PM to shame big firms over women’s pay

COMPANIES will be forced to reveal the gap between the average pay of male and female staff, David cameron will announce today.

Firms employing more than 250 will have to publish the information as part of the prime Minister’s ambition to end the ‘gender pay gap’ within a generation.

he will say the move is needed to drive up women’s wages and ‘cast sunlight’ on discrepancies in the salaries of men and women. he hopes that forcing employers to publish the gap would put pressure on them to deliver equal pay.

More than 10million workers will be covered by the rules. at present the gender pay gap stands at 19.1 per cent – meaning a woman, on average, earns around 80p for every £1 earned by a man.

The plan is being introduced despite concerns that it will pile huge burdens on struggling companies. Business leaders said firms should not be forced to publish the information, which they described as inherently ‘misleading’.

To try to accommodate these concerns, ministers will not decide on exactly how each company’s pay gap will be calculated until after a detailed consultation with business. The rules should come into force by the end of 2016.

Mr cameron revealed that, for the first time, FTSE 100 companies have met the target for 25 per cent of board members to be women.

Writing in The Times, he said: ‘Today I’m announcing a really big move: We will make every single company with 250 employees or more publish the gap between average female earnings and average male earnings.

‘That will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.

‘higher pay is something we want for everyone. That is why the chancellor announced the national living Wage, which starts next april at £7.20 and will reach over £9 by 2020. This will primarily help women, who tend to be in lower paid jobs.

‘It will help close the gender pay gap. But we need to go further, and that’s why introducing gender pay audits is so important.’

The move represents a change of heart by the Tories, who over the years of the coalition con- sistently refused to implement the measure despite pressure from the liberal Democrats.

last night len Shackleton, research fellow at the Institute of economic affairs, said: ‘The current Government shows no more understanding of the gender pay gap than its predecessors. The gap is not caused primarily, if at all, by discrimination – but largely by career choices and family decisions.

‘The reality is that the meas- ures announced by the Government will do little to reduce the gender pay gap – and in the case of the national living Wage, may actually cause higher unemployment among women. They will however add to the burdens imposed on firms by this allegedly pro-business government.’

lord heseltine, the former Tory deputy prime minister, has also previously said he opposed the law, saying it would create ‘more bureaucracy, more forms, more deterrent for companies not to take on people.’

The PM will today announce a consultation with business leaders on the details. Businesses are concerned that some ways of publishing the measure could be skewed by, for example, very high salaries of some staff.

The consultation will consider how the gender pay gap regulations will be designed, including what, where and when the information will be published.

Katja hall, deputy director general of the confederation of British Industry, said pay gap figures can be misleading – and said the Government should continue encouraging firms to publish the data without forcing them to.

James Sproule, director of policy at the Institute of Directors, said: ‘We share the Government’s aim to get rid of the gender pay gap, no employer can justify paying men more than women for the same work. But we have concerns that making companies publish average pay differences could produce misleading information.

‘Measuring pay gaps is very complex, and averages do not show whether companies are paying people different amounts for the same work. The longterm solution is to get more women into senior executive positions.’

Kate andrews, from the adam Smith Institute, said: ‘There is no such thing as an “average salary”. education, previous experiences, negotiating tactics and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual takehome pay on a spreadsheet.’

‘Add to burden on business’

‘ This will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up David Cameron