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Further action needed to close gender pay gap, MPs warn

Wage differences of more than 40% are not uncommon in some sectors of the economy, a report found.

The Government is being urged to take fresh action to close the gender pay gap after an inquiry found evidence of “obscene” wage differences of more than 40%.

A committee of MPs said almost four out of five organisations have gender pay gaps in favour of men.

The Business, Energy and Industrial Strategy Committee took evidence from a number of companies and campaign groups during its inquiry, and discovered that the UK has one of the highest gender pay gaps in Europe.

Median pay across the economy is 18% in favour of men, but differences of more than 40% are not uncommon, while almost one in eight employers have gaps of more than 30%, the MPs said.

A persistent gender pay gap shows that companies are failing to harness fully the talents of half the population Rachel Reeves MP

The recent move to require firms to publish gender pay details had “shone a spotlight” on the issue and helped women raise any disparities, said the committee.

It recommended increasing the number of organisations required to publish pay gap data to those with 50 employees, compared with the current 250.

The MPs also called for firms to publish annual progress reports, including action plans for tackling any wage gaps.

Rachel Reeves, who chairs the committee, said the biggest gender pay gaps were “obscene and entirely unacceptable”.

The Leeds West Labour MP said: “Transparency on gender pay can only be the first step. The gender pay gap must be closed, not only in the interests of fairness and promoting diversity at the highest levels of our business community, but also to improve the country’s economic performance and end a monstrous injustice.

“A persistent gender pay gap shows that companies are failing to harness fully the talents of half the population. The penalties of working part-time, both financial and in terms of career progression, are a major cause.

“Companies need to take a lead. For example, why aren’t they offering flexible working at senior levels? They must look at why they have a pay gap, and then determine the right initiatives, policies and practices to close it.

“The Prime Minister spoke about the gender pay gap as a ‘burning injustice’ and of closing the gap for good within a generation. It’s now time for the Government and businesses to deliver on that ambition.”

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Women and Equalities Minister Penny Mordaunt said it is appalling that, in the 21st century, there is still a big difference between the average earnings of men and women (Yui Mok/PA)

The MPs said only half of the UK’s workforce is expected to be covered by the present reporting requirements.

The report concluded: “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.”

The Government said the UK is one of the few countries in the world to require employers to publish comprehensive gender pay gap data.

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.

Minister for Women and Equalities Penny Mordaunt said: “It is appalling that, in the 21st century, there is still a big difference between the average earnings of men and women.

“While I am encouraged that over 10,000 employers have published their data, these figures set out in real terms for the first time some of the challenges and the scale of this issue.

“We need to take action to ensure businesses know how they can make best use of their best talent and make their gender pay gaps a thing of the past.”

We have to move on from simply reporting the pay gap, to taking action to close it Fawcett Society chief executive Sam Smethers

Sam Smethers, chief executive of women’s rights group the Fawcett Society, said: “We have to move on from simply reporting the pay gap, to taking action to close it.”

Matthew Percival of the CBI said: “Companies with a diverse workforce and leadership perform better than those without.

“The gender pay gap is a societal challenge with a complex mix of causes.

“Businesses need to work in partnership with the Government on improving careers advice in schools and offering affordable childcare for working parents.”

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