More than four decades have passed since strikers at Ford’s Dagenham plant helped usher in the Equal Pay Act. Yet, tomorrow, with eight weeks still to go until the end of the year, women in effect stop earning relative to their male counterparts. The point in the year campaigners have dubbed “equal pay day” is based on the 14.2% gap in average hourly pay between men and women working full-time.
That gap is part of a much wider inequality problem in Britain’s workplaces. Not only are women likely to earn tens of thousands of pounds less than male colleagues over a career, they will also face a tougher battle getting to the top. They are far more likely than men to work in low-paid part-time jobs. And when caring needs hit a family – be it for small children or ageing parents – women are still more likely than their male partners to cut their hours or give up work altogether to shoulder the load.
Good news, then, that David Cameron has vowed to “end the gender pay gap in a generation”. Shortly after re-election he announced new rules forcing every company with more than 250 employees to publish the difference between the average pay of its male and female employees. There were also encouraging noises in two government-backed reports published over the last fortnight.
The most recent looked at the UK’s financial sector, where fewer women progress to senior levels than in any other industry. Leading the government-backed review, Jayne-Anne Gadhia, the chief executive of Virgin Money, recommended the bonuses of City executives be linked to hitting targets for the number of senior women appointed at a firm.
That followed a report from Lord Mervyn Davies that showed FTSE 100 companies had exceeded the target of having 25% women on their boards – more than doubling their numbers from 2011, when the goal was set.
Davies has now raised the bar, urging Britain’s biggest companies to ensure that at least a third of board positions are held by women by the end of the decade. So he should. The rise in numbers of women on boards is welcome but started from a low base. Research by the Guardian this year showed there were more men called John running FTSE 100 companies than all the female bosses combined.
There are plenty of other reasons campaigners will be pushing Cameron and colleagues to keep their word on equality. When and if women do make it to the top, against the odds, they tend to be paid far less than their male peers.
New analysis being published by the TUC tomorrow will show that as people move up the pay scale, the gap between men and women widens.
There is still widespread evidence, too, of pregnant women and new mothers being discriminated against by their employers.
Employers are by no means alone in carrying the blame for entrenched stereotypes around the role of mothers. Parents themselves are guilty of outmoded thinking when it comes to deciding who cuts their work commitments to care for the children.
In theory, shared parental leave, which came into force this year, should challenge the stereotype of the mother as the main carer. But in reality for most families it would not make financial sense to take advantage of the new rules.
It’s baby steps rather than social revolution. So will a generation be long enough? For the economy it simply has to be. More than half our graduates are women, and a country with such woeful productivity levels cannot afford to squander so much talent, training and education.
But it will require more than reports and recommendations. Investors must lobby for more equality in companies, businesses themselves can fight discrimination, offer more flexibility and be transparent about pay. The government, meanwhile, must do more on childcare and to help fathers take parental leave.
Only if action is taken on all fronts can we expect to stop marking equal pay day.
Insular VW badly needs some independents
The news last week that Volkswagen may have rigged carbon dioxide tests as well as those for diesel emissions is a disaster for the German company for two reasons. First, rigging CO2 tests resonates more with governments and motorists than the diesel scandal. CO2 effects the tax band that a vehicle sits in and its fuel consumption, so governments will be able to force the company to repay tax credits, and customers will ask for compensation for their fuel costs. Second, the discovery of another front in the scandal erodes the credibility of VW’s investigation, its management, and the company’s corporate governance.
Matthias Müller, the new chief executive, was already stretching his credibility when he claimed that a handful of rogue engineers were behind the installation of defeat device software into 11m diesel cars. Now that we know VW may also have cheated other tests, this statement becomes even more unacceptable.
Even if it was 10 to 20 rogue engineers who created the scandal, there is something deeply wrong in a company where this level of deception is allowed to foster or is not spotted. VW’s statement revealing its concerns about the CO2 levels emitted by 800,000 cars was laughable. It had no detail about the models involved or how the irregularities occurred. It provided more questions than answers.
The German carmaker sorely needs an independent and experienced voice at the top to help it through this crisis. The bosses of Britain’s leading companies are criticised when they go awry, and rightly so. But the standards that FTSE 100 companies are held to should be applauded. The need for an independent chairman, a senior independent director, and the regular refreshing of boards means management is held to account and is connected with the outside world. VW gives the impression that it is insular. Its board is full of local government ministers and members of the Piëch and Porsche family. The works council is represented, while the chairman is the former finance director.
The company should take a leaf out of Britain’s book and bring some outsiders on to its board.
Cyber-attack puts TalkTalk’s targets out of reach
Is embattled TalkTalk chief executive Dido Harding about to set a record for the fastest abandonment of a core financial target? It was only in May that she upgraded the phone firm’s revenue targets. The last quarter had seen record growth and she thought TalkTalk could run at 5% every year to 2017 and beyond. After the cyber-attack suffered by the company a fortnight ago, few in the City think it can be done.
On Friday the group said the impact was “less than feared” but the damage to the brand will be hard to shake off. Indeed, think of Harding’s reign as a five-year attempt to shed TalkTalk’s reputation for poor customer service. Until the hack, she seemed to be winning; hard to say so now.
Chairman and founder Sir Charles Dunstone’s thoughts would be good to know: since the optimism in May, the value of his 30% stake has fallen by £450m.
