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City firms must reveal pay rates in war on 42% gender gap
Paul Waugh, Deputy Political Editor27 Jun 2008
Ministers declared war on " sexism in the City" today as research showed men in the financial sector are paid an average of 42 per cent more than their female colleagues.
London's financial industry will be forced to expose the gender pay gap as part of sweeping changes included in a new equality Bill.
Under the plans unveiled by women's minister Harriet Harman:
• Firms will no longer be allowed to impose "gagging clauses" preventing employees revealing their salaries.
• All companies given public sector contracts will have to publish the pay rates of men and women.
• The City will face a full-scale investigation into sexist differences in pay rates by the Equality and Human Rights Commission.
• Square Mile and Canary Wharf firms will have to voluntarily publish total bonuses for the two sexes - or face new Companies Act powers to compel them to do so.
The Bill, due in the autumn, is seen by Gordon Brown as a valuable part of his two-year fightback against the Tories. By including new rights for the elderly to fair NHS treatment with the commitment to women, it is seen as key to persuading voters the Prime Minister is prepared to be radical.
The Bill will let employers discriminate in favour of ethnic minorities when two job candidates are of equal ability. It replaces nine major pieces of legislation and around 100 other measures, from the 1970 Equal Pay Act to the 2005 Disability Discrimination Act.
Research published today shows women in financial services are paid 41.5 per cent less than men on average. The national gender pay gap is 12.6 per cent. Unequal pay has been illegal for more than 30 years but in London men earn on average 24 per cent more than women.
Ms Harman told the Standard it was "time to end the British culture of not wanting to talk about pay". She said the financial services industry was one of the worst offenders, adding: "Pay isn't a private issue any longer, it's a social justice issue and a public policy issue."
She told MPs today: "Just as every school has to publish their exam result so parents can see, and every hospital has to publish its waiting lists so patients can see, I want employers to report on key equality matters like gender pay."
Tory MP Graham Brady asked whether it would be legal for a firm to discriminate against an equally qualified black man in favour of a white woman. Ms Harman refused to answer. Business groups said they were "very strongly against" compulsory pay audits. Katja Hall, of the CBI, said: "They are very expensive and very time-consuming. Pay gaps are not the result of discrimination - they are because many women would prefer to work in the HR department than the finance department, or that they prefer part-time work."
Reader views (3)
The key here is "tie-break" which implies that all the qualifications and ability criteria have been met equally by all the relevant candidates, if this happens then the employer can choose to do a little bit of positive discrimination.
The fact that such encouragement has to come from the government implies that if there is a situation where there are two candidates of equal worth but are of different ethnicities or sex then it will still remain business as normal.
- Pat Sullivan, United Kingdom, 01/07/2008 02:06
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Disgraceful. Any legislation that discriminates against white men. I'm never voting Labour again.
- John, Manchester, 26/06/2008 22:38
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Many of the things in this new Bill are good, but one area is not.
The Bill states that if two candidates for a job are 'equally qualified', then a business has the right to choose the ethnic minority or female candidate purely on the basis of ethnicity or gender.
This does not apply to white candidates or male candidates.
This is ridiculous- there will never be two candidates with exactly the same qualifications and abilities.
If a 'tie-breaker' is required between two candidates, it should be ability-based, not gender or ethnicity based.
Positive discrimination is a contradiction in terms.
- Robert Cunningham, Harrow, London, UK, 26/06/2008 12:26
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