Will the Equality Bill help reduce the gender pay gap?

Figures from the Office for National Statistics published in November last year revealed that the gender pay gap across the UK has risen from 17 per cent in April 2007 to 17.1 per cent in April 2008.

More recent research into women in the financial sector suggested that there was a pay gap of almost 60 per cent in some areas, like futures trading and stock broking.

The study, carried out by the Equality and Human Rights Commission earlier this year, also found that in the financial sector as a whole, full-time female workers were found to be earning almost 55 per cent less annually than their male counterparts.

Trevor Phillips, chair of the commission, said that the findings were "shocking and indicate just how serious the pay gap has become in the financial sector, with women concentrated in lower paid, lower skilled roles and few able to make it to the top".

He added: "We are … calling on the government to take significant steps towards addressing gender pay gaps in the upcoming Equality Bill."

The Equality Bill was published towards the end of last month and contained several proposals to reduce pay differences between genders. One of the plans included in the bill was to introduce equal pay audits in organisations to improve transparency.

Launching the bill, women's minister Harriet Harman said: "Today we publish our tough new Equality Bill … building on our actions over the last ten years.

"It will make Britain a more equal place, and help us build a stronger economy and fairer society for the future. We will shine the spotlight in every workplace on the hidden pay discrimination against women."

The proposals have been welcomed by unions who say that they will help tackle discrimination by making legislation easier to understand.

Brendan Barber, general secretary of the Trades Union Congress, said: "Bringing together the dozens of acts accumulated over the last 40 years into a single Equality Act will make it easier for individuals and employers to understand the law.

"But this Bill is more than just a cleaning up exercise. It strengthens the law and gives important new protections."

However, there have been opponents to the bill, including the Chartered Institute of Personnel and Development (CIPD). The professional organisation claims that introducing pay reports will have no effect on reducing differences in salaries.

Charles Cotton, the CIPD's reward adviser, explained that the gender pay gap is a "complex" problem that cannot be solved overnight and pay audits would do nothing to improve the issue.

"Choices made at school, choices of what qualifications to pursue, careers advice and cultural norms have a far greater impact in pushing men and women down different career paths than discrimination in the workplace," he added.

"And there are basic realities about career and life paths that mean the actual, like-for-like pay gap is not as great as some of the sensationalist headline figures suggest."

The government has now requested the Equality and Human Rights Commission to carry out a consultation with the private sector in order to develop a system of pay reports.

Business groups like the Confederation of British Industry will be involved in the process, with initial proposals to be published later this summer. A final report containing the measures for equal pay audits will be released in 2012-13.

"Through this consultation with businesses and other stakeholders, we believe we can agree ways of reporting that companies feel are practical and not onerous," said Mr Phillips.

"As well as showing the headline figures, it will be important to find ways of revealing the complex underlying causes of pay gaps. This will help businesses to take appropriate measures to find solutions that narrow the pay gap within their own organisation."

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