Labour promises to close gender pay gap by 2030

A Labour government would aim to close the UK’s gender pay gap by 2030, Laura Pidcock and Dawn Butler are set to announce in a major policy launch on Thursday.

The Shadow Employment Rights Secretary and Shadow Women and Equalities Secretary will unveil the new target on Equal Pay Day, when women effectively stop getting paid for the rest of the year compared to their male counterparts.

Labour’s fresh plan not only requires companies to identify where gaps exist and be transparent about their gender equality practices, but also forces employers to take necessary action to close the gaps.

If organisations do not “take proactive steps” to tackle their gap, from reporting their gender pay to publishing action plans, a new Workers’ Protection Agency would have the power to issue fines.

Those with over 250 employees will need to acquire government certification, which will allow them to be considered for government procurement contracts. These large companies are set to be assessed on recruitment, progression, pay and support for work/life balance.

Labour has not yet decided how big the fines will be for organisations not meeting the standards required. The party notes that in Iceland they can amount to £355 per day until recommendations are met. 

Labour’s measures to close the gender pay gap by 2030 include:

• Introducing a real living wage of £10 an hour;
• Creating a Workers’ Protection Agency with the power to fine organisations that fail to report their gender pay, publish action plans to reduce pay gaps or take satisfactory measures to close the gap;
• Requiring all employers with over 250 employees to obtain government certification on gender equality or face further auditing and fines, with the threshold being lowered to include workplaces with over 50 employees by the end of 2020;
• Extending statutory maternity pay from nine to 12 months and introducing free childcare for all two-to-four year-olds;
• Strengthening protections against unfair dismissal and redundancies with extra rights for pregnant women;
• Rolling out sectoral collective bargaining to raise the floor on pay across entire sectors;
• Raising the pay of low-paid public sector workers by ending the pay cap and bringing local public services back in-house;
• Introducing national pay scales in low-paid sectors with overwhelmingly female workforces, such as childcare and school support staff;
• Assessing companies against best practice public service criteria including provisions for collective bargaining, adherence to environmental standards, effective equalities policies, full tax compliance and application of pay ratios when procuring services in the private sector;
• Enforcing maximum pay ratios of 20:1 in the public sector;
• Requiring large employers to introduce a menopause workplace policy.

Commenting ahead of the announcement, Pidcock said: “For far too long the interests of working women have been at the bottom of the list of priorities for government. Labour in government will be uncompromising in tackling the structural barriers that are holding so many women back.

“Employers will no longer be able to treat the issue of the gender pay gap as an afterthought. Instead, they will be expected to take proactive steps to close it. Labour will deliver the real change that women need in the workplace.”

2020 will mark 50 years since the passing of the Equal Pay Act, but the gap in pay between men and women stands at 13.1%. The Fawcett Society reports that, at the current rate of progress, it would take another 60 years to close that gap.

Equalities spokesperson Dawn Butler described the situation under the Tories as “not good enough”, adding: “Labour’s real living wage, robust gender pay auditing – including fining organisations that fail to take action, will help us deliver real change and meet this ambitious target.”

Women are paid £380,000 on average over their lifetimes in the UK, compared with an average of £643,000 for men according to figures from the Office for National Statistics. The ONS report released earlier this year shows that women with a master’s or PhD degree earned only two-thirds of what men earned with the same qualifications.

Globally, women are paid 63% of what men receive. The World Economic Forum highlights that not a single country has closed the gap, and claims that it will take 202 years to reach economic parity between men and women at this rate.