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Nicky Morgan voices concerns about 'unacceptable' gender bonus pay gap

Published 25/10/2015

Men earn, on average, around 19.1% more than women
Men earn, on average, around 19.1% more than women

It is "unacceptable" for women to find their male colleagues have been paid more in bonuses, Nicky Morgan has said.

The Government has announced firms will be forced to include bonus payments when they publish details of the pay gap between men and women employees.

The Education Secretary and Minister for Women and Equalities said having unequal pay for the same job was outlawed 40 years ago, but there was still a 19% gap between the average of men's pay and women's pay.

She told BBC Radio 5 Live's Pienaar's Politics: "Today we're saying we've been consulting on regulations to make companies with over 250 employees publish information about the average pay of male employees and female employees, we now want them to go further by including information about bonuses paid to male and female employees, we also want to extend that duty to the public sector, including I might add the BBC."

Asked if there was a suspicion that bonuses were paid in a "cronyist sort of way", she added: "Possibly, absoIutely, I think if you read any of the articles on this, you'll often find that actually when women ask the question about bonuses, they'll find that their male colleagues have been paid more in bonuses than they have, we think that is unacceptable."

She said the Prime Minister had been "very clear" that "we want to eliminate the gender pay gap in a generation".

Ms Morgan said reporting of such information "does concentrate minds".

She told BBC One's The Andrew Marr Show: "In terms of the reporting, I think it does concentrate minds when companies see the gender pay in their own company of their employees including bonuses. I think that does then change, start to change behaviours, it has the conversations in the company."

Ms Morgan said the Government also wanted to see women on all boards of FTSE 350 companies - after a target of getting women into at least a quarter of boardroom seats in FTSE 100 firms was met.

Lord Davies - who set that target as part of a government-commissioned review - is due to outline final recommendations.

She added: "Well this is about executive boards what we've seen, and I'd like to thank Lord Davies for his work because actually we've now got over 25% of all positions in FTSE 100 companies are held by women, but you're right obviously that, we've particularly made progress with non execs, it is now about execs, but it's also about building a pipeline.

"The thing about the gender pay gap is understanding why does it happen, often it's women aren't in high enough pay and careers, they don't get to stay in longer before they take time out, it's all those things, it's building that pipeline of talent."

Asked about the prospect of her running for party leader or prime minister, she said her three jobs were keeping her "pretty busy", but added: "Look I've been a member of the party for 26 years, it would be an extraordinary honour to be even considered to be leader."

She said it would be "great to have a woman in the leadership running when the time comes".

Parliament, she added, needed to be more diverse but she was not in favour of having specific quotas for female MPs.

Mr Cameron has come under pressure from the recently-formed Women's Equality Party (WEP) to translate commitments into concrete action to close a gap of £245 billion a year between the totals earned by each of the sexes.

WEP leader Sophie Walker said unaffordable childcare and employment inflexibility that meant only part-time work suited those looking after children and elderly parents "adds up not just to a gap in earnings but a gap in power".

Chartered Management Institute chief executive Ann Francke said: "One of the biggest drivers of gender pay discrepancy, especially at senior levels, is the bonus gap,

"Bonuses are also where gender bias can creep in easily as they are amongst the least transparent forms of pay."

The TUC said the transparency requirement should be put into force without delay, extended to medium-sized firms and backed up with fines for non-compliance.

It wants bosses to be forced to publish plans for closing the gap in their company's ranks.

General secretary Frances O'Grady said: "Publishing information on gender pay gaps in salaries and bonuses is a start. But it is just that, a start. Employers need to look at why women are still being paid less than men and do something meaningful about it."

CBI director for employment and skills Neil Carberry said: "Eradicating the gender pay gap is an important goal, but to be truly effective, gender pay gap reporting must be relevant to each company rather than a box-ticking exercise."

The Times reported that Lord Davies would set an ambitious new target of seeing a quarter of executive director positions at Britain's biggest companies filled by women by 2020 - and extend the board member target to 30%.

That is seen by campaigners as a "tipping point" beyond which female members are no longer seen as a minority presence.

Among the 100 biggest firms, only six have female chief executives and 15 of the next-biggest 250 have all-male boards.

Shadow minister for women and equalities Kate Green said: "Labour brought in the Equal Pay Act and legislated for mandatory pay audits and the minimum wage so we are pleased that the Government is finally taking some action on the UK's significant gender pay gap.

"The gender pay gap is still nearly 20% above the European average. Working mothers will bear 70% of the cuts in tax credits thanks to Tory policies, while the introduction of tribunal fees has led to a shocking reduction in the number of pregnancy and sex discrimination cases going to tribunal.

"British women don't need warm words - we need guaranteed rights at work, properly enforced. Just three weeks ago Tory MEPs voted against requiring companies to publish their gender pay audits.

"It's not enough to talk about equality, it must run through every piece of legislation."

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