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UK companies will be forced to reveal their gender pay gap from next year

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Large British companies will be forced to reveal whether they are paying male employees more than female employees - and if so, by how much, in a new move announced by the government today.

By the first half of next year, UK organisations with 250 staff members or more will have to disclose data on the discrepancy between the average wage of women and men working for them.   

"Today I’m announcing a really big move: we will make every single company with 250 employees or more publish the gap between average female earnings and average male earnings," prime minister David Cameron said, as he launches a consultation into the measure, created in the final few months of the Coalition government.

"That will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up."

David Cameron

David Cameron

Despite the 1970 Equal Pay Act, women still earn significantly less than men in the British workplace.

The overall pay gap in the UK stands at 17.5% (2014), measured by median gross hourly pay. This means that women now earn 82p for every £1 earned by a man. 

This figure has fallen dramatically from 27.5% in 1997 but is still above the EU 2014 average of 16.4%, a range which includes Slovenia at 3.2% and Estonia at 29.9%.

When full-time work is taken in isolation, women earn 9.4% less than men, down from 10% in 2013. It means the gap between men and women’s full-time earnings has now almost halved since records began in 1997.

According to women's equality organisation The Fawcett Society, a number of factors influence the gap, including the 'motherhood penalty' - women taking less well-paid part-time jobs in order to fit around childcare demands - a greater concentration of women in lower wage sectors, and outright discrimination.  

gender pay

The 'motherhood penalty' still plays into the gender pay gap

The consultation launched today will look at the detail of how the new gender pay gap regulations will be designed - including what, where and when information will be published.

"We are committing to eliminating the gender pay gap in a generation," said Nicky Morgan, the education secretary and equalities minister. "This is not just the right thing to do, it makes good business sense: supporting women to fulfil their potential could increase the size of our economy by 35%. To achieve gender equality, we need to continue to inspire young women and girls so that they can compete with the best in the world for the top jobs – and see that their hard work will pay off."

Gloria De Piero, the shadow equalities minister, welcomed the move but added, "For pay transparency to make a real difference, we need to have an annual equal pay check which measures progress and recommends what action needs to be taken – a move the government voted against earlier this month."

Writing in The Times today, Cameron noted that the new National Living Wage would also play an important role in narrowing the gender pay gap.

"This will primarily help women, who tend to be in lower paid jobs," he said. "It will help close the gender pay gap. But we need to go further, and that's why introducing gender pay audits is so important."

Michelle Mone, founder of the Ultimo underwear company, told the BBC that the pay disclosure requirement was "absolutely fantastic". She said she hoped it would "empower women to challenge this state of affairs".

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