Gender pay gap: Business groups mixed on Nicky Morgan's new name-and-shame plans

Business groups have given a mixed response to women and equality minister Nicky Morgan's new plan that would see companies publish their gender pay gap figures. The Tory minister's new legislation means that companies with more than 250 employees will have to reveal the pay gap at their business.

Some lobby groups have said that the numbers cannot provide the full pictures, while others say that the plans are a breakthrough on the path towards closing the gender pay gap. Others, again, have said Morgan's measures are not enough.

From 12 April 2017, companies have to start calculating the difference in pay between their female and male workers. From April 2018, league tables will be published, listing the 'naughty and nice' companies when it comes to gender equality.

Carolyn Fairbairn, the director of the Confederation of British Industry (CBI), said that the government should not use league tables to name and shame companies, arguing that "data will only be able to present a partial picture, particularly given factors such as the mix of part-time and full working and sectoral differences".

"Where reporting can be useful is as a prompt for companies to ask the right questions about how they can eradicate the gender pay gap," Fairbairn said. The CBI boss also urged the government to work together with businesses to make sure the new legislation contributes to closing the gender pay gap.

The Institute of Directors echoed the CBI's concerns, saying that the issues are "always much more complicated than a single number can ever reveal". The business lobby groups said that measures taken by Morgan such as encouraging women to take up male-dominated professions, are more effective to close the gender pay gap.

However, the Trade Union Congress feminist organisation the Fawcett Society said that the plans are a step in the right direction but do not go far enough.

"If David Cameron is serious about ending the gender pay gap within a generation we need a much bolder approach from ministers," TUC general secretary Frances O'Grady said. "We're disappointed that firms won't have to publish their gender pay gap figures until 2018. There is no need for such a long delay. And it is a real shame that bosses won't be made to explain why pay gaps exist in their workplaces and what action they will take to narrow them."

The TUC agreed with the CBI that companies should not see this as a box-ticking exercise but as an opportunity to tackle the pay gap.

Women's rights charity the Fawcett society also argued that more needs to be done. "Without stronger penalties and pressure for companies to take action, those employers who are doing the right thing risk being undercut by those who won't play by the rules," chief executive Sam Smethers said. "This is too important to leave it to the best employers to drag the others into the 21st century. Without action from all organisations we won't see meaningful change."

The Chartered Management Institute welcomed the legislation: "Publishing league tables will drive diversity, bringing benefits not just to women but to business. Closing the pay gap will open the talent pipeline, increase management quality and boost productivity."