The Bank of England says small businesses should report their gender pay gaps – what are we waiting for?

Harriet Hall
PA

Should a company be in business at all if inputting simple equality measures is likely to send their profit margins into free fall? It is a common picture: the government announces suggested enforcements to maternity leave or the living wage and cries reverberate around the SME (small and medium-sized enterprises) world. We will never survive! The costs will bankrupt us! Responses like these only serve to highlight inadequacies in business models rather than the so-called unreasonable demands being placed upon them.

Women are being ripped off for our gender on a daily basis, so excuse me if I don’t feign concern when suggestions to improve equality are met with resistance. Rather, I am celebrating progress and focusing on the positive. Most recently, senior Bank of England official Andy Haldane announced at a conference this week that companies with 30 or more staff should be reporting their gender pay gaps, too.

For me, this move is appropriate – if overdue. Since 6 April 2017, companies employing more than 250 people have been obliged to report their gender pay gaps. The results have been eye-opening. From Ryanair (71.8 per cent) and Millwall Holdings (80 per cent) to Boux Avenue (75.7 per cent) and Sweaty Betty (66.6 per cent), the pay gaps – miles wider than the 17 per cent national average – are jaw-dropping.

Efforts to “explain away” these gaps included clichés like simply having more men in senior positions, more women having part-time roles. Another favourite is that women are less likely to ask for pay rises and promotions than men. The fault, at every turn, is always situational, or it is always the woman’s. It is never the company’s.

Haldane also addressed the ethnicity pay gap in his speech, saying there were “strong grounds for extending compulsory reporting to ethnicity as well as gender”. We already know that being a woman of colour is a unique disadvantage in society and reporting could make leeway in changing this. We are expecting it by 2021.

We all know that progress can be a slow-burner, and women are being penalised for being women – there is no other way of painting it. A new report released this week for the Government Equalities Office found women were two thirds less likely to get promoted in the five years after having a child compared with their male counterparts. Even more depressingly, 17 per cent of women had left employment entirely in the five years following childbirth, compared with just four per cent of men.

It’s a vicious cycle that must be broken: mothers are less likely to go back to work than fathers because they go into maternity leave earning less than their male partners, then they return from it earning even less. Childcare is unaffordable and parental leave still remains unequal in this country. Companies penalise mothers who end up being the ones bearing the burden of school pickups and doctors’ appointments because now their careers are less important to the family income.

Look around most offices and ask yourself how many women over the age of 35 are occupying senior roles – and how many of those are mothers. Now tell me small businesses should not be required to try and change this.

The gender pay gap isn’t all about city bankers and board-level roles; it’s about ordinary people working in all levels of society. In fact, just 40 per cent of the private sector is covered by the 250 employees pay gap reporting threshold. If we don’t target small business and hold them to account, it will only continue to stubbornly exist.

The Bank of England speaks of “incentives” for companies to explain and close pay gaps, but when the World Economic Forum says it will take 202 years to close, why is the government dragging its heels?

We know how to solve this and no, it isn’t comfortable. We need to punish companies that don’t reduce their pay gaps, we need to enforce job share options and equal parental leave, as well as provide support for parents returning from leave until the spirit level balances out. Despite volumes of research showing that more gender-equal companies achieve higher average returns, not all businesses see it that way or figure it’s enough of an incentive.

We can’t look away from the real reason that the gender pay gap exists: discrimination. The more companies are allowed to peddle the lie that it doesn’t, the more women – and our economy – will continue to suffer. It’s as simple as that.