thank you, Mr. Benton, you are very kind. I thank the Committee for its patience.

The threshold for bringing an equal pay case is higher than for direct discrimination—it is more difficult to bring a case. That is because a person must find a real comparator against which they can show that they are being discriminated against, which is not always possible, and a person who discriminates can use the material factor defence where one exists. Neither of those hurdles applies in direct discrimination cases.

Being paid differently because of gender is clearly a detriment. Rather than impose a higher threshold to be able to take a case to end pay discrimination, the Bill should make it easier to take action. The scale of pay discrimination against women should make us favour concrete measures that make ending such discrimination easier. Removing the clause would enhance protection for people who face pay discrimination because of their gender. Where they cannot find a real comparator, or the discriminator finds a spurious material factor defence, the door would still be open to take a direct discrimination case. On that basis, I wanted to argue against the clause.

Vera Baird (Labour, Redcar)

I do not know whether the hon. Lady seeks to remove the clause on the basis that it would change the existing law. The short answer is that it would not. That is our firm conviction, and I am happy to explain why. I do not wish to put her in a hot spot, but if she thought that the clause would change existing law, I can explain why it would not outside the Committee if that is quicker.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

It is not our suggestion that the clause would change the existing law. We contend that the existing law has not worked. The fact that one has to go through this route to make the claim is one of the many reasons why it has not worked, and we know that the Government share our concern.

Vera Baird (Labour, Redcar)

Then I will set out how we think the provisions work. The sex discrimination provisions of the Bill do not apply where the equality clause or rule provisions operate. It is right to ensure that a remedy for a particular wrong is a single specified remedy rather than a matter of choice from a menu, and that is what the clause achieves. We have already discussed our general approach to equal pay in the Bill. Essentially, equal pay is contract-based, achieved by modifying or reading in a term of an employee’s contract of employment to ensure equality with a colleague of the opposite sex doing equal work. We have maintained that position in the equality clause provisions of the Bill.

In “A Framework for Fairness”, we consulted on whether to maintain that contractual approach, and a significant majority of respondents favoured it, although I recognise that some take a contrary view. We have tried to adjust the relationship between equal pay and the discrimination provisions to ensure that there is no gap by allowing claims of direct discrimination in respect of contractual pay. I think that I said that in a previous debate as well. As we have already discussed, we believe that doing away with the separate contractual approach could lead to considerable uncertainty and confusion.

The sex discrimination provisions listed in the table apply only to non-contractual pay and benefits such as promotion, transfer and training and to offers of employment or appointment to office, except as provided by clause 66 in respect of direct discrimination. For example, if a company offers more training or promotion opportunities to men because it believes they will stay longer than women, a claim of sex discrimination by the women would come under the sex discrimination provisions. If it is not clear—this might be what is concerning the hon. Lady—whether a particular claim relates to benefits that are contractual or non-contractual, it can be made, as is currently the case, under both provisions, and the tribunal will, to put it in technical language, sort it out.

The clause also maintains the distinction between the provisions for equality in terms of occupational pension schemes and the provisions that prohibit sex discrimination in giving access to such a scheme. It is worth pointing out that where a woman cannot identify a comparator doing equal work and wants to make a claim involving contract terms not relating to pay, such as promotion, the sex discrimination provisions will apply to such a claim. Again, the position is the same as before. I understand the change that the hon. Lady seeks, but the Government see the clause as an essential aspect of the functioning of the Bill. I hope that the Committee will therefore agree that it should stand part of the Bill.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

It is extremely helpful to have such a cogent explanation of what the clause does and does not do, and what the law would probably say and not say in interpreting it in future, so I thank the Minister.

Clause 72

John Penrose (Conservative, Weston-Super-Mare)

The clause is important and I wish merely to put on the record my party’s support for it. As the explanatory note says, it is designed

“to protect people who discuss their pay with colleagues”

and to ensure that if any firm seeks to impose a pay secrecy clause, which might be a mechanism for covering up gender pay inequality, it does not work and cannot be applied. I state on the record my party’s thorough support for the clause. It will be particularly important when we come to discuss the wider issue of gender pay audits in clause 73. It is, in our view, a thoroughly sensible and proportionate way of attacking part of the problems of the gender pay gap. It is entirely reasonable and proportionate to the problem in hand. I just wanted to ensure that it was on the record that my party is thoroughly in favour of the clause and will support it.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I, too, welcome the clause. By introducing it, the Government will have rolled back some of the disparities and the secrecy that there has been around pay since time immemorial. That is one of the great inhibitors to individuals being able to know whether they have something to be aggrieved about. The clause is a start but, when we come to the next clause, we shall expand on the issue far more widely.

Vera Baird (Labour, Redcar)

I am grateful that both Opposition parties have said that they support the clause. The Government think that it is necessary and a good move forward, as they do. For the sake of clarity, I emphasise that the clause does not require anyone to disclose their pay if they do not want to. It does not stop employers preventing employees from discussing their pay with or disclosing it to competitors or other people who are not colleagues of the employee, so it should not have any unintended consequences. We think, as colleagues do, that the clause is a useful tool to promote pay transparency and hence equality.

Clause 73

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I beg to move amendment 248, in clause 73, page 55, line 19, leave out ‘250’ and insert ‘100’.

Joe Benton (Labour, Bootle)

With this it will be convenient to discuss new clause 23—Gender pay gap information (No.2)—

‘(1) Subject to the provisions of this section, no less than every three years a designated employer shall publish information relating to the pay of its employees for the purpose of showing whether there are differences in the pay of male and female employees.

(2) The information relating to pay which a designated employer shall publish includes—

(a) the average hourly pay of male workers and the average hourly pay of female workers within its employment;

(b) in respect of each role within the organisation—

(i) the average pay awarded to workers engaged in the role;

(ii) the percentage of men and women engaged in that role;

(iii) the gap, if any, between the average hourly pay of male and female employees in that role; and

(iv) the average length of service of men and women engaged in that role;

(c) information identifying—

(i) any descriptions of activities carried out in the course of employment with the employer by any group of workers who are wholly or mainly women;

(ii) any descriptions of activities carried out in the course of employment with the employer by any group of workers who are wholly or mainly women;

(iii) the relative values of the descriptions of activities falling within sub-paragraphs (i) and (ii); and

(iv) in relating to descriptions of activities within sub-paragraphs (i) and (ii) which are judged to be of equal value to each other, the average hourly pay of male workers and average hourly pay of female workers carrying on those activities.

(3) For the purposes of this section, “pay” means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or kind, which the worker receives directly or indirectly, in respect of his employment, from his employer and includes the cost to the employer of—

(a) any pensions contributions paid by the employer in respect of the worker,

(b) any bonus or other performance related or incentive payment, and

(c) any discretionary benefit granted to a worker in connection with his or her employment.

(4) The Secretary of State shall prescribe by regulations any further information which employers must publish pursuant to subsection (1), the form in which the information must be published, and the degree of publicity to be made.

(5) In make such regulations the Secretary of State shall adopt best practice for promoting awareness of the nature and causes of any pay gap between persons of different genders as set out by the International Labour Organisation from time to time.

(6) The Secretary of State shall consult with the Equality and Human Rights Commission as to how to ensure that the regulations shall contain best practice prior to the making of the first regulations and no less than every five years thereafter and shall amend the regulations as necessary to ensure that best practice is maintained.

(7) Where an employer fails to publish information in accordance with this section then an employer shall not be entitled to submit a material factor defence in accordance with section 64 in relation to any period for which they are in breach of their obligations under this section.

(8) Where the information published by an employer reveals that there is a difference in the average pay of men and women doing relevant types of work as set out in section 59, then in any proceedings to enforce a sex equality rule or a sex equality clause it shall be presumed that there is such a breach unless the employer can show a material factor defence.

(9) The regulations may make provision for a failure to comply with the regulations—

(a) to be an offence punishable on summary conviction by a fine not exceeding level 5 on the standard scale;

(b) to be enforced, otherwise than as an offence, by such means as is prescribed.

(10) The reference to a failure to comply with the regulations includes a reference to a failure by a person acting on behalf of an employer.

(11) An employer shall publish information pursuant to subsection (1) within one year of the coming into force of this Act.

(12) Where an employer (A) is able to determine the terms and conditions of employment as between another employer (B) and its employees, A shall publish the information that B would otherwise be required to publish in a way which is consolidated with the information for all other employees of A whose terms and conditions A may determine, and where A publishes consolidated information B shall not be in breach of this section if it does not publish any information.

(13) A designated employer means an employer who has more than 100 employees.’.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

The amendment is designed to probe the Government on the decision that they have made on the number of employees that an organisation must employ to be subject to the gender pay gap clause requirements when they arise. The Government refer to 250 employees in the private sector. I do not fully understand why that number has been selected. In our evidence session, reference was made to a reduced number. Women Like Us said that organisations with 100-plus employees often have dedicated human resource departments or facilities, so issues would not be too onerous as such departments should be able to contribute their experience of auditing. It was also said that the reference to 250 employees leaves out of the gender pay audit requirement a huge proportion of businesses in the United Kingdom. About half the people in the United Kingdom are employed in businesses with fewer than 250 members of staff, so huge sectors of the population would not be provided with protection under the Bill, when the regulations come into force. Given that 80 per cent. of the population are not employed in the public sector, will the Minister explain why the figure of 250 employees has been chosen?

I am saving some remarks to the end of the debate, but I now move to new clause 23. It would extend the period for publishing information to three years. That is a reasonable timetable. It would not be too onerous, nor would it be so irregular as to be out of date. Subsection (2) of the new clause deals with the information that must be published and would distinguish the differentials between male and female pay in an organisation. The information published under paragraph (c) would highlight discrimination in the types of work undertaken wholly or mainly by women so that we can see what is being done and by whom, how that work is valued, whether it is of equal value and whether the pay demonstrates an unjustified differential or a legitimate aim subject to the defence of a material factor.

In our evidence session, we heard from the Fawcett Society that, if we are to eradicate discrimination and unequal pay, we have to evaluate the skills and experience that are required for jobs and check whether individuals in equivalent jobs are being paid equivalent salaries. That is why new clause 23 proposes publishing both the levels and types of work. Women’s work is often undervalued and major cases have involved equal value in the public sector. That undervalue has delivered low pay for women for decades. It has not been adequate simply to have provisions that make that illegal, which is why pay audits are necessary they make sure that checks are in place so that people are not discriminated against.

It is only by seeing how people are treated compared with others at levels and types of work that we will ever be able to bring a case to a tribunal to right those wrongs. If we cannot find that out, the gagging clauses that we referred to earlier, while they are extremely welcome and helpful—for which I say, “Well done” to the Government—will not give the overall picture to enable an individual to make a judgment about a company’s relative pay or jobs.

The Conservative amendment of only imposing mandatory pay audits when there is a finding against a company will not work. It seems to be logical to punish when there is something judged to be punishable, but the reality is that such a policy will not address unequal pay because the individuals cannot get the evidence to bring the matter to a tribunal to get the judgment. As I understand it, the company would be required to publish mandatory pay audits thereafter. That will not address the issue in the first place. It will not provide the evidence.

John Penrose (Conservative, Weston-Super-Mare)

I point it out to the hon. Lady that we have not tabled, or had selected, an amendment that goes through Conservative policy. She is right to say what Conservative policy is, although obviously we would disagree about her analysis of its shortcomings, but we cannot necessarily enter into a debate on what she is saying without an awful lot of latitude from the Chair, because no such amendment is selected for debate.

Joe Benton (Labour, Bootle)

Order. My mind was going along that avenue. We have been straying a little from amendment 248 and new clause 23. Perhaps we can confine ourselves to them. I shall allow the widest debate I can, but we are dealing with those amendments.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

On a point of order, Mr. Benton. I think that my hon. Friend is setting out a different approach to pay audits and contrasting it, quite reasonably, with the Government’s approach. I must say I wondered to what extent she might refer to alternative approaches, in proposing her new regime, which is supported by the Liberal Democrats.

Joe Benton (Labour, Bootle)

I have indicated that I am prepared to allow the broadest possible debate, but I want to sound a cautionary note about constant references to a Conservative amendment that is not going to figure anywhere.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Thank you, Mr. Benton. I merely wanted to say that any such idea would not provide the same rigour as mandatory pay audits, which can be viewed by an individual to reveal whether there is discrimination against them in pay level, work type or conditions, or more widely.

Subsection (3) of the new clause deals with packages in connection with pay. Those are often left out of such debates. The subsection would introduce the idea that the entire package, not just the pay itself, should be considered. I looked at the issue with reference to Cambridge university, and it was clear from its pay audit, which was published voluntarily, I believe, that men were being offered much better packages, including such things as accommodation and moving costs, to bring them to the job, whereas women on the same pay grade, perhaps, were not being offered such packages. That is discrimination.

In one establishment, where most market supplements for higher grades were for men, one administrator was getting 125 per cent. of salary as a market supplement. That is back-door discrimination, and we want that eradicated. It operates outside pay levels and work type, but is to do with the package that goes with getting the job. I am using that only as an example of the sort of discrimination that can happen outside the pay level. Subsection (3) would require publication so that any such bias inherent in a company would be made transparent.

Subsection (7) of the new clause would provide teeth, so that action could be taken if there was failure to publish. An employer who failed to publish would lose the right to use or submit the material factor defence for the period in which there was failure to comply with the requirement.

Those are the essential points of the new clause, apart from the fact that it would define a designated employer as one with more than 100 employees, referring back to amendment 248. I shall be pleased and interested to hear what the Minister has to say.

John Penrose (Conservative, Weston-Super-Mare)

I applaud the hon. Lady’s instinct in tabling the two amendments, even though I suspect that we would disagree strongly about the means and mechanisms. It is important to put it on record that I hope and expect Committee members from all parties to share the common goal—I am sure that we do—of reducing and eliminating the gender pay gap by whatever means necessary.

However, we disagree with the hon. Lady’s proposed mechanisms. Although a degree of employer-based discrimination is clearly part of the gender pay gap, most analyses also make the valid point that a number of other important factors are at work. It is important not to pursue or base legislation on the notion that employers are the only cause. It is also necessary to ensure that any means that we take to drive through reduction of the gender pay gap are proportionate.

With your permission, Mr. Benton, I will expand on our concerns during clause stand part debate, but we contend—I think that the Government’s own analysis supports this—that the gender pay gap has many other causes, which have to do with disadvantage in society in everything from access to education and onwards. However, within companies where differentials exist between men’s and women’s pay, any direct discrimination must clearly be dealt with vigorously and strongly. That is why, during our debate on clause 72, the hon. Lady and I both emphasised our support for measures designed to ensure that it is illegal to have a contract term that stops men and women in the same company communicating about their pay. That is an important mechanism. However, there are many other reasons why pay differentials might exist in the same company. For example, women might not be well represented at senior levels. That would inevitably lead to differentials.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I believe that the hon. Gentleman made the same point to the panel during the evidence session. When the Fawcett Society was asked how much of the pay gap could be laid at the door of discrimination by businesses rather than other factors, it was extremely robust, saying that

“when people have decomposed the gender pay gap to look at the different elements that contribute to it, discrimination is the largest factor of all”.——[Official Report, Equality Public Bill Committee, 2 June 2009; c. 57, Q114.]

John Penrose (Conservative, Weston-Super-Mare)

I am glad that the hon. Lady brought that up. Although the Fawcett Society witnesses did not mention which document they were referring to, they might have been referring to a research finding from the Equal Opportunities Commission on modelling gender pay gaps, which says that the largest single underlying cause of gender pay gaps, at 38 per cent., is

“due to other factors associated with being female, including direct discrimination and differences in the labour market motivations and preferences of women as compared with men. Some of this will be attributable to indirect discrimination or systematic disadvantage”.

The Fawcett Society was right to say that the largest single element includes direct discrimination. However, it is not true to say, and I do not think that the Fawcett Society was saying, that the largest single element is direct discrimination. That 38 per cent. includes several other crucial factors, which previous Governments have addressed, and the current Government, and I hope future Governments, will continue to address via different mechanisms. Frankly, those factors should not be addressed via discrimination. It is not necessarily true to say that direct discrimination is the largest factor. In fact, in all probability it will be only a subset of 38 per cent.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

Even if we accept that it is not the largest factor, given that the hon. Gentleman said that like previous Governments, this Government and future Governments want to tackle everything else, there seems to be no good reason not to seize the opportunity set out in my hon. Friend’s new clause to tackle that component. It is only justifiable not to do so, or to seek to do so in a weaker way, if they do not think that it is a problem. To leave out employers from the package of measures is in itself disproportionate—it is out of proportion because there is a problem and no solution is being proposed, or not a strong enough one. That is where the disproportionate consideration comes—not that this measure is disproportionate.

John Penrose (Conservative, Weston-Super-Mare)

I thank the hon. Gentleman for, I think, making my point. He is right to say that we cannot ignore direct discrimination by employers and I am sure that everyone agrees with that. That is why the hon. Member for Hornsey and Wood Green and I both rose to make the point on clause 72 about making sure that there is better pay transparency by ensuring that it is illegal for employers to make it a contract term that people cannot discuss their pay with their colleagues at work.

Conservative policy—I will not try Mr. Benton’s patience, but the hon. Lady mentioned it, so I shall illustrate it—is that we believe it is sensible to have pay audits for companies that have been found to be directly discriminating. That is clearly a sensible step to take in such situations. However, our contention is that it is a disproportionate approach to companies that have not been found to be involved in direct discrimination in other cases, because of all the other factors that are also at work.

John Mason (Scottish National Party, Glasgow East)

The hon. Gentleman is setting an almost impossible barrier by saying that, in the first place, discrimination has to be proved, and then there has to be an audit or information has to be provided. Surely one of the themes of the past few weeks has been that providing information is inherently a good thing and if an employer has particular reasons for differences, they could presumably then explain them.

John Penrose (Conservative, Weston-Super-Mare)

I thank the hon. Gentleman for his intervention. I do not think that the barrier is impossible at all—it is perfectly reasonable. Again, it is important to assess the degree of proportionality: what is the size and cost of the burden that we are imposing to address the particular part of the gender pay gap that we are seeking to sort out? The costs of the hon. Lady’s proposal would be on the wrong side of that line. Our contention is that ours is a modest and reasonable way of balancing the two.

I take the hon. Gentleman’s point that there is a balance to be struck and that is what we are trying to do. That is why I was clarifying our reason for agreeing with the end that the hon. Lady is striving towards and our concerns about the proportionality of the means rather than anything else.

John Mason (Scottish National Party, Glasgow East)

The hon. Gentleman mentions costs. Surely, in this day and age, with computer systems as they are—I have worked in a number of small organisations which have quite sophisticated computer systems—there is not a great cost in providing the information.

John Penrose (Conservative, Weston-Super-Mare)

The hon. Gentleman comes on to a point that I plan to make in the clause stand part debate about the Government’s impact assessment. I shall confine my remarks for the moment to quoting a comment which is attributed—although many are—to Jack Welch, former, much celebrated chief executive of General Electric in the States. When he was being presented with a very long and involved set of financial projections by someone from General Electric’s finance department, which involved detailed calculations that were expressed to many decimal points, he looked at the chap making the presentation and said, “Son, I don’t know about the accuracy of those last two digits in that number, but I am pretty sure that the first one is wrong.” I feel that the calculation of the costs of this measure is woefully under-egged, which goes directly to my contention about proportionality.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

The hon. Gentleman argued briefly that it is legitimate to do the audit work where a case of direct discrimination has been identified. However, if one knows—one does know and we can argue about the degree to which it is a factor—that it is endemic, that is like arguing that people should be advised to eat healthily only after they have had a heart attack. That misses the point of the whole range of people whose health would benefit from that. Will he explain the rationale for such an after-the-fact approach, even if it were to work?

John Penrose (Conservative, Weston-Super-Mare)

I would use a different analogy, which is that people, and in this case companies, should be innocent until proven guilty. The hon. Gentleman is right to say that there is a degree of direct discrimination, but by describing it as endemic he is assuming that all companies are guilty of it. That is a dangerous assumption, which is not necessarily supported by any data. A large number of companies have taken enormous steps, and the data that I will quote later—again provided by the Office for National Statistics—will show that there have been real steps in reducing the gender pay gap since the equal pay legislation was first passed. We have still further to go, but it is deeply unfair and inaccurate to assume that all companies are guilty of gender pay discrimination and direct discrimination. There is no evidence for that.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

Reluctant though I am to go to the dictionary, given what the Minister said previously, medically “endemic” does not mean that everyone has a condition, but that it is widespread and ingrained. The allegation that I said every company is guilty is wrong, and the hon. Gentleman understates the issue by saying that only those found guilty have a problem. He thinks that the problem of the pay gap and direct discrimination has not been a big enough problem for enough people—women—for long enough for more action to be imposed on employers. That is the nub of the political disagreement between us. I suppose that is why we have politics and elections.

John Penrose (Conservative, Weston-Super-Mare)

I thank the hon. Gentleman for his dictionary definition, which, I hope, makes it clear that he does not think that all employers, or even a majority, are involved in direct discrimination. I hope that he thinks that it is a minority of employers, and a reducing minority. My point is that it is unfair to assume that everyone is guilty until proven innocent.

I would pick up the hon. Gentleman on his attempt to put words into my mouth about the description of Conservative policy. I believe it is important to apply the measures. [Interruption.]

Joe Benton (Labour, Bootle)

Order. There is far too much background noise.

John Penrose (Conservative, Weston-Super-Mare)

I had just finished.

Vera Baird (Labour, Redcar)

Obviously, we will have a clause stand part debate, so let me not spread my remarks too widely. In relation to the comments of the hon. Member for Weston-super-Mare about all companies being innocent until proven guilty, without a provision such as clause 73 companies would be able to hide their guilt by not disclosing the figures. Surely that is the major policy difference between us—and probably the Liberal Democrats—and the Conservatives. He says that there should be a mandatory pay audit when direct discrimination against someone is proven, but, as we all know, such cases rarely get to court. It is a tour de force to get one, as it requires a lot of courage for a person to be present.

As for the nature of the proposed pay audit after a finding of unequal pay in a tribunal, it would be mandatory for the tribunal to impose the pay audit on the business, even if the case itself had had the effect of making a business put its business right. That would be absolutely onerous on business and is a fatal flaw in the Conservative proposals.

John Penrose (Conservative, Weston-Super-Mare)

Will the Minister expand on her comments about the difficulty of getting information about pay inequality? We have just had a brief stand part debate on clause 72, which provides important clarification and transparency. I hope she will accept—I am sure that she does, because it is a Government clause—that that is an important mechanism for improving and introducing transparency in future of the kind that she has described.

Vera Baird (Labour, Redcar)

It is a useful tool, as we all agree. The provision is about one-to-one disclosure and is relatively modest. Unequal pay is systemic and we have to find a way of getting it out of the system. Much of the time the only way to do that is to make people disclose that it might be there. If it is not, there is no problem. If it is, they must disclose it so that we can get rid of it, or we simply have no way of getting through. Although that is not the only difficulty with the legislation that we have had since 1974, it is a key one.

It is fine to give someone the right to bring an action for equal pay, but if they do not know that they are suffering from unequal pay, then it is hard to exercise such a right. We have to go way beyond the previous clause, which would allow me to ask the man sitting next to me whether he is getting £10 more an hour than I am. That is obviously a first step, but there is a need for a great deal more transparency across the piece before we can start to tackle continuing pay discrimination.

I do not think that the hon. Gentleman takes on board the nature of pay discrimination. He argues that businesses are not all bad or even endemically bad, but the Government do not begin from the position that there is something inherently bad about business. However, we must appreciate that direct discrimination continues and that it is a component. I do not know whether it is a very large or very small component—I suspect that it is significant—but requiring the disclosure of pay information is about not only direct discrimination, but indirect discrimination. That fact is totally left out whenever he argues that we are driving at a tiny bit of unequal pay with our anti-discrimination measures. It is not tiny; it is a very significant part of unequal pay.

I say that to be as fair to business as I can: I am pretty satisfied that experience shows that the kind of disclosure that we will require through the mechanisms in clause 73 often takes businesses by surprise. Some businesses have not deliberately had indirectly discriminatory provisions, although some probably have. Discriminatory provisions might result from a business never having looked at them. They might also result from historic mergers, separations and reorganisations. It might be that nobody has evaluated whether component A of the business in warehouse Z is being underpaid in relation to warehouse Y in another part of the country. None the less, the employer is the same and so it needs to have equal pay. The figures are the way to get that out. That is another important element of discrimination that the hon. Gentleman never takes on board: he only ever talks about direct discrimination.

John Penrose (Conservative, Weston-Super-Mare)

I intend to address both kinds of discrimination when we get the clause stand part debate.

The Minister said that such measures take companies by surprise because they discover things they did not know. How can she square that with the calculation of the implementation costs in the Government’s impact assessment:

“We have assumed that the salary/wage data needed to calculate and publish the companies’ gender pay gaps are already collected and available at least for businesses with 250 or more employees who are companies under the Companies Act 2006. We have also assumed data identifying each employee’s gender will be held”?

The Government have assumed that all the necessary data to create a gender pay audit is already held in a readily accessible, easily identifiable form in a company, but she has just implied that companies do not know what is going on because data are not held in a convenient form and that the companies have not been able to see them. Either they are held in a convenient form or they are not. If they are not, the impact assessment will have overestimated the number of businesses that have the data.

Vera Baird (Labour, Redcar)

The hon. Gentleman is miles away from the point that I am trying to make. I said nothing whatever about such discrimination being unknown to business because the data were not available in an accessible form. Data might be available, but are they being looked at in a way that discloses pay gaps? Very often, that is not the case. If on the other hand he wants to argue that all indirect discrimination is wilfully brought about by businesses who have the data available and do not put right a problem they know about, that is up to him, but I would have thought that that was quite a long way to go. I was simply trying to be fair and to say that I am rather anxious that we should not assume, as he did a minute ago, that all businesses are deliberately getting it wrong.

The impact assessment has been properly done and carefully evaluated and it is correct. None the less, the principle remains. One can take examples from the numerous local authorities that got tied down in the whole single status argument that has been going on for years. Many of them did not know that they were discriminating against particular groups of women, as opposed to particular groups of men, because they have never had to look at the respective pay that was being given. The only way anyone is able to do that is if they know about it. If they also declare in a way that is compatible with the next local authority, they can compare like with like and see why they are in a different position. There is no clash between what I just said and the impact assessment.

We need information, and we need it to be disclosed by the public sector and by the private sector in a way that makes it directly comparable, business with business, sector by sector, so that we can see where the deficits are. The hon. Gentleman is right to say that a number of businesses already disclose information—we accept that completely and are pleased about it. On that bedrock of people who already do, we shall build, engaging them in the group that the commission will manage in order to come to the appropriate measurements, but also because they will be undoubtedly the first ones to declare under the new metrics what they have already been declaring under the old metrics. They will form the platform from which we can all look at the people who are not disclosing their metrics or who are disclosing them in some way that makes them less identifiable.

Sandra Osborne (Labour, Ayr, Carrick and Cumnock)

If there are companies who are disclosing, they are the good guys, but what about those people who currently do not disclose? What makes the Minister think that they will do so voluntarily? What is the justification for waiting for another four years before making it compulsory, given that so many companies do not bother?

Vera Baird (Labour, Redcar)

The basis on which we think that it will work is that once one has the metrics—I shall come in a minute to setting the system up, which should produce metrics that both sides of industry can agree quickly—the material will have to be made available publicly. It will have to be made available in an accessible form, and it will compare business A, business B and business C. Disclosure now tends to be made—I am not criticising—in a way that is not directly comparable. One might have bank A disclosing all the material that one needs to know, but bank B disclosing it in a different way. One would need to be enough of an insider in bank A and bank B to be able to compare. The stuff has to be the same, so that the employee or the trade union can see where the problems are. If bank A is already disclosing the stuff, and bank C is already disclosing the stuff, any sensible customer, any sensible investor and, overwhelmingly, any woman in her right mind is not going to go for a job with a business that is deliberately not disclosing the fact that it must have a pay gap. If it does not have a pay gap, it would disclose the information.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Could there not be a perverse incentive there? One of the reasons for us all wanting exposure of all the information around pay is that our suspicion is that those who do not disclose it are underpaying women. Therefore, they might be able to offer goods more cheaply. Is that not the argument that business is making—“This is a cost to business. We won’t do it and therefore, by discriminating, we’re able to keep our costs down”?

Vera Baird (Labour, Redcar)

It will not be five minutes before some bold trade union notices bank B in that non-disclosure position and has a good look at what is going on in the interstices of the pay structure. Transparency is the key, it really is. It is not something that is soft and waffly that will take ages to implement, instead of which we should be hitting business now with a big poleaxe. We are suggesting a sensible way forward, and therefore we favour clause 73 over the proposals in new clause 23 and amendment 248.

The new clause would set out in the Bill details of the gender pay gap information that employers should publish periodically. It would enable—specifically provide for—such information to be used as evidence of a breach of an equality rule or clause, where that case can be made. The clause obviously also has penalties for a failure to publish designated information. Further, it would effectively require a gender pay audit as a precursor to publication, but does not really provide any flexibility in how to go about that.

Although the Government agree with some of the rationale behind the new clause, we are not calling for pay audits in the Bill. There are a number of other significant problems with the new clause. First, it jumps the gun on our proposal, which I am pleased is now accepted by all parties. The Equality and Human Rights Commission and representatives from business and unions are already engaged in the exercise of identifying what measurements and what gender pay gap information employers with at least 250 staff—I will come to that in a minute—will be encouraged to report on, on a voluntary basis.

I am pleased that following its evidence, the CBI—the Committee will recall its representative—indicated that it would encourage the reporting once the measurements have been fixed up. It is engaged in the process now. They have all come together in this way. Later this summer, we look forward to consulting on the options that they have proposed—in fact, they will consult—before they make the recommendations, which will be before the end of the year. Therefore, it is a short-term exercise, and what we should get in the end is material that everyone agrees should come out, and that we will not end up forcing on unwilling people.

John Penrose (Conservative, Weston-Super-Mare)

To pick up on the point about the CBI’s comments in our evidence session a couple of weeks ago, I gained the impression that when the Minister asked the question of the lady from the CBI, she said that it was willing to engage with the Government if the clause went through on the ground that, I suspect, it would rather be inside the tent and participating, rather than having it done to them. I did not take the lady from the CBI—in fact, other comments made outside the evidence session support this—to be saying that the CBI supports the principle of these gender pay audits in quite the broad way that the Minister perhaps inferred.

I want to make that clear, as the Minister rightly picked up other members of the Committee on earlier clauses when they quoted external stakeholder bodies and inferred their support for a particular point of view when the stakeholder bodies might not have agreed.

Vera Baird (Labour, Redcar)

I am not sure that I follow the point. The CBI representative said clearly that if the provisions are introduced she will encourage her membership to abide by them. I was immensely cheered by that, although I am not surprised by it: there are a lot of ways in which the CBI is well ahead of the Tory party on this matter. A number of really modern employers do not adhere, in the way that the hon. Gentleman’s abysmal Back-Benchers did on Second Reading, to the anti-equality, “Let’s go so, so, so, so softly” approach because equality is the opposite of business progress. That is simply not the case.

Many businesses in the CBI are perfectly capable of understanding that business progress and equality go together—they are not the enemies of one another. We are trying to harness that understanding, which modern businesses have, in setting them up with the unions and the commission to put together absolutely agreeable metrics. I am sure that they will have to argue the toss about what the metrics are. I am sure that the two sides will exhibit their natural instincts to protect their own interests, or that of their members. None the less, they are all willing and ready to do it. Indeed, they are even waiting, as the hon. Gentleman suggested, for the measure to pass. They are already going about the business of doing it and I am very pleased.

There is no question of waiting four years, although I know exactly what my hon. Friend the Member for Ayr, Carrick and Cumnock meant about the lack of compulsion for four years. However, we are not waiting four years until we start along the road of getting that material out. The commission will report, I think annually, about progress. It will be saying what the metrics are, how many businesses in all the sectors have produced the metrics and what the metrics are starting to disclose. It will also map what progress the transparency is making towards equal pay. It is a process that starts now, and if it has not finished in four years, there will be more to say and do.

John Penrose (Conservative, Weston-Super-Mare)

To be clear, I share the Minister’s view that the CBI agrees that equality is good for business, and my party would also share that view in many respects, but I want to be absolutely clear that the CBI’s participation in the Government’s consultation does not necessarily mean that it likes the fundamental idea of clause 73. In fact, the brief that it circulated states:

“The CBI does not support clause 73 of the Bill.”

It may be trying to mitigate the damage by participating should the clause go through, but let us be clear about the principle: the CBI does not like it.

Vera Baird (Labour, Redcar)

It is puzzling to know why the CBI does not like the clause, if that is its true position. I asked the representative of the CBI in the evidence session:

“Will the CBI take responsibility once the metrics are worked out with the rest of it for driving the requirement through its membership to comply with disclosing those metrics?”

Ms Hall said:

“We would absolutely encourage our employers to use it if we come up with a system that works... I have to be equally clear that we do not support a legislative solution”.——[Official Report, Equality Public Bill Committee, 9 June 2009; c. 94, Q175.]

I asked her clearly, “Will you help encourage?” I used the word “encourage”. She said that she would drive it through her membership. What does the Tory party have against that?

John Penrose (Conservative, Weston-Super-Mare)

The Minister has just proved my point. The question that she asked was, “Will you be encouraging your members to obey or disobey the law,” and the CBI rightly said, “We will be encouraging them to obey it.” It went on to say, “And we do not agree with a legislative solution.” I think that we are saying the same thing. I just want to ensure for the record that everyone is clear about where the CBI stands.

Vera Baird (Labour, Redcar)

I think that we are saying absolutely opposite things. I am saying that the CBI, unlike the Tory party, is happy to support driving the metrics, once they are fixed—that is what the lady from the CBI said; it is very interesting and I am most grateful to have been given that quote—through its membership. That is as strong as anyone could wish it and this is not a question whether Ms Hall will encourage people not to break the law.

My hon. Friend the Member for Ayr, Carrick and Cumnock has just made it clear that it is not the law that the information has to be disclosed and it will not be for years. The CBI was saying that it will drive voluntary compliance through its membership once the metrics are fixed. Ms Hall is saying that she would prefer it to be voluntary from start to finish and there not to be set out in clause 73 the ability for a Minister to in due course require compliance. That is what she is saying about the legislation. She is not saying that she does not agree with all this, although it seems as though the CBI is well ahead of the Tory party in that position, which is a shame, bearing in mind the protestations that have been made latterly about how much the Tory party is on board with equal pay—not for very long, it seems.

Anyway, let me move on and say that the consultation process that we shall go through is a major reason for the Government’s decision to make the clause as flexible as possible as to what information may be required from 2013, as we need to see how the voluntary arrangements work in practice and whether refinements for any 2013 legislative regime may be required.

New clause 23, tabled by the hon. Member for Hornsey and Wood Green, would bypass the voluntary regime by requiring designated employers to comply with the information publication requirements within 12 months. We prefer our commitment to working with willing stakeholders to come up with a system that is as workable as possible for them. It would be wrong to prejudge our discussions, as the new clause would do. It talks of consultation with the Equality and Human Rights Commission, but that is on supplementary regulations, not the main reporting principles in the Bill.

Make no mistake: I share the frustration at the lack of progress in closing the pay gap, but bypassing what looks like a process to which all parties are committed and having mandatory arrangements in force by 2011 would run the risk of riding roughshod over the legitimate voice of both sides of the business community. Progress can better be made by bringing employers with us—by including, encouraging and cajoling, rather than compelling. We now have the commitment to drive through, which I am very pleased about.

If that does not work, clause 73 is there. That is what the CBI does not want and it is all the CBI does not want. I do not know why the Tories are trying to pretend that somehow the CBI is opposed to equal pay, because it is not, on the evidence that we saw. Anyway, that is where the Tories are and that is where we are on this issue. Happily, the CBI is standing right behind me on this occasion—and we are not even in a queue. If it does not work—

John Penrose (Conservative, Weston-Super-Mare)

Will the Minister give way?

Vera Baird (Labour, Redcar)

I shall finish my sentence, then I will. In 2013, if this has not worked, make no mistake: we will use clause 73.

John Penrose (Conservative, Weston-Super-Mare)

I want to clarify the point by asking the Minister to point to any part of my remarks in which I said that the CBI is opposed to equal pay.

Vera Baird (Labour, Redcar)

The hon. Gentleman said that the CBI is against the legislative provision on this. He suggested that it was saying that it would drive this through its membership only in order not to advise its members to break the law. He knows that that is risible, because the provision does not say that employers must disclose the information. It says that if they do not, in due course they will be made to. However, at the moment it is not about driving the membership to avoid breaking the law. It is about willingness to help with trying to reach an amicable solution. We have a fundamental distinction of principle between the Government stance and the Tory stance, as disclosed in recent interventions. It was fairly clear on Second Reading where the old Tory party was coming from.

I am not sure whether it is intentional that the Liberal Democrat new clause would also apply to the public sector. Technically, it would, and in a similarly unhelpful way it would cut across the specific public sector equality duty consultation that we have just launched. One of the duties that we propose is a duty on public authorities with 150 or more employees to publish the gender pay gap in their organisation.

Another flaw in new clause 23—at this point, I want to wrap it up with amendment 248, which would lower the boundary of 250 employees to 100—is the fact that it would apply to employers with 101 or more employees. We do not want to prejudice the work of the Equality and Human Rights Commission in drawing up proposals for what gender pay gap information could be published, but providing gender pay gap information as required by the new clause would be a significant burden on business. Subsection (4) seems to allow for yet further information, besides what is specified in subsection (3), to be published.

There is nothing to prevent employers with fewer than 250 employees from reporting on their gender pay gaps, and we hope that by starting there we shall none the less encourage the same effect among smaller businesses, but we do not want to impose that burden on them yet. We think, as I shall explain, that 250 is the right threshold.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I believe that the Minister has said previously that the minute a figure is mentioned—26 weeks or 250 employees—people who are not brought within it think that the legislation disregards them. It would be honourable for employers with fewer than that number of employees to provide the information voluntarily, but the likelihood is that bad employers will not do so unless it is compulsory.

Vera Baird (Labour, Redcar)

I do not entirely share what the hon. Member for Weston-super-Mare might characterise as an approach suggesting that business will get away with all it can unless it is under compulsion to do something else. I see some large and small businesses already disclosing information; that is happening at all levels. We have tried, for reasons that I shall set out more specifically in a minute or two, to pick the right level at which, ultimately, if we have to, we will impose a burden by law. That is not to say that we do not look to the good small businesses to give a lead by example to the less transparent small businesses.

It is not that we do not expect the impact from big business to drive through little business. Odd as it may be in the current hotbed of views about banks to characterise a bank as benevolent, quite honestly, some banks have very good employment policies. Procurement policies in some big businesses are, to be honest, stronger than the Government’s and they drive equality through the small businesses that want to contract with them.

If we can get the ideas of transparency, disclosure and more equal pay into bigger businesses, we expect that in turn to be usable as leverage on small businesses, because it is clearly another thing that employers will look at when considering how responsible they are being.

However, even with the threshold at 250, the power in clause 73 covers 40 per cent. of the people working in the private sector. That is our information. We picked that level because we believe that it is when private sector employers are likely to have the necessary IT infrastructure to collate and publish the categories of gender pay gap information with minimal additional burden. It is also worth noting that we do not plan to place requirements on even public sector employers with such a low head count, as the duty in the public sector bites at 150.

A further concern with new clause 23 is that the information required to be published could lead to individual employees’ pay details being identified if there were only one or two men or women in each row in the organisation. I imagine that hon. Members can see my point: the smaller the business, the fewer there are in each category, so the closer we get to disclosing Mrs. Smith’s pay, which is probably undesirable.

On the question of the use to which information published under the proposed new clause could be put, subsection (8) presumes that an equality clause should apply in equal pay proceedings when there is a difference in average pay between women and men doing relevant types of work, which could be rebutted only by evidence that a material factor defence applied. In other words, the new clause would enable the published figures to be used as a key plank of any equal pay claim that might be brought against the employer. That would seem to be the case irrespective of whether the difference was material or statistically completely insignificant. The new clause would enable an individual female claimant, for example, to use figures that showed that women in similar jobs were in general paid more by her employer than men in support of a claim that she is being paid less than a man.

That point demonstrates well how difficult it is to get the balance right between the level of disclosure and the consequences of that disclosure for employers and employees. That is why our approach of learning from the voluntary regime and people on the front line will operate from 2010. We want to create a situation in which employers look at their pay arrangements and equalise them as far as possible without any recourse to litigation. All that the new clause would do is invite proceedings. One can be fairly sure—I do not know why I am supposed to say this—that there will be lawyers looking at the published figures, seeking to target employers who look vulnerable.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I thank the Minister for that. We are all moving in the same direction. The point is not to defeat the Government; they have moved a long way on equality matters. My fear is that this Government might not be in place for ever and that some of their measures might never come into being. I hope that she is right in her faith and belief that a voluntary regime will somehow lead the way.

One difference between us is timing. I will be brief, as we can deal with timing in the clause stand part debate. Our new clause is supported by all the women’s organisations and the unions. I take my lead from them. They have been fighting the issues for years and years. The Minister is supported by the CBI. I say no more than that.

In terms of the metrics, I am concerned that we are leaving something up in the air for the welcome discussion this summer. Maybe we can have a discussion about metrics later, but my fear is that everyone will be pleased to sign up to something that does not exist in the hope that the force behind it will never come. There are also issues related to the measurability of the metric. As I understand it, one of the arguments against it involves the volume of information that would be published were the pay audits mandatory. It would be easier for the overseeing body, which may be the EHCR, to measure a single metric around which one could look between company and between employer and not have to go through all the information. My fear is that, like targets, it will become the single focus around which people will put in effort.

Vera Baird (Labour, Redcar)

We are not looking for a single figure. It will need to be more complex than that. Surely the hon. Lady can see that by phrasing clause 73 as we have we have left open a wide margin for the parties. It is not only the CBI that is prepared to engage in the task. Obviously, the TUC is with us as well on this endeavour. We want to leave as wide a margin as possible, so that the parties can agree the best metrics. Then, of course, the advantage we have over her proposal is that they will all agree to it and get on with it, and we do not have to start litigating, litigating, litigating. I say that immensely to my own disadvantage since I am a lawyer.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I understand where the Minister is coming from, and there is progress with encouragement from the Government. However, when parties are left to their own devices and there are voluntary arrangements, the pay gap takes so long to narrow that I am compelled to think that we have to move to something stronger.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

My hon. Friend makes the important point that hon. Members from other parties would also feel frustrated—as I think the Minister would—about the time taken. The Minister’s point that lawyers would be hovering around the arrangements proposed by new clause 23 is the incentive that business and employers need to engage in a meaningful attempt finally to take action to reduce that part of the pay gap which is due to direct discrimination. It is important to recognise that this is not a lone attempt to come up with a new approach. It is something that we have been encouraged to table by organisations that are in direct contact with women and specialists in this area. That is why I encourage my hon. Friend in the approach that she is taking.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I thank my hon. Friend for that and obviously I totally agree. It is that frustration that drives me to say that I am not completely happy with the response. I do not feel that it will make the necessary difference. At an appropriate moment, I would seek the Committee’s view on new clause 23. However, I beg to ask leave to withdraw the amendment.

John Penrose (Conservative, Weston-Super-Mare)

I beg to move amendment 14, in clause 73, page 55, line 19, at end insert—

‘( ) the Armed Forces;

( ) the Security Service, the Secret Intelligence Service or the Government Communications Headquarters;’.

Joe Benton (Labour, Bootle)

With this we may discuss the following: amendment 13, in clause 73, page 55, line 20, leave out paragraph (b).

Government amendment 67.

John Penrose (Conservative, Weston-Super-Mare)

In contrast to the rather grand issues of principle that we have been discussing up until now and will probably come back to in the clause stand part debate, these are fairly technical amendments and I hope we will not need to trouble the Committee with them for too long.

Amendment 14 seeks to exclude armed forces, security services and so on from the operation of the clause. I notice that the Minister has tabled something similar in amendment 67, although not identical, and I am sure she will explain why her amendment is superior. It sounds as though we are on the same track and we await her comments on the comparative merits of the two amendments.

Amendment 13 is a probing one, seeking to assess the Minister’s intentions to apply the standards of the clause to the public sector. At the moment, it is excluded. I presume that she intends to apply the same standards through the public sector equality duty, but we want her comments on the record. Will she point us to the part of the Bill that contains that or comment on how she intends to apply them, via the public sector equality duty, elsewhere in the Bill? That would be tremendously helpful.

Vera Baird (Labour, Redcar)

The combined effects of amendments 13 and 14 would be to apply clause 73 to all employers, including the public sector—250 or more employers—other than the armed forces and security and intelligence services. However, there are good reasons why clause 73 does not apply to the public sector. The gender pay gap is wider in the private sector, where 80 per cent. of employees work. We have less detailed information on the private sector than on the public sector. The public sector will be provided for under clause 147, which contains a lower threshold than clause 73. Our detailed proposals are in the consultation documents, the closing date for which is September 2009.

Clause 73(2)(b) would ensure that the clause does not apply to public authorities that are not subject to the public sector equality duty, but that schedule does not include the Security Service, the Secret Intelligence Service, the Government Communications Headquarters or any part of the armed forces assisting GCHQ. As drafted, subsection (2)(b) would bring those agencies, and that part of the armed forces, within the scope of clause 73, but that has never been our policy intention. Amendment 67 will correct that drafting oversight by making the position clear. On that basis, I think that the hon. Gentleman can withdraw his amendment.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I am a bit confused about the purpose of the Government amendment. It would help if the Minister could clarify again the overall purpose. That would get to the heart of this group of amendments.

Vera Baird (Labour, Redcar)

I confess that I, too, got a bit confused in the middle of that response. I shall reiterate my point. We do not intend clause 73 to apply to public sector employees, for the reasons set out, and that would be the combined effect of amendments 13 and 14, even though that is not the issue—I do not think—that they were intended to probe. Subsection (2)(b) would ensure that clause 73 does not apply to the public authorities in schedule 19 which are subject to the public sector equality duty. The schedule does not include the Security Service, the Secret Intelligence Service, GCHQ or the armed forces helping GCHQ, which means that subsection (2)(b), as drafted, would bring those agencies and that part of the armed forces within the scope of the clause, but that is not our policy intention. I am sorry that I was not clear enough before. Amendment 67 will remove them from the scope of the clause.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

The Minister has made herself very clear. However, we are concerned that clause 73(2)(b) exists at all. There is no harm in having both the public sector equality duty and the tougher clause 73 requirements—we do not think that those go far enough, as we know from the debate on the previous group of amendments. Is she certain that there are not public sector organisations where the gender pay gap is just as wide and that an even tougher action than the public sector equality duty, which is an important, but slow boat, would not be best applied in those areas? It seems unfortunate to disapply the public sector, given that, if it met it, everything would be fine anyway.

Vera Baird (Labour, Redcar)

I hope that for the benefit of the amendments the position is now reasonably clear.

We are not being soft on the public sector—quite the reverse. Through clause 147, to which we shall come presently, we will require public authorities—

Ann Winterton (Conservative, Congleton)

I remind the Committee that with this we are discussing the following: amendment 13, in clause 73, page 55, line 20, leave out paragraph (b).

Government amendment 67

Vera Baird (Labour, Redcar)

Welcome back to the Committee, Lady Winterton. I believe that I had dealt with the specific technical points raised by amendments 13 and 14 and explained Government amendment 67, but Conservative Members made it clear that they intended to use their amendments to probe the bigger point that relates to clause 73 and question why the clause does not apply to the public sector.

The Bill’s purpose is not to compare the private and public sectors, like for like. The Government’s approach to the public sector is to impose an equality duty on it. One of the things that entails is for public authorities to demonstrate their compliance by reporting on their gender pay gap, though that has not been in the requirement. The proper place for detailed public sector requirements is in secondary legislation under clause 147, which we will debate in due course. That gives us flexibility to amend the requirements, should experience suggest that that is necessary.

The reporting requirement should not be seen in isolation. It relates to a number of things that public authorities should do to advance equality, foster good relations and eliminate discrimination, which are the terms of the duty. So we are not singling it out from the other specific duties. In that way, the requirement to be transparent about gender pay is firmly anchored in the wider requirements on the public sector.

To single out that requirement by also subjecting the public sector to clause 73 would introduce a sort of unwarranted double jeopardy situation. Public authorities that do not comply with their duty obligations will be subject to Equality and Human Rights Commission compliance notices, which are enforceable in the civil courts. It would be overkill to hit them with civil and criminal action under clause 73. It would also not make much sense.

The intention is that the duties will begin to operate from April 2011, which is two years before the power under clause 73 might be used. The duty on the public sector is more stringent. The equality duty requires it to have due regard to the need to advance equality, eliminate discrimination and foster good relations. As part of that, public authorities with more than 150 employees will report their gender pay gaps and other relevant metrics. As I have already explained, I would not want to lower the 250-or-more employee threshold in clause 73 to match that of the public sector.

If the suggestion is to replace the duty and pull it out of the single equality duty by putting public authorities under clause 73, it would be a regressive step for public sector accountability. Our detailed proposals for the specific duties are set out in the document, “Equality Bill: Making it work. Policy proposals for specific duties”, which we published on 11 June. That sets out specific duties to enable public authorities to carry out the equality duty more effectively. The closing date for that consultation is 30 September, and we hope to receive contributions from members of the Committee. We aim to publish our response before the end of the year.

I hope that that satisfies Conservative Members that we have gone in the right direction in putting the onus on gender pay reporting in the equality duty, with all its other characteristics, and not involving the public sector in clause 73.

John Penrose (Conservative, Weston-Super-Mare)

It is a pleasure to see you in the Chair, Lady Winterton. Based on the Minister’s response, we are quite content. We were most concerned to ensure that there would not be one law for the public sector and another for the private sector. In fact, that may still be so, but there will be a slightly tougher regime for the public sector. In that case, we have no objections, and I beg to ask leave to withdraw the amendment.

Ann Winterton (Conservative, Congleton)

With this it will be convenient to discuss new clause 9—Disability pay gap information—

‘(1) A Minister of the Crown may by regulations require employers to publish information relating to the pay of employees for the purpose of showing whether, by reference to factors of such description as is prescribed, there are differences in the pay of employees who have a disability and employees who do not have a disability.

(2) This section does not apply to—

(a) an employer who has fewer than 250 employees;

(b) a person specified in Schedule 19.

(3) The regulations may prescribe—

(a) descriptions of employer;

(b) descriptions of employee;

(c) how to calculate the number of employees that an employer has;

(d) descriptions of information;

(e) the time at which information is to be published;

(f) the form and manner in which it is to be published.

(4) Regulations under subsection (3)(e) may not require an employer, after the first publication of information, to publish information more frequently than at intervals of 12 months.

(5) The regulations may make provision for a failure to comply with the regulations—

(a) to be an offence punishable on summary conviction by a fine not exceeding level 5 on the standard scale;

(b) to be enforced otherwise than as an offence, by such means as is prescribed.

(6) The reference to a failure to comply with the regulations includes a reference to a failure by a person acting on behalf of an employer.’.

John Penrose (Conservative, Weston-Super-Mare)

During our morning sitting, when we were considering the earlier groups of amendments to the clause, we had a reasonable debate on some of its principles. I shall try to be brief, because we have given at least some of them a fair airing already. However, I want to put a couple of additional points on the record.

When I started investigating the history of the gender pay gap, I was fascinated to discover that there is something of a success story to be mentioned. That is not to say that the job is all done—far from it, there is still a serious issue, and let no one be under any illusion about its severity or importance—but it is worth while pointing everyone here and the wider world outside to the figures in “The gender pay gap in the UK” study, which the Office for National Statistics published in April 2008. Interestingly, figure 5 shows that the gender pay gap has declined from not quite 30 per cent. in 1975—the first year that the Equal Pay Act 1970 came into effect—to just under 13 per cent. in 2006. It has pretty nearly halved—albeit at a rather slow and steady, almost stately pace—over the intervening 31 years covered by the study.

It is clearly true that we have made great progress as a country, under successive Governments of different stripes, but also that there is a great deal further to go. It is interesting, looking at figure 6 in the same report, to see that the gender pay gap for full-time employees by age has declined very dramatically for people under 33. In fact, for employees under 33 the gender pay gap is now zero—or was in 2006—compared to 1975, when it was significantly higher.

It is therefore important for us all to realise that, contrary to what some people have said in the evidence that we have received, it is not fair to say that the current measures are not working. They clearly have been working over an extended period. That does not mean that there is not further to go and that progress has not been stately, as I said earlier, but this country should be proud of its track record, while none the less pointing out that an injustice remains to be dealt with.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

The hon. Gentleman will know that his figures are controversial in concentrating only on the full-time aspect, but I understand that he wants to make a point. Would he accept that, even given those figures, it might be argued that the existing legislation and the existing framework have done all that they can in those 30-plus years and that something more is now needed to finish off the job? If the existing law was going to work, it would probably have worked by now.

John Penrose (Conservative, Weston-Super-Mare)

I thank the hon. Gentleman for his intervention for two reasons. First, I was about to allude to his point of always having to be careful about using statistics. Anyone can make mistakes—the Secretary of State herself was picked up by Sir Michael Scholar, the head of the UK Statistics Authority, in a letter reported in The Daily Telegraph on 12 June in which he enjoined her to use the statistics rather more carefully than she had been doing. The hon. Gentleman is right to point out that we must be careful to define precisely to which statistics we are referring.

Secondly, on whether the existing measures are effectively spent or have run out of steam, we would need a significant period in which the steady decline of over 31 years went into reverse or flattened out. Certainly, until the end of 2006—the figures that I am quoting—the decline was pretty constant. One can look at the figures and say that they are not flattening out but coming down steadily. There are more recent figures—[Interruption] Perhaps the hon. Member for Hornsey and Wood Green will fill us in.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

EHRC statistics show that only 17 per cent. of employers have completed an equal pay audit, and the number of employers conducting audits has increased by just 5 per cent. since 2005. Perhaps something about the very small number of those exposing the information is the reason for the slow-down.

John Penrose (Conservative, Weston-Super-Mare)

I might have misunderstood what the hon. Lady was saying, but I was talking about the gender pay gap, not gender pay audits. The gap is, obviously, the thing that we are all trying to close; audits are one method by which people might try to close it. The number of people doing gender pay audits might have gone up or down in the past couple of years, but the important thing is whether the gap has continued to decrease. Based on ONS figures, the decrease has been relatively steady since 1978 or so. There was an initial dip and then a surge back upwards in the first couple of years, since when it has been, if not quite a straight line, as close to a straight line as statistics will come.

I do not want to overplay things. There is clearly more to do. There is an injustice, and I hope and expect that Members from all parties are determined to deal with it and close the gap, but it is none the less worth while to put some boundaries and numbers on the size of the problem that remains to be dealt with, because it is important. During this morning’s sitting, we discussed proportionality and whether the measures proposed in clause 73 on gender pay audits are a proportional way of achieving the benefit that we all want. It is therefore important for us to quantify the size of the prize at which we are all aiming.

We alluded this morning to considering the different causes of the gender pay gap, but I wanted to give more detail and colour to the underlying reasons for the pay gap in this country, because it is clearly important to understand the enemy in order to conquer it. The Equal Opportunities Commission published “Modelling gender pay gaps” in 2004, and its findings were that a number of different factors underpin the pay gap. The document says:

“Gender differences in lifetime working patterns account for 36% of the pay gap.”

If the gap is currently 13 per cent., 36 per cent. of that is accounted for by gender differences in lifetime working patterns, which the EOC goes on to explain means that, on average, women work for fewer years than men in full-time employment and have more interruptions to employment for child care and other family care. That is understandable and perfectly reasonable, and provided that such decisions are taken on the basis of free will and individual choice, it is a facet of modern life. However, if some of those decisions are taken under societal pressures or because of an absence of adequate child care, for example, there may be some unfair systemic disadvantage for women. That is something that any Government of any stripe, I hope, would want to address.

It is interesting to note in passing that the kinds of thing that any Government would want to do to address such unfairness would revolve not necessarily around discrimination law but around social policy dealing with disadvantage. For example, the Government might try to ensure that more affordable child care is available for working women in particular, not just at the right price, but at the right times of day or night for those in shift work and on the right days of the week so that those whose jobs require them to work at weekends are not closed out of them, and so on.

Vera Baird (Labour, Redcar)

This is very interesting, but I hope that the hon. Gentleman will not overlook the part-time element. All his figures so far have related only to full-time hourly rates, and even they are a bit controversial. Does not the difficulty lie in the fact that this is not really about the element of free will? When women who have stopped working to have children want to go back, the calibre of work available to them part-time is very low, as a rule. It does not spread across many areas of work, and the jobs are low-paid. Yes, it is natural for women to have children, and they may choose to do so, but the consequence ought not to be that only low-paid work is available to them. There is a job to be done through discrimination legislation in that field as well.

John Penrose (Conservative, Weston-Super-Mare)

I thank the Minister for her intervention, because that brings me to some other causes of the gender pay gap. She is right that women’s penetration of different parts of the employment market varies widely. For example, it is sadly true that women are under-represented in some of the more senior ranks of the private sector. The question is how we deal with that.

Emily Thornberry (Labour, Islington South and Finsbury)

The elephant in the corner of this Committee Room is that men and women have children, but it is women who take primary responsibility for those children. Because of that, it is women who take the time off and then have difficulty in getting highly paid employment thereafter. Surely the biggest step that could be taken to equalise men and women’s pay is for men to start taking more responsibility for, and to take time off to have, children. Does the hon. Gentleman agree that we should be changing social policy and, possibly, legislation so that it is easier for men to take paid time off work to look after children?

John Penrose (Conservative, Weston-Super-Mare)

I thank the hon. Lady for her intervention, which illustrates the point that I am trying to make. She is right to say that the syndrome that she is describing is one of the root causes of the inequality that we see. That is a question of society’s attitudes, tradition and, as she rightly points out, the way in which legislation is set up and the way in which companies approach maternity and paternity leave.

The Conservative party has produced some proposals to try to reduce the mismatch between those two sets of leave. Even if the hon. Lady and I do not necessarily agree on those, it is none the less true that it would be far better to make sure that men are not just able to take a more equal share of child care, but that the system is arranged in such a way that it makes it simpler for them to do so. However, even if the Minister had a magic wand that she could wave to change that tomorrow, we would still have the issue of free will, free choice and society’s attitudes. It would be wrong for all of us in this room to dictate to parents how to allocate the child care responsibilities within their family unit. None the less, it is vital that we create an environment where it is possible for the burdens and tasks to be shared more equally.

Emily Thornberry (Labour, Islington South and Finsbury)

Is it therefore the hon. Gentleman’s party’s policy to increase the amount of paid leave for fathers?

John Penrose (Conservative, Weston-Super-Mare)

I do not think that it is. I think that there are other ways out of the particular inequality conundrum than just levelling men’s paid leave.

Mark Harper (Conservative, Forest of Dean)

The hon. Member for Islington, South and Finsbury makes a good point. Indeed, earlier in our discussions we made that very point when we tabled a probing amendment about the maternity clauses and asked why they did not address paternity. Looking forward to this part of the debate, I made the point that, if men and women took a more even role in child care, that, in itself, would help the cause of closing the gender pay gap and giving women more opportunities.

On the specific question that the hon. Lady raises, we have published proposals to look at allowing maternity leave to be equally shared between either parent so that we encourage both fathers and mothers to share child care more equitably, without increasing the overall burden on businesses.

John Penrose (Conservative, Weston-Super-Mare)

I thank my hon. Friend for filling in the policy details since he is our Front-Bench spokesman on the issue. I hope that that has clarified an alternative way of dealing with the real problem that the hon. Lady describes.

Emily Thornberry (Labour, Islington South and Finsbury)

Is the issue pay? Is it Conservative party policy to pay men to look after children and to increase that allowance? That is my point.

John Penrose (Conservative, Weston-Super-Mare)

I am happy to inform the hon. Lady that that is not the Conservative party’s point of view at the moment, but we will continue to roll out policies between now and the general election, whenever it is called.

Vera Baird (Labour, Redcar)

The hon. Gentleman can see the problem, can he not? If there is unequal pay, and I accept that there is, it will not be the higher paid person who takes time off for child care—unless we pay them to do so.

John Penrose (Conservative, Weston-Super-Mare)

The point that I am driving at is that we are all trying to attain some equality between the sexes. None of us has the answer to perfect equality, and there is a balance to be struck, particularly at a time of national recession when jobs are hard to come by, between equality and trying to ensure that we do not increase the total burden on employers.

Yes, it is an important matter and it needs to be pushed forward. My party has come up with some proposals, but I hope that the hon. Member for Islington, South and Finsbury will agree that she is supporting the original matter to which I alluded, which is that many causes of the gender pay gap are outside the question of discrimination by employers. Her example is a good one. The solutions are to do with flexible working and the balance between maternity and paternity leave rather than discrimination law.

Sandra Osborne (Labour, Ayr, Carrick and Cumnock)

Does the hon. Gentleman not understand? It is gratifying to hear a Conservative MP talking almost like a feminist. We all appreciate that discrimination is rooted in the structure of society and its various cultural, social, political and economic aspects. Some of us have been fighting and campaigning against it for years and have tried to seek improvements. Does he not understand that it is the same old same old? Frankly, pigs will fly before we hear of any positive action from his party on how the overall problem should be solved. We want the solution to equal pay now, not in another 30 years’ time.

John Penrose (Conservative, Weston-Super-Mare)

I was about to thank the hon. Lady for calling me a feminist. I would have been delighted to be described as such, but she rather spoiled it by having a go at the rest of my party’s policies. I thank her for the first part of her intervention, but not the second.

Is it not clear that the causes of the gender pay gap are far more complex and nuanced than we shall be able to explore this afternoon? This morning, we alluded briefly to the third tranche of the gender pay gap, mentioned in the study by the EOC, which is the famous 38 per cent.—the other factors associated with being female. In other words, 38 per cent. of 13 per cent. of the gap is associated with other factors. That includes direct discrimination, differences in labour market motivation and the preferences of women compared to those of men. As the Minister said this morning, some of that will be attributable to indirect discrimination or systematic disadvantage.

It is worth pausing to consider systematic disadvantage. It can hide a huge variety of things. It can hide differences in education and it can hide differences in child care, something that has already been mentioned. It can hide differences in language and it can hide differences in aspirations and expectations. All the reasons why women are not able to be as successful in business as men are subtle, slippery and hard to change, but they are all real.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I am interested in the hon. Gentleman’s argument. Undoubtedly a great number of factors play a part, but why should that prevent the hon. Gentleman from wanting to address the factor that is discrimination?

John Penrose (Conservative, Weston-Super-Mare)

The hon. Lady leads me nicely to my next point. This morning, the Minister said that we do not know what proportion of the gender pay gap is due to direct or indirect discrimination. We all have our suspicions, but we know that it is less than 38 per cent. of the 13 per cent., as the 38 per cent. includes direct and indirect discrimination plus the other factors that I have described. It must therefore be a sub-set of that 38 per cent. In other words, at the absolute most, it cannot be any more than about 6 per cent. or 7 per cent. Conceivably, it could be only 2 per cent. or 3 per cent. That would place a significant set of parameters around the size of the problem to be addressed as a result of the gender pay audits.

To come to the hon. Lady’s specific point, it is important that we acknowledge that gender pay audits might have a place. As we discussed this morning, my own party agrees on that point. Ours would be a narrower application than hers or the Minister’s. None the less we agree that they might have a place, in some cases. We are arguing for a narrower application because the size of the prize is much smaller than anyone has had a chance to illustrate in our conversations thus far. Even if the size of the prize is only 3 to 6 per cent., however, it could still be tremendously worth while.

John Mason (Scottish National Party, Glasgow East)

I appreciate the hon. Gentleman’s point. However, much of the Budget is also fixed annually, and only a small part of it can be changed. Presumably, he agrees that it is still worth while putting forward a Budget. By his logic, however, if only a small percentage is affected, we should not do anything.

John Penrose (Conservative, Weston-Super-Mare)

Again, the hon. Gentleman leads me on nicely to my next point. Even if the size of the prize is only 3 to 6 per cent., it might still be worth while. I think that we all agree that the injustice of the gender pay gap needs fixing. The question is not, therefore, whether it is worth doing, but how we do it, how much it will cost and whether other parts of the gender pay gap can be addressed faster and for less cost. Should we be focusing our fire on that area first, or more strongly? Should we do that as well as other things or instead of other things?

It might very well be that we can get rid of half of the remaining gender pay gap by making other changes, such as better child care, which we have discussed already. We could fix half of the gender pay gap quickly by doing those sorts of things, rather than by banging on about this particular problem, which might still take many years to fix. That is my answer to the hon. Gentleman: it might still be worth while, but we must compare it with what else could be done and assess the costs and burdens being imposed in order to achieve this relatively small, but none the less potentially valuable attack on injustice.

That brings me to the Government’s figures in the impact assessment, which attempt to put a size on the financial burden of achieving this relatively small but potentially important reduction in the gender pay gap. We discussed that point briefly this morning, but I want to spend a bit more time on it now. For the purposes of this conversation, I shall ignore the Government’s figures on getting to grips with the legislation, which come under a different part of the impact assessment, because those costs will apply to a much wider range of clauses.

I shall focus on the one-off and annually recurring implementation costs, which the Government have calculated. They caused me—and others, I suspect—great concern. Just how widely did the Government check and consult on those figures before they were published? I ask because a number of business groups have told us that they were assured just one week before the Bill was published that clause 73 would not appear in the Bill at all. They said that they had been assured, informally, that gender pay audits were not part of the draft Bill—but one week later, up they popped.

Vera Baird (Labour, Redcar)

This is not a gender pay audit. Does the hon. Gentleman not know the difference between a gender pay audit and transparency? There are no gender pay audits in the Bill. I challenge him to find one.

John Penrose (Conservative, Weston-Super-Mare)

Annexe M of the impact assessment is entitled “Gender pay gap reporting in the private sector”. I apologise if I have been using the wrong technical term, but I think that what I was driving at was very clear. My concern is this: by definition, these companies are large, are at the top end of our economy’s employers and have more than 250 employees. However, the one-off implementation cost for one of those large organisations to come up with a satisfactory report on the gender pay gap is assessed at £92.24 per organisation. After that—magically—the cost per company each year is assessed at £15.38. If that was true, it would go a long way towards dissolving and salving my party’s concerns about the clause, but I am afraid that it really does not pass the sniff test.

We are gravely concerned that the figures are not worth the paper they are written on, so may I ask the Minister, please, to give us substantially more detail on how they have been calculated? From what I can see, the Government have assumed that it takes one middle manager in the human resources department a total of half a day to get everything done to prepare for reporting on gender pay gaps in that organisation for ever. After that, it takes the same middle manager 30 minutes a year to deal with the report.

In such a large company there will be different divisions, legacy software systems and data that are not held in the right way. The Government have made a series of optimal assumptions about the way in which companies hold their data that, frankly, are not believable. Their assumptions are not just a bit unbelievable. I do not think that these numbers are wrong by a factor of two, 10 or 100; I suspect that they are wrong by a factor of between 100 and 1,000—they are badly off beam. It is impossible to envisage such a large, and therefore complicated, company needing half a day’s work of a middle manager in the HR department, with absolutely no input from anyone in the IT department. Apparently, such input will not be required at all, and the middle manager’s work will not be checked by anyone, even though it will subsequently be crawled over by auditors, trade unionists and lawyers for the very purpose to which the Minister has alluded: to check whether the company can be sued or taken to court.

It is inconceivable that the work will not be done with great care and that it will not require a great deal of IT input for at least a large proportion of the companies required to fulfil it. It is also inconceivable that when the work has been done, it will not be checked by everyone right up to, and probably including, the entire board of directors, given the severity of the issue that we are talking about. Therefore, the costs are liable to be massively—not just a bit, but massively—larger than the Government’s estimates, and that is the concern. If the costs were genuinely so low, it would be easier for everyone to say, “This is a relatively cost-free, straightforward thing that we shall all get on and do.” However, given that the size of the opportunity that we are aiming at is much smaller than we have ever had a chance to discuss until just now, and given that I fear the costs are much larger than those illustrated in the impact statement, I am afraid that the calculations start to come out the wrong way round, and that is the reason why Great Britain plc is so concerned.

Our new clause is designed to illustrate a point. It takes existing clause 73 and applies it not as a gender pay reporting mechanism, but as a disability pay reporting mechanism. If this is such an important issue—according to the Government, it clearly is, and we agree—and if the Government’s proposal is the right way to deal with it, why are we doing it only for gender pay reporting? Why are we not doing it for many other strands, such as disability, which is the one that we picked because it is a good example?

Mark Harper (Conservative, Forest of Dean)

My hon. Friend might be interested to know—I am sure the Minister will be, especially as the issue is relevant to the public sector—that every single Government Department pays its disabled employees less on average than its non-disabled employees. In a number of them, that pay gap is significantly higher than the gender pay gap. The Home Office, which is the worst offender, pays disabled employees on average a third less than non-disabled employees. I am sure that that is not a comparison of people doing like-for-like jobs and that it has to do with the level of the organisation that people have reached. However, it touches on exactly the same issue, and the problem is bigger than the gender pay gap in some Government organisations.

John Penrose (Conservative, Weston-Super-Mare)

I thank my hon. Friend for his helpful intervention. It precisely illustrates the point. If clause 73 is the answer to pay gaps, why is it the answer to only the gender pay gap?

Vera Baird (Labour, Redcar)

May I ask the hon. Gentleman a different question? If he is going to vote against the clause, why is he now trying to attach disability to something he is going to oppose?

John Penrose (Conservative, Weston-Super-Mare)

Because we are trying to probe the Government’s reasons for doing this only for the gender pay gap. We think that there is an inconsistency in their logic. If the clause is, as the Government claim, the answer to the problem, why should it be applied only to gender pay reporting and not other inequities? Alternatively, if the clause is not the answer, we will be happy to vote it down, because other things should be done first. That explains why we have tabled the new clause, although we are also slightly bound by the selection of the Chair. It is important that we explore the matter. Why, under the Government’s proposals, will the measure apply only to gender pay reporting, and not to other strands of discrimination—disability was the one that we happened to choose to illustrate our point?

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

It is nice to see you in the Chair again, Lady Winterton.

From listening to the hon. Member for Weston-super-Mare, it seems that he wishes to minimise the seriousness of the discrimination that women experience, either because of their “choice” of jobs, or because of their absence from the workplace due to having babies. I will certainly look at the figures he puts forward, but given my impression from the evidence session, I think that he has reduced the number as far as possible. The 13 per cent. figure that he quoted, I understand, was basically a 17 per cent. pay differential in full-time work. We are starting from a different basis and we might not agree on figures.

John Penrose (Conservative, Weston-Super-Mare)

I take the hon. Lady’s point about having to be very careful with figures that we cite. Mine came from the ONS, as I thought that I should base my position on an official set of numbers. If she has a figure that she feels is better, I ask her to let me know.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I thank the hon. Gentleman for that intervention. I have figures supplied by all the normal organisations. My anxiety is not truly with the gender pay information clause per se, but the timing of its introduction through regulation. I feel—I believe that there are Labour Members who feel this too—that women have waited a very long time. Organisations have been able to reduce the pay gap voluntarily for some time, although the statistics that I read from the EHRC on the number of employers that voluntarily complete equal pay audits make it clear that the rate of progress is pretty slow. I am not convinced that another four years of volunteering, even with the work that the Minister says will go on regarding metrics, will produce the step change that women need and deserve—and they deserve it now.

I was quite shocked by the CBI’s presentation at the evidence session because, like Conservative Members, it was pushing the idea that there is very little discrimination—I am still not convinced by that—or rather that that is not the reason for the pay gap.

John Penrose (Conservative, Weston-Super-Mare)

This is an important nuance, but it is only a nuance. It is not a question of trying to minimise the level of discrimination. The point that I was trying to make was that no one, including the Minister, according to what she said this morning, knows precisely how much of the gender pay gap is due to discrimination. We can put boundaries on it, but we do not know within those boundaries how much is due to discrimination. I am sure that if she feels that my calculations of the boundaries are wrong, she will present alternative figures. None the less, it is important to know what we know. Without coming over all Donald Rumsfeld, it is important to understand what the known knowns and the known unknowns are.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Of course there are other factors, but I was merely saying that I felt that minimisation was going on.

The factors are being addressed. The Government have made tremendous strides on child care, and initiatives such as Sure Start have changed lives and made significant inroads into the problems. All the things that might discriminate or do discriminate against women give them less choice and less money than their male equivalents. That issue needs to be addressed and, to some extent, it is being addressed. The significant problem that remains is hidden within business in this country. The whole point of gender pay information is to create transparency and remove the problem from its hiding place so that we can all see what is happening.

Let us say that the CBI was right about this work. I will listen intently to the argument about the cost to business, but I doubt that it would be anything like as much as the hon. Gentleman says. However, let us see what is happening. We have recently, in the case of our own expenses, seen that transparency has been the only thing that can shake the establishment and change what was being hidden underneath. Transparency is the answer when it comes to providing the step change that we want on discrimination in respect of women’s pay.

Mark Harper (Conservative, Forest of Dean)

One thing that the hon. Lady is missing is the information that one would need to produce. That is one reason why the Minister, rightly, has got the EHRC to carry out this discussion. Part of the process is straightforward, such as publishing a list of what people are paid. The difficulty comes when considering the content of jobs, comparable jobs and comparable pay. In a large organisation, if a bunch of people are doing job A and another bunch are doing job B, and they are the same, that is fine. However, if there is a multiplicity of jobs, it will mean considering the content of jobs, the skills required for them and what people are paid, and then making comparisons to determine whether that makes sense. That will not be straightforward. The CBI, the unions and the EHRC are trying to work out whether there is a way of producing that information in a simple form, but I suspect that it is not straightforward.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

That is clearly one issue that we have to grapple with, because we are talking in advance of people coming out with the information or the metrics, around which there might be a coalition of the willing to agree the way forward. As the hon. Gentleman will know from this morning’s sitting, I am in favour of somewhat more rigorous and formalised pay audits, which would not go around metrics, but would involve, as he described, full disclosure of pay, levels of pay, values of pay and packages relating to pay. As I said, the only way to make the step change that women want for equality—without having to wait another 39 years, as we have waited since the Equal Pay Act—is to make these things compulsory. I am not convinced by the voluntary way forward.

John Mason (Scottish National Party, Glasgow East)

Does the hon. Lady agree that we are getting rather a lot of red herrings from the Conservatives? Companies produce masses of information—probably too much—in their accounts. For example, they produce a list of pay for the top directors within bands. That information is also open to debate and discussion as to whether one company is paying its directors too much compared with another. That is not a reason for not producing the information. The first priority should be to make the information available, which may then lead to other questions that the Conservatives can worry about in due course.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I thank the hon. Gentleman for that helpful intervention; he is entirely right. The hon. Member for Weston-super-Mare was talking about an inordinate expense, and the point needs to be developed further. I do not accept what he said, but, were he to be right about the cost, no one would take such action voluntarily. [Interruption.] From a sedentary position, he indicates with an arm gesture that the idea is to get everyone off the hook.

John Penrose (Conservative, Weston-Super-Mare)

Actually, my arm gesture was supposed to indicate that the hon. Lady is right that if the costs are as high as I fear they are, no one—including her, I hope—would want to take such action.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I do not accept the figures; I am waiting for the Minister to come back on them. From my experience in business, what we are discussing is not rocket science—particularly for big companies that have the wherewithal and the IT systems to produce such information. Little companies mostly know their pay levels. There are some issues about correctly valuing work, so we will have to disagree—pretty profoundly, actually.

Issues around discrimination are hidden in the system. The CBI has a point that often women and men are in different types of job and women’s work is paid less, even if it should be of equal value. In the evidence sessions, the Fawcett Society gave the example of paying people who pack meat in a factory differently from forklift drivers. Even though the skills and experience needed for those two jobs are comparable, because one job has been female dominated it tends to be a lot lower paid than the one that has been male dominated—that is partly a link to the previous discussion. Those employers are breaking the law and not necessarily realising it. That is why we have to require them to address the issue. If that information was published, it could be seen, realised and addressed, and the issue could be dealt with. There are some bad employers who get away with underpaying women and therefore resist transparency. Then there are those who discriminate without knowing it because they do not even realise that they are underpaying or undervaluing the work of women.

On the issue of transparency and the CBI’s assertion that many of their companies voluntarily publish gender pay information, we feel that the good guys will always publish such information. However, we are dealing not just with the good guys, and we have to go after those companies who use the fact that no one can see what they are doing to pay women less, either in particular or systemically.

I will be brief because we have already covered which factor is the largest and what the Fawcett Society said about the pay gap. However, a huge penalty attaches to part-time working, to motherhood, to discontinuous labour market records and to care and responsibility, the vast majority of which accrue to women. Organisations that are good at addressing pay, and that are open and above board and will publish such information, tend also to be those companies that have good policies and good practice and that deal with and get the benefits of diversity by promoting equality for women. Liberal Democrat Members feel that the introduction of mandatory pay audits would have a beneficial effect on companies.

Vera Baird (Labour, Redcar)

The hon. Lady has mentioned that a number of companies already disclose such information. According to the Tory version, however, they must be completely mad, because disclosure is so expensive that it would be silly to do it.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

Conservative Members are coming from a particular place in this discussion. Those companies that already have pay audit systems seem to do everything better—they seem to have women in much higher grades, better policies for pregnancy and maternity, part-time and flexible working and so on. Liberal Democrat Members think that mandatory pay audits would have greatly beneficial effects—immediately and compulsorily—making a real difference to women. However, we understand the Government’s position and what they are trying to do. We do not agree with their position, but we will not oppose it.

Transparency, ultimately, is the key. That is why pay audits are necessary and must be mandatory. We cannot wait another four years. We did not introduce them in the times of plenty, or when the sun was shining, as Conservative Members like to put it. We do not want to see the proposals kicked into the long grass, particularly with the uncertainty about who will be the next Government. It is clear that we must take action now, and that voluntary pay audits are like waiting for Godot. If the Government fail to take such singular action in the Bill to change women’s lives for good, ironically—for they have an honourable record on equality—they will decree that women will remain second-class citizens, possibly in perpetuity if there is a change of Government.

A Labour Government could and should, if only for legacy, right the historic wrong and change the future of women. Unequal pay has meant women suffering in so many ways. Women have so many caring duties and come off so badly in terms of separation, divorce, child rearing and so on that, at the very least, we should ensure that they receive equal pay for equal work. If we do not do so now, then when, because 2013 will be too late?

Vera Baird (Labour, Redcar)

Interestingly, the Conservative Opposition seek simultaneously to vote down a clause that they intend to add to—I am sure that there is a line of rationality somewhere and that I am failing to find it.

New clause 9 would enable the Government to require private sector employers with at least 250 employees to report on their disability pay gap as well as their gender pay gap under clause 73. The hon. Member for Weston-super-Mare has spent a considerable amount of time, not just today but on many occasions, seeking to minimise the issue of pay discrimination against women in business. He does not tell a convincing story, and I shall come to that when I have dealt with the disability point.

The hon. Gentleman tries to pinpoint the problem, which he thinks is not the pay gap. He thinks the problem is elsewhere, including in poverty of aspiration among women—a deplorable assertion that is not too far from blaming the poor for being poor, as the Tories have habitually done. When he starts talking about one of the reasons being that women do not have expectations or aspirations—

Mark Harper (Conservative, Forest of Dean)

Will the Minister give way?

Vera Baird (Labour, Redcar)

No. What I shall do is point out that there is a better understanding of where the disability pay gap comes from. The hon. Gentleman has had plenty of time to make his position clear. He made it all too clear for people watching—I see nods from all quarters. The hon. Member for Weston-super-Mare has, frankly, not a clue about the cause of the gender pay gap, but he argues a particular point to try to counter the need for a long-overdue toughening up of provision.

What is clearer is the cause of the disability pay gap. Let me deal with it numerically first. The disability pay gap is 6.4 per cent., compared with the figures that the hon. Gentleman quoted for the gender pay gap, which is much bigger. He of course excluded entirely from consideration the sharp end of the gender pay gap, which shows that the difference in the average hourly rate paid to a woman working part-time and a man working full-time is about 30 per cent. The lesser pay gap in relation to disability is none the less important. The hon. Gentleman made the point that we need to get more disabled people into work and to get them further up the ladder once they are in. That is where the deficit currently is in relation to disability. There is a clearer understanding of the causes and a readier recipe.

In any event, we already require private sector companies with more than 250 employees to include a statement in their directors’ reports on how they go about recruiting disabled people, retaining people when they become disabled during employment, training disabled employees and ensuring that they progress. That is the focus. We should continue to get more disabled people into work and ensure that they are represented at all levels of the workplace. That, rather than the new clause, is the route to reducing the disability pay gap and, more widely, to engendering better participation and fuller lives for disabled people because they get into better-quality jobs. Disabled people’s participation has increased some 10 per cent. since 1998. Some Government initiatives have helped, but we need to get people further in work as well as getting them into work. The positive action provisions in the Bill will help with that.

We already have a specialist disability employment programme that works with thousands of disabled people every year. In last year’s Green Paper, the Department for Work and Pensions said that we would press ahead with an enhanced specialist disability employment programme: work preparation, Workstep and the job introduction scheme. From 2010, that will provide a more flexible and personalised service to those disabled people with the highest support needs.

Last year, we doubled the access to work budget, which helps disabled people move into work and to stay in work. It provides funding to remove practical barriers when it is unreasonable to expect an employer to fund the entirety of such costs. We also think it important as far as possible to ensure that our approaches to the public and private sectors are consistent. There are no plans at present to require the public sector, through a specific duty, to report on its disability pay gap.

The public sector equality duty will build on the existing disability equality duty with a new specific one, underpinned by greater use of evidence and more consultation, and the involvement of those who will benefit from such a specific duty. There will be transparency and strong leadership from the public bodies to which we have given the task. Progress in securing improved outcomes for disabled people in the labour market is being made through the Bill, and it will be further enhanced across the private and public sectors. We are satisfied that that is where our focus should be, and I therefore invite the hon. Gentleman not to press the new clause to a Division.

We had quite a bit of the stand part debate this morning, so I shall just add some specifics and make some general remarks about the ludicrous assertions on how much it is likely to cost to present data that are already available in businesses. Various references have been made to the burdens on business—Tories talk about those all the time—and the extra pressure of the recession. I want to make it clear that for this Government, equalities are not just for the good times; they are for the bad times too. As it happens, 2013 is some time away, and we hope to be well through the recession before any such measure is compulsory.

We acknowledge that some employers who are only just above the threshold of 250 employees might need to make adjustments, but the EHRC exists specifically to provide support in exactly such cases. We think that employers will meet their reporting obligations in the event that the power needs to be used in 2013, and there will be sanctions to follow if they do not. It is a long distance away, but it is none the less necessary to mention that there will be civil and possibly criminal sanctions for breach in due course if we cannot make voluntary arrangements. However, no criminal sanction is expected to entail a fine of more than £5,000. Contrary to what the Tories are suggesting in seeing obstacles all over the place, we hope that business understands better than it does that equality and business progress go together.

The hon. Member for Weston-super-Mare talked about equal pay being a good news story, but if we continue to progress in eroding inequality at our current rate—to use a calculation that I made for a different debate not very long ago—it will not be my daughter, my granddaughter or my great-granddaughter but my great-great-granddaughter who has a hope of equal pay with men. That simply will not do. He is pleased to say that on one measure, under-33s receive equal pay, but he must look at the real position. For a short period, single young women and single young men might have equal pay, although there is a good deal of evidence that within 12 months of graduation, women earn less than men, even in the same fields.

The position is not as clear as the hon. Gentleman suggests, but all manner of things have an impact, notably the ghettoisation of women’s work into caring, cashiering, catering, cleaning and clerical—the well-known five Cs—which are dominated by women, dominate the available employment for women and are low-status and low-paid. The availability of good-quality part-time work is limited, and it is unfortunate that the hon. Gentleman chose to leave out the part-time figure from all that he quoted about the progress that we have made, because it is a major factor.

It is not a surprise to the world that women have children, stop working to look after them and then want to come back part-time, so why is it acceptable for part-time work to be low paid? It is not, which is why we will create transparency, find out where that low pay is and get rid of it so that women are not penalised. Many of those women, of course, are single parents, as 90 per cent. of single parents are women. They will not be penalised. We will bring the matter out.

The hon. Gentleman’s proportionality argument does not work. We are not talking about a small, defined amount of discrimination. We simply do not know what the discrimination element is, but it is considerably bigger than the figures that he quoted, as I know from my 30 years’ experience in the field and from the Fawcett Society and all the other contributors, who are not happy with the attempt to minimise its role. If a single parent suffers only £1 less pay per hour than a man, she is suffering grievous inequality, which is likely to have a knock-on effect on her lifestyle and those of her children. That is not something that lends itself to being assuaged gently by proposals without any teeth. It must be stopped, and it must be stopped now.

The hon. Gentleman said that we could perhaps stop half of unequal pay if we had child care. Working that out would need a complicated formula, but he just plucked the figure from thin air. The Tories have no particular policies to enhance child care. When it comes to sharing care between fathers and mothers in order, perhaps, to free more women for work, we find that the only Tory proposals are unfinanced. Consequently, it will always be the lower paid who look after the children, and there will not be the pressure that there ought to be to increase female pay. He has no answers to unequal pay, whether or not it comes from discrimination. He is opposed to trying to get rid of discriminatory equal pay. On what basis exactly? Because he says that our figures on the cost are “not worth the paper they are written on.” Of course, he has no figure to put in their place. He has nothing except his belief. Lots of people believe in fairies at the bottom of the garden. There is no evidence of that, but there is evidence in our impact assessment of the exact cost.

John Penrose (Conservative, Weston-Super-Mare)

Will the hon. and learned Lady give way?

Vera Baird (Labour, Redcar)

Not right now. Many companies are already undertaking pay audits voluntarily. How does that square with the prohibitive costs agreement? If it were as dear as the hon. Gentleman says, they would be mad to do even the small publication that we require in clause 73. People do pay audits systematically throughout their businesses because, unlike the Tories, they know that paying women fairly is good for their business and helps them to attract talented women.

Mark Harper (Conservative, Forest of Dean)

If, as the Minister says, companies are acting in that way already and recognise that such measures are good for business—a point that we have made today and my right hon. Friend the Member for Maidenhead (Mrs. May) made on Second Reading—why does she believe that the provision is necessary? The fact that she is making it voluntary for the first four years suggests that she thinks—if not she, then other members of the Government—that there is a case about its burdensome and costly nature, which is why it is not being brought in immediately and she wants to leave it to see whether businesses can be persuaded to do it by the case that she is putting.

Vera Baird (Labour, Redcar)

First, there is a big difference between those who take such action and the rest who do not, and that requires legislation. Secondly, we are not leaving it to lie because of burdens. We are seeking a consensus so that such action will be taken voluntarily and more quickly than if we suddenly slammed gender pay audits on the whole of business. Let me make it clear: it speaks volumes when the hon. Member for Weston-super-Mare does not know the difference between a gender pay audit and the provision, and suggests that businesses thought that there would not be gender pay audits one week, while there would be the next week. That shows that the Opposition do not have a clue. They are not in this field in any way. The requirements are yet to be fixed, and they do not resemble a gender pay audit.

The only gender pay audit that has ever been proposed in this Parliament is the one that the Conservatives suggested in the Bill of Baroness Morris of Bolton, which was dissected mercilessly in the Lords and shown to be a complete farce not by a member of the Labour party, but by Lord Lester of the Liberal Democrat party. The provision does not require equal pay audits. The hon. Gentleman thought that it supported a dreadful disclosure. Unfortunately, he does not understand the difference between such provisions.

We have been clear that we expect that business will—as it says it will, contrary to what the Tories are suggesting—start reporting all the more not only when the CBI helps them to do so, but when they recognise that unwittingly they pay unequal pay. As for implementation costs, businesses of 250-plus employees already collect all the information that we require. They will have the necessary IT in place; the costs will be limited to presenting the information in an accessible format and publishing it, for example, on websites. Part of the job that will be done by the teams set up under the EHRC will be to identify exactly a system that is achievable within acceptable cost parameters for business.

Should the clause stand part of the Bill, it will push forward the cause of women’s equal pay immeasurably. If the Tories vote against it, that will speak volumes to the public.

John Penrose (Conservative, Weston-Super-Mare)

I obviously need to say whether we will press new clause 9 to a Division. I want also to respond to one or two points made by the Solicitor-General, given that she was not taking interventions—from me, at least. The Minister asserted strongly that the Government know and have deeply researched the costs per company for producing the pay reports—I am calling them that to avoid upsetting her again—and she has backed that up with the Government’s impact assessment. It was revealing that she then said that there will be an extensive consultation with business to work out how it can be done, and what parameters can be reported and how in a low-cost way. I am not sure that she can have it both ways—to have an impact assessment that is done and dusted and very solid, yet saying the Government will consult on the best way to do it and minimise the cost that way. Clearly, there is a difference. [Interruption.] If the Minister would like to make an intervention, I am happy to take it.

Vera Baird (Labour, Redcar)

It is a very simple point. We have a fixed point now that we think will be the cost. If we can negotiate it even lower by involving business, of course we will. Is that difficult to follow?

John Penrose (Conservative, Weston-Super-Mare)

It is delightfully easy to follow. It is, however, rather hard to believe. But I understand that the Minister feels very strongly about it. It is noticeable that she is getting rather upset by the fact that I do not agree with her, but perhaps we can maintain a degree of equilibrium and accept that reasonable people can agree to disagree on the matter. Reality will prove which one of us is right in the future.

On new clause 9, I was struck by the fact that the Minister relied heavily, and fairly, I thought, on saying that a great deal of work can be done to improve the disability pay gap by reasonable adjustments and positive action. I was struck, though, that that argument does not seem to have the same degree of salience in her mind for the gender pay gap. However, given where we are, the importance of making some progress and the fact that we have thrashed the issue very seriously, I will happily not press the new clause to a Division and come back to it later.

Clause 76

Sandra Osborne (Labour, Ayr, Carrick and Cumnock)

I want to ask the Minister a brief question. I hope that it is on the clause—no doubt you will be quick to tell me if it is not, Lady Winterton. Albeit that I have a long coastline in my constituency, I do not know much about seafarers. As I understand it, for some time the Government have been promising to reform the seafarers’ exemption from the Race Relations Act 1976 and to change that outdated discriminatory legislation. However, I understand that the Bill does not contain specific proposals to reform the existing seafarers discrimination, but that enabling legislation will allow reform in secondary legislation. Clearly, the seafarers and the trade union wish the Government to commit to full and effective reform of that discrimination legislation as a matter of urgency. I hope that the Minister can respond to my points.

Vera Baird (Labour, Redcar)

I shall try; I can give a partial explanation and then write with the rest. My hon. Friend will have that before Report, in case she wants to seek any changes then.

Section 9 of the Race Relations Act 1976 allows for differentiations in pay on the grounds of nationality. The Bill does not retain that provision for seafarers recruited outside Great Britain and in line with global shipping practice. The details of the regulations have not yet been settled, but we anticipate that the regulations applying the employment provisions to seafarers will allow employers to continue to operate pay rates that distinguish on the grounds of nationality between seafarers recruited outside Great Britain, other than those from the European economic area and relevant associated states. If there is more to it than that, I shall write to my hon. Friend. However, it is quite clear—I am afraid—that pay differentials will remain between those recruited from affluent Europe and those from other areas of world.

Clause 77

John Penrose (Conservative, Weston-Super-Mare)

I beg to move amendment 240, in clause 77, page 58, line 4, leave out ‘with or’.

Ann Winterton (Conservative, Congleton)

With this it will be convenient to discuss amendment 241, in clause 77, page 58, line 6, leave out ‘with or’.

John Penrose (Conservative, Weston-Super-Mare)

I hope that the amendments are entirely technical ones. I am relying on the Minister’s expert legal brain to solve the problem about which we are worried. As the notes explain, clause 77

“contains a power to make an Order in Council in relation to work on board offshore installations. The power may be used to apply Part 5 (with or without modification) to those working on such installations.”

The amendments would trim that power, so that it can no longer be used to apply part 5, with or without modification, but just without modification. Are the Government wedded to allowing part 5 to be applied with or without modifications? If so, will any legal limits be set to the extent of the modifications that can be proposed? I am sure that we are all happy to accept an assertion of the Minister’s good character and intentions, and so forth, and no doubt she would apply the provision responsibly, but it is important to bind future Ministers and to ensure that they do not have untrammelled powers that are not subject to parliamentary scrutiny. It is an entirely technical point on which I hope that she can reassure us.

Vera Baird (Labour, Redcar)

I am pleased to be able to make this clear. As the hon. Gentleman said, leaving out “with or” would, in effect, exclude the power to make modifications to the provisions. However, the power is a limited one that allows the provisions of part 5 to be modified in their application to offshore work, but it does not allow any limitation of the substance of the protections in the Bill. How the protections apply may be modified. If we accepted the amendments, we could only use the order-making power in clause 77 to apply part 5 and the corresponding Northern Ireland legislation to offshore work without modifications.

Modifications of the law, when applied by means of secondary legislation, are not new; it is simply a prudent approach to drafting. I could give several examples. For instance, section 201 of the Employment Rights Act 1996 enables the application of that Act “with or without modification”. So we are not doing anything novel. It is important in a consolidation exercise to ensure that we have sufficient flexibility, especially in relation to offshore work, to adapt the legislation to the technical and practical realities of the offshore environment. We do not have any modification in mind at present, but we might at some point find it necessary to adapt the terminology in part 5 to ensure that it translates appropriately to particular circumstances—for example, those of workers who spend part of their time on ships and part on rigs.

Such an approach will facilitate a clearer and more accurate application of the provisions of part 5 in what is characteristically a very fluid area of employment, thus enabling the modifications that might be necessary to ensure that the law works in the various situations to which it will be applied. Probably the important point is that this is about the modification of the application to offshore work, but it does not allow any limitation of the substance of the protections contained in the Bill. That is probably the point about which the hon. Gentleman sought assurance, and I am pleased to be able to give it.

John Penrose (Conservative, Weston-Super-Mare)

That is an admirably clear and concise response, and I am sure that everyone accepts the need to make modifications for the particular situations on board ships or rigs. Based on the Minister’s reassurances, I beg to ask leave to withdraw the amendment.

Clause 78

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I beg to move amendment 243, in clause 78, page 58, line 45, at end insert—

‘(e) unremunerated work that is comparable to employment.’.

Ann Winterton (Conservative, Congleton)

With this it will be convenient to discuss new clause 19—Volunteers—

‘For the avoidance of doubt, with the exclusion of matters related to remuneration, all rights of employees under this Act are deemed to extend to persons who work as volunteers without remuneration; and all duties of employees and their employers to avoid discrimination are deemed to extend to volunteers working without remuneration.’.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

The amendment is probing to establish to what extent volunteers have the same protection from discrimination as employees, and I hope that they have the same protections. Obviously, the discrimination could not be between paid and non-paid workers, but volunteers often have expenses, such as those for travel and lunch. I am sure that there should be no discrimination between someone with a disability, an ethnic minority person or a woman getting differential expenses, but I would like that matter clarified, because it is unclear to me whether volunteers will be protected from discrimination. I am not sure whether the service or the type of employment will be protected by part 3 when providing goods and services, but it is clear that those who offer their services for free should not be discriminated against, and I would be grateful if the Government clarified that.

Mark Harper (Conservative, Forest of Dean)

I rise to speak to amendment 243 and new clause 19, which was tabled by my hon. Friend the Member for Daventry, who, owing to his service on the Council of Europe, is unable to be in Committee today.

As the hon. Member for Hornsey and Wood Green said, the amendment probes, as does the new clause, the extent to which volunteers will be covered. If organisations rely heavily on volunteers and if all the rules in the work section apply to volunteers, we want to ensure that, given the nature of volunteering—the length of the relationship and what is invested in it—we do not make organisations less likely to want to use volunteers. In particular, as we discussed in the previous debate, the route back to work for some disabled people will involve going straight from benefits to working in a full-time job, but the route for others will perhaps involve taking up a volunteering opportunity, then a part-time opportunity and then full-time work. For many people, that is a successful route back into work.

The amendment and new clause test what applies to employers. Not only do we want employers not to discriminate, but we want them to use the disability provisions. We want them to be able to favour disabled people not just as employees but as volunteers, to provide opportunities that will help not just the disabled people but our overall goal of getting more of them back into work.

The amendment and new clause are designed to check the extent to which this part of the Bill applies to those who are volunteering their services to organisations. Will it apply to volunteering in general, or will it capture other types of volunteering, such as volunteering that is akin to working, albeit without pay?

Vera Baird (Labour, Redcar)

The amendment and the new clause are about whether we extend the protection from discrimination, victimisation and harassment to volunteers. We recognise the contribution of volunteering and believe that volunteers should be treated with respect and care, but we do not legislate for volunteers in exactly the same way as employees in the Bill.

First, there is no clear evidence of systematic discrimination. The majority of volunteers appear to be well managed. We have looked at the legal rights of volunteers on a number of occasions—most recently exploring them in 2004, when a private Member’s Bill was promoted by the hon. Member for Canterbury (Mr. Brazier). Research from 2007 shows no suggestion of such discrimination, although there may be some dissatisfaction in how voluntary placements are organised.

Secondly, there is some protection. Volunteers are currently protected from discrimination, victimisation and harassment in respect of the provision of goods, facilities and services to the public. As recipients of services—for instance, from an agency that arranges placements—there would be protection, which has been extended to cover age. Such discrimination might be highly relevant. Changing the laws proposed would provide a remedy in an employment tribunal instead of a county court, but there is a remedy already. Where the relationship between a charity or organisation and an individual amounts to employment, there is protection under the employment provisions.

A practical difficulty in extending discrimination legislation across the board is that volunteering can vary from regular daily routines in the shop to driving someone to hospital from time to time. There is a wide range of volunteering. In some cases, the organisation for which the volunteer works may do little more than put a volunteer in touch with someone who they may be able to help and then simply check up to see that all is going well. There would be difficulties in drawing the line, and there could be a chilling effect on the number of volunteers if legislative burdens were imposed on such a diverse sector. However, no one would wish that volunteers, who offer their time for free, should be treated unfairly, and the Government are committed to ensuring that that does not happen by continuing to monitor the situation and to provide support and guidance.

Lynne Featherstone (Liberal Democrat, Hornsey and Wood Green)

I thank the Minister for her explanation, which lays out the parameters exactly. I beg to ask leave to withdraw the amendment.

Schedule 9

John Mason (Scottish National Party, Glasgow East)

I beg to move amendment 44, in schedule 9, page 181, line 33, leave out ‘proportionate’.

Ann Winterton (Conservative, Congleton)

With this it will be convenient to discuss the following: amendment 45, in schedule 9, page 181, line 37, leave out ‘proportionate’.

John Mason (Scottish National Party, Glasgow East)

I take it that that was an indication that we should not spend too long on the schedule and that I might not have as many interventions as I was anticipating.

Amendments 44 and 45 would take out the new test of proportionality that has been added to the sexual conduct exceptions for religious bodies. The test does not appear in paragraph 7(3) of the Employment Equality (Religion or Belief) Regulations 2003, which contains the previous incarnation of the exception. I might as well just throw in at this point that I do not speak on behalf of my party on this issue.

There is no reason for the Government to depart from the wording that was agreed with religious groups in 2003, which has been on the statute book for six years. Has there been a single employment tribunal case in which a Church has successfully relied on the exemptions given in 2003? Did any such cases involve discrimination that the Government believe to be disproportionate and worthy of being outlawed? I would be grateful if the Minister could answer those questions.

I have some notes from the Church of England, which gave evidence to us. It is probably not the most radical of the religious groups that we meet day to day. One paragraph of its notes states:

“It seems to us that this risks involving the courts and tribunals in having to address questions as to the precise nature and extent of particular religious doctrines, or as to precisely how strongly particular religious convictions were held. It would also mean that having done that, the courts would have to go on to determine what the effect of those doctrines or strongly held beliefs was in terms of the details of the requirements that needed to be applied in order to comply with them. This is exactly the territory into which the courts are both reluctant and ill-equipped to venture.”

Amendment 43 would remove the new definition of organised religion in paragraph 2(8) of schedule 9. The new definition, which, again, was not present in the wording agreed with the Churches in 2003, states:

“Employment is for the purposes of an organised religion only if the employment wholly or mainly involves...(a) leading or assisting in the observation of liturgical or ritualistic practices of the religion, or...(b) promoting or explaining the doctrine of the religion (whether to followers of the religion or to others).”

As the Minister said last Tuesday, any lawyer knows that as soon as we list anything, we narrow it. By listing what is regarded as organised religion, the Government are narrowing the exemption.

Vera Baird (Labour, Redcar)

That is not what I said at all. I said that by putting a list in, we could, by implication, leave out things that people might have thought to be covered by the legislation. That is not necessarily narrowing the legislation. I hope that that is clear; if it is not, I will say it again in a different way. I made no such assertion.

John Mason (Scottish National Party, Glasgow East)

I can respond by basically agreeing with the Minister. However, the fear is that the measure leaves out—we might not want to say that this is “narrowing”—things that might otherwise be expected to be included. That is my point, and I think it is valid.

In Reaney v. the Diocese of Hereford, Stonewall financed a legal action by a homosexual man against the Church of England over his application to become a diocesan youth worker. The judgment seemed peculiar and fudged the issues. Mr. Reaney won on the particular facts of the case, but the employment tribunal rejected the argument that the exemption applied only to Church ministers, and ruled that Churches could also require a youth worker to adhere to their doctrines on marriage and celibacy. However, explanatory note 747 on page E182 insists that the new wording in paragraph 2 excludes youth workers. In that case, the new wording is intended to narrow the exception.

The Government—intentionally or unintentionally—have got religious groups very worried indeed. Both the Church of England and the Roman Catholic Church gave evidence saying that they believed that the Bill weakened protections that were designed to protect their fundamental human right to manifest their religion.

Let me make some comparisons that might help the Committee to understand better where the Churches are coming from. If a Greenpeace employee was found to be participating in the arms trade, surely he or she would be asked to leave, because anything else would deny a basic tenet of the organisation and expose it to ridicule. If the world knew that Greenpeace employed such a person, people would cease to support it. Similarly, if a political party researcher began campaigning for another party, surely that person would not keep their job. To allow someone so at odds with the party to remain in a position of influence would be a breach of the original party’s freedom of association.

There is something fundamental about working for an organisation with a strong ethos. This could apply to any of the protected characteristics, whether it is age, disability, LGBT status or anything else. There is an expectation that all staff should be signed up to and enthusiastic about an organisation’s direction. That affects the mood when staff come to work in the morning, how they chat in the staff room and so on. I am an accountant, but I have worked for nursing homes and housing associations. One would expect everyone in a nursing home, including the accountant, to be signed up to nursing and the welfare of the residents. Similarly, in housing, one expects everyone to be signed up to quality housing and the good of the tenants. In the same way, the Churches should not have to employ people who, through their lifestyle, repudiate important beliefs that the organisation exists to promote.

Amendments 42, 46 and 47 would widen the scope of the religious exemptions. In the Reaney case that I mentioned, the Diocese of Hereford was ordered to pay £47,000 for refusing to appoint to a diocesan youth worker position a man who had only recently ended a homosexual relationship and who said that he might enter into another such relationship in future. Everyone can see the difficulty in which that places the Church. The case shows that the existing exceptions are not sufficiently robust. My amendments demonstrate different ways of wording the exemptions to provide better protection for religious freedom of association.

Amendment 42 takes the religious ethos test from paragraph 3, which is a broader exception, and places it into the definition of organised religion. A body would have to prove only that the employment was for the purposes of an organisation with a religious ethos. The test is acceptable to the Government in relation to religious discrimination, so why not in relation to other grounds? The approach would make it easier for religious bodies to prove that a particular post fell within the sexual conduct exception.

Amendments 46 and 47 take the list of activities exempted by paragraph 2 of schedule 9 and place them within the framework of paragraph 3. Again, paragraph 3 protects a broader range of posts. That is by far the neatest and most effective way of providing protection to religious bodies that want to maintain their beliefs in their employment policies. Some will say that both my approaches are too wide and would benefit organisations and jobs that they do not think should be covered, but we must be careful about telling religious organisations which posts are important to their religion and which are not. If they can pass the religious ethos test, we must leave it up to them.

I note that the Conservatives have tabled amendment 189, which would make the definition of organised religion marginally wider by tinkering with the “wholly or mainly” test. Their amendment highlights the arbitrary nature of the organised religion test. A youth worker who spends 49 per cent. of his time teaching doctrine is none the less not in a protected post, but if he spends 51 per cent. of his time teaching, he is, so a Church may be told by the state to employ as a teacher of their religion someone who rejects its teachings all for the sake of 2 per cent. of the worker’s time. The arrangement seems too arbitrary and uncertain.

There are too many hoops in the exceptions for Churches to jump through, even though they are designed to protect Churches’ fundamental human rights. I hope that the Government will think again about some of the issues.

Mark Harper (Conservative, Forest of Dean)

The hon. Gentleman lays out a good case for a number of his amendments. As he mentioned, we tabled amendment 149, which would leave out the words “wholly or” from the measure. We chose it predominantly as a probing amendment to enable us to have this discussion, although he has tabled more substantive amendments. We have had discussions on this topic before, as Committee members will remember, and I want to test the Minister on two issues: what the Government’s intentions are, and whether the Bill implements them correctly. I then want to discuss whether the Bill deals with the issue adequately, although I shall do so only briefly because the hon. Gentleman addressed that satisfactorily.

Several hon. Members and I have held a number of discussions with some of the Church organisations and two issues have arisen. The hon. Gentleman has already alluded to the first, which is the narrowing of the definition of an organised religion under paragraph 2(8)(a) and (b). At the moment, the Government’s position in the Employment Equality (Sexual Orientation) Regulations 2003 does not attempt to define it at such a level. The then Minister of State, Lord Sainsbury of Turville, said in response to the debate on the 2003 regulations in the House of Lords:

“When drafting Regulation 7(3), we had in mind a very narrow range of employment: ministers of religion, plus a small number of posts outside the clergy, including those who exist to promote and represent religion.”—[Official Report, House of Lords, 17 June 2003; Vol. 649, c. 779.]

When we had such a discussion previously, there was no disagreement about those who are in a post of clergy where they are taking religious services. The issue was the width of the scope of paragraph 2(8)(b), which concerns

“promoting or explaining the doctrine of the religion...to others”.

We have had some discussion around whether it would cover those who, for example, were involved in promoting a religious organisation to the outside world and representing its case, for whom it would be significant that their public utterances about the things that were important to that religion or Church, and their behaviour, would be in line with the views of the Church. It clearly would not be convincing if they said one thing and did another.

Many Church groups think that the wording of the provision represents a narrowing that will rule out a number of the posts that are currently allowed under the 2003 regulations, which the Bill is effectively supposed to be carrying across. It would be helpful if the Minister could tell us about the translation of those regulations into the Bill, and say what was intended, so that we can see whether that has been the effect. Will she also set out what posts the Government think should be covered?

One of the things that has confused the situation is the explanatory notes, which talk specifically about a “church youth worker”. We have discussed whether the nature of the role of a church youth worker could be determined as

“promoting or explaining the doctrine of the religion...to others”

as under paragraph 2(8)(b). We have also considered whether that type of post should be included, and we will welcome the Minister’s comments about that.

The second area, which the hon. Member for Glasgow, East touched on, is the proportionality test. A number of Churches and religious organisations think that that represents a further narrowing. It concerns the condition in sub-paragraphs (5) and (6) that when the “compliance principle” or the “non-conflict principle” are engaged, both must be applied only if doing so is a proportionate means of complying with the doctrine of the religion. That proportionality test is not present in the 2003 regulations. The Churches are concerned not because they want to act disproportionately, but because putting that in means that courts and tribunals will have to be involved in addressing questions about the nature and extent of particular religious doctrines and the way in which they work.

I raise that because when regulation 7(3) of the 2003 regulations was drafted, it seemed that the Government’s policy was deliberately not to impose a proportionality test. In the case of R (Amicus) v.Secretary of State for Trade and Industry in 2004, the witness statement filed on behalf of the Secretary of State explained:

“Regulation 7(2) simply sets out criteria of general application and leaves it to the courts and tribunals to determine in individual cases if those criteria are met. This was not done in relation to employment for purposes of an organised religion in regulation 7(3), because the Government was concerned it would lead to litigation in tribunals about the extent to which requirements dictated by doctrine or the religious convictions of followers could legitimately limit working for an organised religion, and to what extent those requirements, and by extension, the doctrine or convictions giving rise to them, could be said to be reasonable or proportionate. The Government was engaged in striking a delicate balance”—

the Committee acknowledges that it is a balance—

“between the employment rights of gay and lesbian people, and the right of religious groups to freedom of religion. The Government took the view that it is not appropriate for courts or tribunals to make such judgments, and that the balance should be identified in the Regulations themselves.”

It would be helpful if the Minister commented on the judgment at that time, why the Government in effect have introduced the proportionality test and whether they recognise that it carries that risk—that it opens up to courts and tribunals the test of having to make judgments about individual religions. The hon. Member for Glasgow, East made a very good point when he said that those judgments are best left to the religions themselves, rather than being taken outside the religion and given to the industrial tribunal or the court.

Those are the two issues on which I wanted to probe the Minister and invite her to set them out clearly for the Committee, so that we can see whether the Bill does what the Government’s stated intentions are.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I have an amendment in this group, which I shall speak to briefly. I shall also comment briefly on the issues that have just been raised. I set out my views under an earlier clause. I thought that it was appropriate to do that because it is such a critical issue and I did not think that it was best dealt with by being hooked on to a probing amendment on “wholly or mainly” in the schedule. However, the hon. Member for Forest of Dean has brought the issues forward quite well.

My amendment 250 is a probing amendment to enable me to ask a specific question. Why does the Minister not consider it appropriate to provide a different test before religious organisations with a religious ethos are allowed to discriminate against their employees based on religion or belief when they are delivering a public service, compared with all other circumstances? I recognise and my party recognises that it is necessary to have the sort of exemption that we see in paragraph 3 of schedule 9 for religious organisations, but the balance is wrong when we come to the delivery of a public service, because there may be individuals delivering a public service and then the tender, the contract, for the service that they are providing is handed over to an organisation with a religious ethos. What protection do people who have never applied to work for that organisation, but find themselves taken over, as it were, by it, have against a religion test being applied to them when they are, yes, working for an organisation with a religious ethos, but doing a job that could equally well be done by a secular organisation, such as providing accommodation, care, homelessness provision or a number of other public services? They might even be doing the very important and obvious public function of arranging adoptions for children. I do not think that there can be more of a public function than that. If they were taken over, the concern would be, no matter how good they were at their job, that an occupational requirement would be made out.

I am asking whether the test needs to be higher when we are talking about public services. Otherwise, if more faith-based organisations deliver public services—it would be discriminatory to prevent them from delivering public services—individuals seeking to work in that field might have a far smaller range of choices as to what jobs they can do and what employers they can work for if they are not religious or are of a minority religion or are not of the religion of the organisation delivering the public service. I hope that the Minister recognises that I accept the need for an exemption, but that there is a question in respect of the delivery of public services. I should be grateful if she would comment on that.

I turn to the issues raised by amendment 44, moved by the hon. Member for Glasgow, East. I shall leave the Minister to deal with the question of why “proportionate” was included. I argued previously that the directive requires tribunals and courts to have regard to proportionality when interpreting our legislation. I have said previously that the closer our legislation gets to the wording of the directive, the less room for doubt there will be.

Other than the caveat that I raised on paragraph 3, I pretty much support the wording of the schedule, which is why I did not table any significant amendments. They would have been needed if we were to have had the sort of debate that we had earlier. I hope that the Government will be robust not only on the reason for including “proportionate” but also on the question of why we need paragraph 2(8). As we said earlier, it exists to implement the Amicus judgment, which in turn makes it clear that our legislation is compliant with the directive. The Minister reassured me on that earlier; I hope that she will now reassure the hon. Member for Forest of Dean. Whether or not it is a narrowing of the terms of our legislation, it is not a narrowing of the law, because the law is what is allowed by the directive, as interpreted by the court case. The Amicus judgment was clear and welcome in that respect.

The hon. Member for Glasgow, East referred to the Reaney case. I ask the Minister to correct me if I am wrong, but I believe that it did not set a precedent as it was a first instance tribunal. What I say is based on what I have heard, but I believe that neither side was particularly happy with the judgment. Although the claimant won, I happen to think that it was unsatisfactory that the job described was one for which a wider exemption might have applied. Mr. Reaney won on the basis that he said that he was celibate at the time, or not practising, and that it was unfair, unreasonable and discriminatory to require him to give a commitment that would not have been asked of a heterosexual. However, I do not believe that it was a good judgment; I wish that it had been appealed—and successfully so—but both sides decided to cut their losses.

The example given in the explanatory notes refers to a church youth worker. Reaney was a diocesan youth worker, but the tribunal felt that there was more of a representative role in that case. It is worth reading the Reaney judgment. Given the job description and the CV of the person concerned, it was clear that he was a good youth worker. He happened also to be a Christian, but he was a good youth worker and the appointment committee said that he was streets ahead of all the other applicants—even knowing his sexual orientation and the fact that he had had a homosexual relationship in a previous job.

For positions like that, it does not seem right that the wider exemption should apply. Youth workers working for religious organisations throughout the country should not have to quake in their shoes and worry that they are liable to be sacked if their sexual orientation comes to light should they meet someone, fall in love and want to have the same relationship with that person as heterosexuals would have—even though they are homosexual, and even though they are doing a good job.

John Mason (Scottish National Party, Glasgow East)

The hon. Gentleman said that the youth worker “happened also to be a Christian”. A lot may hinge on that. For someone with a humanist or secular background, being a Christian is peripheral and only a small part of life. The problem is that for religious organisations, including churches, being a Christian—or a being Muslim or a member of any other religion—is absolutely central. It is not something that happens to be added on; it is central.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I apologise if I said “happen to be”; I did not think that I had. I accept that the requirement for that post was that the person should be a Christian. Clearly, such a religious requirement would apply under paragraph (3). There is no doubt that it is an organisation with an ethos, and one could argue that it is an occupational requirement. I have no problem about that advertisement saying “Christians only”. I hope that I have clarified that, and I am not seeking to make the point that it was not a genuine requirement, and therefore central. I am saying that it is possible to be Christian and gay. To discriminate against someone—we have heard this before—on the basis of their sexual orientation by saying that they are somehow outwith the doctrines of the religion and therefore fail a religious test is not satisfactory. The Minister assured me, although this gives me a chance to clarify the matter further, in answer to the point when I tabled a probing amendment, that there was some provision in the Bill that made it clear—it may be that it is just obvious—that if someone was discriminated against on the grounds of their sexual orientation or a manifestation of that where it is so closely connected that it is their sexual orientation, by definition, it could not be a religious criteria; it would be sexual orientation discrimination. If she could repeat that—she said it was something to do with schedule 23, but I cannot find it—I would be grateful. That is all I am going to say about the point made by the hon. Member for Glasgow, East, because we have thrashed out that argument on a number of occasions.

The only other point to make in respect of paragraph 2(8) is what will happen to church organists. It is the save-the-organist point that I want to make. It was raised earlier by people who have an interest in it. Curiously, it looks like—as they put it, for I do not think it is curious at all—youth workers will not be caught by the exemption. I am pleased that they will not, if that is the case generally speaking, unless the advertisement is written much more clearly in terms of promoting the doctrine of the religion than most youth worker jobs are. The issue is also whether it would actually catch the organist, because their work

“wholly or mainly involves

(a) leading or assisting in the observation of...ritualistic practices of the religion”.

It would be unfortunate if the wording was designed to capture people where the main part of their job was to play a musical instrument well, albeit with religious music.

Mark Harper (Conservative, Forest of Dean)

What the hon. Gentleman is saying perhaps illustrates the point that I was trying to make. Trying to be too specific on the face of the Bill about the nature of the roles leads to such situations, where one would include the church organists, where actually, I would argue, what they do is not very important. We would then not capture someone who was involved, such as a youth worker with a significant amount of teaching. It would be better if the specific nature of the test was not there. In the definition, we would just leave organised religion in there, and it would be determined by the court or tribunal if it was an occupational requirement.

The rest of the debate is in Hansard.