Outlook Lynne Featherstone, the equalities minister, picked a curious venue to announce the Government is reversing plans for compulsory audits of what companies pay their male and female staff. The announcement came in a speech at Cranfield University's School of Management, as part of an event to promote its latest research into the progress of women in the boardroom.
The venue was odd because Cranfield's research shows exactly what happens when organisations are left to tackle inequality by themselves. Those who worry about the remarkably low number of women in the boardrooms of Britain's biggest businesses will no doubt be pleased to hear there has been an improvement over the past year: women now account for 12.5 per cent of FTSE 100 directors, up from 12.2 per cent.
The glacially slow progress that has been made on getting women on to boards underlines the limitations of the discretionary approach. Companies talk a very good game, but they fail to act unless they are forced to.
Ms Featherstone explained that the Government had decided to reverse its predecessor's plans to require companies to publish gender pay audits because it wants "to move away from the arrogant notion that government knows best". Well, businesses would certainly benefit from the widescale adoption of that policy. But if the equalities minister is suggesting the Government doesn't know best when it comes to requiring companies to do everything possible to ensure women are paid as well as men, she's in the wrong job.
The good news is that corporate governance authorities are prepared to be bolder than Ms Featherstone. The latest combined code requires companies to offer an explanation if women represent fewer than 20 per cent of their directors and there are plans to increase that threshold.
The code operates on the "comply or explain" basis, which falls short of compulsory legislation. Still, it's a more forward-thinking approach than the one Ms Featherstone adopted yesterday.
The British  has scrapped plans by the previous government to change the rules on .
Equalities Minister Lynne Featherstone
The previous Labour government included a provision in the —Section 78—to allow the government the option to introduce regulations that would require companies to publish details of the difference in pay between male and female employees. If the government had activated such regulations, they would have come into force in 2013. The current government have decided not to activate this requirement and instead will only ask businesses to provide this data voluntarily and will set an "aspiration" to dramatically increase the number of women in senior positions in business.

, the Liberal Democrat MP and coalition Equalities Minister, in announcing the plans stated that the government wishes "to move away from the arrogant notion that government knows best, to one where government empowers individuals, businesses and communities to make change happen."

Featherstone announced the policy at the School of Management at , who have conducted research finding that only 12.5% of directors of FTSE 100 companies are women, up from 12.2% last year—"glacially slow" progress according to business commentator David Prosser.

Featherstone justified not implementing the pay audits due to the economic costs: "Right at this moment of financial peril to the nation is perhaps not the moment to introduce mandatory pay audits."

This breaks with a Liberal Democrat manifesto commitment, as well as contradicting Featherstone's own words two years ago in support of the audit: "A voluntary audit system for private industry is hardly worth the paper it's printed on. We need to know when the government actually plans to step in if progress isn't made."

Women's groups and trade unions have condemned this move. Dave Prentis, the general secretary of , Britain's second largest trade union, said that this is an example of the government "stripping down its commitment to equality".

Prentis continued: "It is a disgrace that women are still getting paid less than men. This move threatens to turn the clock back on all the progress already made with equal pay."

Ceri Goddard, the chief executive of the feminist campaigning group the , condemned the plans: "The persistent gap in pay between men and women is one of the starkest examples of inequality in the UK today. The government's decision not to bring into force section 78 is a huge disappointment and means this injustice will continue for a long time to come. The government has today consigned another generation of women to lower pay. Their proposal to rely only on voluntary business action on pay isn't just naive, it sends a dangerous signal that tackling discrimination against women is a choice, not a requirement."

, Featherstone's shadow minister on the Labour benches, called the news "another broken promise from the government" and said that "scrapping Labour's plan to increase transparency in pay is a backwards step for women's equality."


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