Force smaller firms to reveal the gender pay gap too, say MPs

CONTROVERSIAL gender pay audits should be extended to all firms with more than 50 staff, MPs will say today.

New laws forced all organisations with at least 250 staff to report on their pay structures this year.

But the Commons business committee today urges ministers to go further – saying the audit revealed ‘obscene’ gaps of more than 40 per cent at some organisations.

It said almost four out of five large firms have gender pay gaps in favour of men.

Rachel Reeves, the committee’s Labour chairman, said the biggest gender pay gaps were ‘obscene and entirely unacceptable’.

She said transparency about pay should be extended to smaller firms, and further action to close the gap was needed.

‘The gender pay gap must be closed, not only in the interests of fairness and promoting diversity ... but also to improve the country’s economic performance and end a monstrous injustice,’ she will say.

But critics have warned the audit is meaningless, as it takes no account of the fact men and women may be doing different jobs – and said extending it would place an unfair financial burden for small firms.

Ryanair, which reported a 72 per cent pay gap, said the differential was explained in part by the fact it employs few female pilots but many female cabin crew. Kate Andrews, of the Institute of Economic Affairs think tank, said extending the audits ‘will not help women’.

She described the committee’s report as an ‘exercise in virtue-signalling’ that could even damage the job prospects of women starting out in their careers.

‘Rather than making comparisons with like-for-like roles, the [audits] instead measure pay across organisations altogether, irrespective of different roles, age, or hours worked,’ she said

‘Extending these requirements will result in more bogus statistics.

‘This proposal will also create extra cost for small companies who do not have the resources or the capacity to deal with yet another bureaucratic burden.’

Today’s report also calls for firms to publish annual progress reports, including action plans for tackling any wage gaps.

The Government Equalities Office said it was publishing new guidance for companies to help them improve the recruitment and progression of women and close their gender pay gap.

MPs said only half of the UK’s workforce is expected to be covered by the present reporting requirements. The report concludes: ‘The new reporting regime is a step forward, but its full potential has not yet been realised. We are calling for the Government to be more ambitious.’