Firms underpaying women should be fined. Under Labour they will be

It is International Women’s Day, a day to celebrate the achievements of women around the world and how far we’ve come in the fight for equality, while also recognising how far we still have to go. Action is long overdue in tackling the scandal of unequal pay. So I’m announcing Labour’s policy to require employers to take action in closing their gender pay gaps and ending unequal pay. A Labour government will ensure employers’ plans are adequate, robust and, most importantly, adhered to.

Under a Labour government, all public and private companies with more than 250 employees will be required to report what specific action they are going to take over a set period to close their gender pay gaps. If they don’t, they will face further auditing and fines. In 1970 Labour introduced the Equal Pay Act. But nearly 50 years later the scourge of unequal pay persists. According to the Fawcett Society, women in full-time employment are paid on average 14% less than men, and including part-time work the gap widens to nearly 20%. We cannot wait another 50 years for equal pay.

The government recently introduced a requirement on large employers to report on gender pay. But we need action, not just audits. Under Labour’s policy, employers will not only have to report on their gender pay gaps – they will have to prove they are taking action to close them. This means the onus will no longer be on female employees to prove they are being underpaid in comparison with their male counterparts. Instead, the onus will be on employers to prove they are paying employees fairly and have good gender equality practices.

The deadline for employers to report gender pay discrepancies, 4 April, is fast approaching, but only about 1,290 companies have submitted their figures so far, despite the fact that about 9,000 employers are estimated to fall under the legislation. Figures released by the Guardian on the data collected so far are devastating. Of the companies that have reported, an incredible 74% pay men more than women. Just 15% of large employers pay women employees more than the male ones. And the Equality and Human Rights Commission, the body responsible for overseeing this legislation, has seen its budget cut by 70% by the Conservatives. Time and time again this government’s actions demonstrate how hollow the Tories’ words are on women’s equality.

We’re following in the footsteps of Iceland, which consistently ranks as the number one country for gender equality, and last year became the first country in the world to require firms to prove equal pay. Equal pay for women will bring benefits for business too. A PricewaterhouseCoopers report into the gender pay gap released on Monday estimated that closing this gap could bring benefits to the UK economy of £90bn. It is sound business sense that will help to improve the reputation of businesses and make the country’s workforce happier.

The next Labour government will acknowledge and reward good business practice through equal pay employer certifications. And we will seek to award government contracts to businesses that obtain certification. While in opposition, we will put this proposal to a public consultation to obtain feedback from businesses, workers, women’s organisations, trade unions and relevant non-departmental public bodies to ensure we are ready to introduce the policy when we walk into Downing Street.

But the deep-rooted social and economic inequality facing women runs deeper than the pay gap. Women have borne the brunt of 86% of the Conservatives’ cuts and more than 60% of those currently earning less than the living wage are women.

Labour will end the Tories’ failed austerity agenda and introduce a real living wage of £10 per hour. We will also address the underlying structural issues that allow these disparities to exist, including insecurity around self-employment, exploitative zero-hours contracts, maternity discrimination, and the low value put on care, hospitality- and public-sector work.

On this International Women’s Day let’s resolve to end the gender pay gap once and for all, and to prioritise tackling the structural barriers facing women across society, ensuring we take the next vital steps to achieving equality.

• Dawn Butler is shadow minister for women and equalities and Labour MP for Brent Central