Cameron: Gender pay gap audits are nothing to be frightened of

Firms should have "nothing to be frightened of" over being forced to reveal the pay gap between the men and women they employ, David Cameron told bosses after complaints that the data could be misleading.

The Prime Minister said the fact that female workers were paid on average 20% less than males was "a standing rebuke to our country" and insisted transparency was the key to narrowing the divide.

While gender now made little or no difference to earnings among the under 40s and different rates for the same job had all but been eliminated, action was needed to understand the reasons for the remaining gulf and what could be done about it, he suggested.

Companies employing more than 250 people are to be required to calculate the difference within their workforce - a move which Labour legislated for in 2010 but which the Liberal Democrats were unable to persuade Conservatives to bring into force under the coalition.

Conforming that the new Tory-only administration would however press ahead with the reform, Mr Cameron promised a full consultation with businesses over what information would be required and how it would be released.

"It is outrageous that as it stands today there is still a gender pay gap," he told The Times CEO summit.

"I have two girls and a boy and I want my two girls to have every opportunity to be as well paid as my boy. It's not fair and the fact that there is still this gap is a standing rebuke to our country."

"What we need to do is now identify where the gender pay gap is and work out how best to deal with its causes.

"This proposal for greater transparency is an important step along the way.

"If you can see in each company how big the gap is and you are transparent about it, you can then start asking yourself what we the government can do to start closing the gap."

Among the key priorities were increasing childcare to get more mothers to return to work and encouraging girls to study maths and sciences - routes to professions which have tended to be male dominated.

The CBI backed targets for bringing average pay towards parity but said publishing data "could be misleading".

"We will work with the Government to ensure that rules on what is published are flexible enough to be relevant to each company," deputy director-general Katja Hall said.

"To see real progress, however, we need to challenge occupational stereotypes by encouraging more women into male-dominated industries and investing in careers advice."

At the event, Mr Cameron accepted that the numbers could look bad for some types of business, such as airlines.

"Obviously some companies will say 'we've got more male pilots and more women doing other jobs so to start with this is not going to look as good as I would like.

"But on the other hand transparency helps to get the conversation going about how we get more women pilots so I think it will be a very health spur.

"I do not think there is anything to be frightened of."

It came as the Government announced that a target of getting women into at least a quarter of boardroom seats at the UK's biggest firms has been met.

Lingerie tycoon Michelle Mone, the founder of the Ultimo underwear company, said the pay disclosure requirement was "absolutely fantastic".

"Women should rightly have the same expectation of good pay and progression as men, wherever they choose to work," she said.

"Today's announcement will highlight those companies where the pay gap is persisting. I hope this will empower women to challenge this state of affairs and ask why.

"It is great progress that a quarter of people on FTSE 100 boards are women, and that's without legislation or quotas. I hope that many other talented women will follow in their footsteps."

Labour equality spokeswoman Gloria De Piero said: "It's good news that the Government have finally embraced pay transparency after shelving the Labour legislation for five years.

"But 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."

Lib Dem former equalities minister Jo Swinson said she had fought "tooth and nail with the Conservatives to get them to agree to even minimal changes to help close the gender pay gap" while in coalition.

"They refused to introduce these exact plans for five years, only relenting in March after huge pressure from the Liberal Democrats in government.

"For them to now try and pretend this is a new announcement and that they have championed this cause all along is an insult to people who have campaigned for equal gender pay for decades."