MPs aren't impressed with the government's handling of the gender pay gap

A select committee report has been pretty scathing in its review of government policy to improve gender equality in the workplace.

by Rebecca Smith
Last Updated: 08 Apr 2016

While businesses often get a slap on the wrist for failing to do enough on the gender equality front, it’s also the responsibility of government. And according to a new report from the Women and Equalities Select Committee, it’s falling short. Apparently, the government's ‘complicit’ in a system which is undermining productivity and perpetuating the gender pay gap. Policy needs to change fast.

The pay gap – the difference between the hourly pay of the average man and the average woman and for full and part-time workers – stood at 19.2% in November 2015. It's a fairly blunt measure that's affected by many nuances. But despite assurances from the government that the pay gap would be eliminated within a generation, it has steadfastly remained around the same level for the past four years.

So what’s perpetuating it? Big factors include the part-time pay penalty and women’s disproportionate responsibility for childcare. The report says women aged over 40 are the most affected by the gap – women aged 50-59 are paid 27% less than men. In which case, where should government be focusing its attention to make effective changes in policy?

Supporting men and women to share childcare more equally is apparently one of the most effective policy levers in reducing the gap. The UK's current option of shared parental leave is unlikely to have much of an effect in its current form. The government’s own analysis predicted that only around 2-8% of fathers will access the entitlement and the level of paternity pay isn’t high enough to improve take up rates.

The Equality and Human Rights Commission has said paternity pay being lower than the UK average weekly wage and below the minimum wage is often too low to encourage parents to share their childcare roles more evenly 'because of the drop in pay most men will incur' (It's worth noting that's true of maternity pay too...). Changing that could change perceptions about who the responsibility for childcare should fall to, but who's going to pick up the bill? 

There have also been suggestions as to how companies can make further change in the boardroom. Virgin Money CEO Jayne-Anne Gadhia details some in her new report into women in finance for the Treasury. She thinks firms should link bonuses to their own internal targets to increase female representation in senior roles and publish annual reports on progress. Gadhia found ‘too few women get to the top and there is "permafrost" in the mid-tier where women do not progress’.

The MT Interview: 'Imagine a world where banks really had to fight for your business' - Jayne-Anne Gadhia

There’s certainly something to be said for quotas and targets, but implementing them in a short space of time can be cack-handed. And they don't always do much when it comes to improving the talent pipeline.

But quotas and paternity pay won't help overcome the fact that women are more concentrated in 'highly feminised' low-paid sectors such as care, retail and cleaning. Obviously some jobs will be lower-paid than others and it's not as if women shouldn't be working across these sectors - if they want to. But many are trapped in part-time, low-paid jobs which are below their skill level. 

That in itself should ring alarm bells for the government – the under-utilisation of women’s skills costs the UK economy up to 2% of GDP – around £36bn, according to the parliamentary report. More needs to be done on this front; opening up opportunities and supporting those who want to be working longer hours in positions more relevant to their skill sets.

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