Pay gap disclosure 'will boost economic recovery'

Requiring firms to reveal the "pay gap" between their male and female staff will help, not hinder, Britain's recovery from recession, Equalities Minister Harriet Harman insisted today.

Annual gender pay audits, which will become a legal requirement in 2013 if bosses fail to join a voluntary scheme, are included in the Government's Equality Bill published today.

The legislation also imposes a duty on public bodies like councils and health authorities to address social inequalities and bans age discrimination outside the workplace.

Bringing together a raft of existing laws into one "plain English" document, it contains protection for carers, breast-feeding mothers and female members of clubs such as golf clubs.

Business organisations have warned it will impose unnecessary bureaucracy on firms already struggling in the economic downturn and Tories have dubbed the new public duty as "class war".

But Ms Harman rejected the criticisms amid reports of clashes within the Cabinet over the timing of the Bill - which she hopes will become law by the early part of next year.

"The economies of the future that will prosper are the ones which are not blinkered, held back by old-fashioned hierarchies, by a sense of women knowing their place, by overlooking the talents and abilities of people on the basis of the colour of their skin," she told reporters.

"When times are difficult, actually fairness is at a premium and it does not cost anything to be fair. It is part of helping the economy prosper for the future by tackling what its market failure because it is market failure to treat people unfairly for any reason.

"We don't see this as anti-competitiveness - it actually underpins competitiveness.

"Equality and opportunity underpins a meritocracy. This does not hold business back, this helps business."

There was still a 20 per cent pay gap between men and women, she said, despite progress over 30 years.

The Bill will require firms which employ at least 250 staff to publish details of the average hourly pay of male and female workers and Ms Harman said there would be talks between business groups and the Equality and Human Rights Commission over the exact details of the scheme.

"You have got to believe that either women are 20 per cent less intelligent, less hard-working, less committed to their job, less experienced, less qualified, or you have got to believe that there is structural pay discrimination. We believe there is structural pay discrimination," she said.

David Yeandle, head of employment policy at the Engineering Employers Federation, said: "The culture change needed in our society to encourage a more diverse workforce and address equality issues will not be achieved by imposing unnecessary administrative burdens on business, such as the requirement to publish gender pay data.

"This will do nothing to reduce the gender pay gap and could undermine manufacturers' efforts to encourage more women to work in manufacturing."