Nicky Morgan – 2016 Speech on the Gender Pay Gap

Below is the text of the speech made by Nicky Morgan, the Secretary of State for Education, on 8 February 2016.

Thank you David for that very kind introduction and can I say on behalf of everyone, thank you Deloitte for hosting this event this evening. In particular Denis Woulfe, a member of the Women’s Business Council, who I know was instrumental in making this all possible. Thank you for everything you do on this agenda.

I’m delighted to be here during such an important time for gender equality. Around the world, business leaders, politicians and even Hollywood celebrities are talking about the gender pay gap (GPG).

I think you all have a copy of the report which is fantastic and I encourage you all to read it.

And the Prime Minister couldn’t have been clearer when he said at our Party Conference “You can’t have true opportunity without real equality”. And that’s why one of the first things he announced after the general election was a pledge to eliminate the gender pay gap in a generation.

This is not only the right thing to do but it’s also important for our country. The UK economy is dependent on us harnessing the talent of women, capitalising on the wealth of skill that they bring to our workplaces.

McKinsey estimate that the UK could add £0.6 trillion of additional annual GDP in 2025 by fully bridging the gender gap.

As Ann Francke, who you’re going to hear from shortly puts it so well in the report being launched today “What business leader in their right mind would turn away returns like this?”

The business case is clear, and that’s why I’m so pleased to see so many companies from so many different sectors here today – I know that by working together, we can achieve great things.

The Lord Davies Review is an excellent example of what we can achieve through partnership. Over the last five years, we have more than doubled the number of women on our FTSE 100 boards.

And importantly, we announced only yesterday that Sir Philip Hampton, the Chair of GlaxoSmithKline, will take forward a new review on women on boards which will specifically look at gender diversity and the executive pipeline.

Sir Philip is one of the world’s most influential business leaders and chair of one of the world’s most powerful companies. And when I spoke to him just last week, he told me what a huge privilege it was to work on this agenda.

We need more men to have that attitude. Women’s equality is important for everyone – for women, men, for business and for the next generation.

I don’t believe that it is only incumbent on women to speak out for women’s equality, and I don’t believe that it is for women alone to fight for this – we all have a responsibility. So I’m delighted to see such a diverse audience here tonight.

Sir Philip will be working alongside Dame Helen Alexander, chair of UBM, along with a steering group of inspirational business leaders from all walks of life. This work is crucial to tackling the gender pay gap and I look forward to working with Sir Philip as his review takes shape.

And we mustn’t forget that already Think, Act, Report has created a vast community of best practice on maximising female talent. Around 300 businesses are signed up, collectively employing over 2.5 million people. If you haven’t signed-up yet, I’d urge you to do so and benefit from the advice and support offered.

Together we can continue to drive change and dispel the myths that have often stalled progress.

One of the biggest myths – and often a source of confusion – is around what we even mean by the gender pay gap. Too many still conflate this with equal pay.

Now, the principle of equal pay was won in Dagenham over forty years ago (although that doesn’t mean it still doesn’t need to be enforced), whereas the gender pay gap is something far more complex – something we must all work together to crack – marking the average difference between men and women’s hourly earnings.

Progress

Sometimes we can be too hard on ourselves. We have made significant progress in recent years with the current gender pay gap being the lowest on record. We’ve virtually eliminated the gap for full-time workers under 40 and the gap for the over-40s is shrinking too.

We also have more women in work than ever before: one million more since 2010, women’s salaries are rising, and there are now around over one million women-led SME businesses – more than ever before.

But let me be clear, we cannot be complacent. I want to say something very simple: in our society, which places principles like fairness and opportunity at its heart – ANY gap is still too great.

I know that if we are to end the gender pay gap in a generation we need to do much more. And that’s why one of the first announcements following the election, was the commitment to act on our manifesto pledge to require companies with more than 250 employees to publish the difference between the average pay of their male and female employees.

With over £40 billion paid in bonuses in the UK in 2014-15 and a gender bonus gap of 57%, I welcomed the Prime Minister’s announcement last year that bonuses would also be part of the reporting requirements.

Since then, as you’ve just heard from David at Deloitte, more and more companies are already publishing gender pay information.

We have been learning from those who have already published. Like Tesco, who publish a median gender pay gap, Deloitte who publish a mean gender pay gap and Mitie who publish the numbers of men and women working at different pay bands.

And we have been testing what works using real employee data – because we want this to work in the interests of employers as well as employees.

And we are not alone. Around the world countries like ours are using transparency to drive and accelerate change so that we all have a fair chance at success in the workplace.

Just last week President Obama announced new pay transparency rules for US companies arguing that “women are not getting the fair shot that we believe every single American deserves”.

I expect that every company here today will be aware of these regulations and many of you have provided useful feedback to the first consultation document, which received over 700 responses. Thank you if you took the time to take part.

We will be outlining the full details of these regulations very shortly in the form of a second consultation on the draft regulations themselves where we will ask again for your input.

We are determined to get this right, to ensure that the regulations are fit for purpose and workable for business.

Why transparency is important

However, many people might question what difference these regulations will actually make, if pay transparency will really overturn years of ingrained cultural practices and decades of gender imbalance in business.

The fact is, transparency is one of the most powerful tools that we have for shaping behaviour and driving change.

Transparency will cast a light on the challenges of progressing in the workplace and create the pressure we need to drive change. This will enable the impact of workplace policies and practices to be monitored and discussed.

And don’t just take it from me; take it from the businesses who have already started to benefit from this increased transparency:

Easyjet have said that “being transparent and reporting on gender is helping them to focus on how they can continue to make progress”.
BHP Billiton, who you will hear from shortly, said “experience shows that those items that get measured and disclosed are better understood and acted upon”.

And PWC have said that their “reputation and brand has benefited from gender pay disclosure”.

That’s why events like today are so important – they are about showing what can be achieved through increased transparency.

We have to celebrate this change in business culture and share best practice – and I’m so pleased to see so many of our important trailblazers in the audience today including my former ministerial colleague Jo Swinson. I believe that your determination and achievements will inspire others to follow suit.

And I’m delighted that the Government Equalities Office, alongside Business in the Community will be once again holding the Think, Act, Report Transparency Award later this year.

This is another fantastic opportunity to showcase the range of information already being published. I know Deloitte, BHP Billiton and Sodexo are shortlisted for this year’s award and I’d like to wish them the very best of luck.

I’m also clear that what we expect of business we should expect of ourselves and that’s why I welcomed the Prime Minister’s announcement last year that the gender pay gap regulations will be extended to the public sector.

The public sector pay gap is currently 18.5%, only just below the national average, and although some public bodies already publish pay gap data, I want to ensure that this good practice spreads across all larger public authorities.

Tackling the causes of the Gender Pay Gap and transforming the workplace

So as I’ve said, transparency is one of the greatest tools we have for eliminating the gap, but we must also tackle the root causes. Women working in the UK still earn on average less than men because too few women get to the top and too many are concentrated in lower pay sectors.

To tackle this we must deliver a workplace fit for the 21st century and that’s why we are breaking down the barriers preventing women from progressing to the top:

More than 20 million employees can now request flexible working, providing more choice for working parents;

– we’ve introduced shared parental leave because we know childcare is an issue that affects both mothers and fathers, and;

– we’ve committed to double the free hours of childcare provided for working parents of 3- and 4-year-olds, from 15 hours to 30 hours a week – and we are moving closer to realising this manifesto commitment as our Childcare Bill makes its way through Parliament.

Now many of the businesses in this room have already introduced policies aimed at modernising the workplace and ensuring that their female employees are able to reach their full potential:

So our host Deloitte have introduced a ‘Return-to-work programme’ – the first of its kind in professional services in the UK, to help senior women who have had time away reconnect with the company.
Ford has introduced on-site childcare and dedicated Maternity Advisers for pregnant female employees.

And last week I was at KPMG in Canary Wharf where I heard about the fantastic work being done on diversity, including through the well-established KPMG Network of Women.

Occupational segregation

But as many of the companies in the audience will know, occupational segregation is also a significant contributing factor to the gender pay gap.

Many of the highest paying sectors are disproportionately made up of men while women remain concentrated in lower paid occupations. For instance, women make up 92% of secretaries but only 9% of engineers.

Research shows that those working in science or technological careers are paid, on average, 19% more than other professions.

That’s why we are breaking down the traditional belief that some careers are only ‘for the boys’ through initiatives like the Your Life campaign and the Your Daughter’s Future programme.

We are making good progress with a record 12,000 more STEM A-level entries from girls since 2010.

But if we truly want to close the gender pay gap then we must do more.

We have had some powerful female role models in the past like Ada Lovelace whose passion and vision for technology, have made her a powerful symbol for modern women in the sector. Building on her legacy are women like Roma Agrawal, whose childhood love of Lego inspired her to create iconic buildings like The Shard and inspire today’s women and girls to study STEM subjects.

And I’m delighted that the report published here today highlights some of the excellent work which is already being done to improve female representation in STEM.

Conclusion

I’m a firm believer that actions speak louder than words and that’s why I’m passionate about driving this agenda forward, starting with our drive for pay transparency.

But government cannot do this alone, and that’s why events like today and your commitment are so important. We need you, the businesses of Britain, to seize this opportunity so that together we can make the changes we want to see in our society.

I want to thank you all for the work you have done so far and for your continuing commitment.

Your achievements demonstrate what business can do and how important it is in hiring and retaining the best talent. Every business should commit to ending the gender pay gap because in today’s competitive global market, women who don’t feel truly valued will simply look elsewhere. And who can blame them?

Thank you.