 Welcome to the 13th meeting of the Economy, Jobs and Fair Work Committee. I have apologies from committee members Gordon MacDonald and Andy Wightman. I would ask everyone present to turn electrical devices to silent or turn any off that might interfere with the sound system. The first item on the agenda is item 1, which is a decision by the committee to take item 4 in private. Today, we have three witnesses whom I would like to welcome at this stage in our gender pay gap inquiry. First of all, we have Emma Gibbs, who is a partner in McKinsey and Company. Welcome to you. Second, we have Dr Tanya Wilson, who is an early career fellow at the University of Stirling. Welcome. Last but not least, Professor David Bell, who is Professor of Economics at the University of Stirling. Welcome to you. We will start this morning with a question from committee member Gillian Martin. To indicate that you do not need to press any buttons, the sound desk will look after that. I remind members to keep their questions succinct and to the point and also ask the witnesses if they try to do likewise. At this point, I will pass over to Gillian Martin. My question specifically for Emma Gibbs, McKinsey, is about your report last year, where you had a best-in-UK scenario that was modelled. I would like to ask that you had the three differents scenarios that were modelled. If you take us through how they were modelled and as a supplementary question of the back of that, how have you arrived at any assumptions that would relate to Scotland specifically? The model looks at the contribution that women make to the economy in three dimensions. First is the possible participation rate in the labour market, second is the number of hours that they work and third is the sectors that they work in. We largely took ONS data in order to be able to offer international statistics data in order to be able to populate the model and we used projections from Oxford Economics for our forward GDP projections. We looked at the regions using the nuts classification, which are the 12 regions, Scotland being one of the regions, and we looked at the sectors of the economy based on the 19 subsectors that ONS reports against. The three scenarios that we modelled, the first was the business as usual case. That was simply taking the Oxford Economics projections, looking at historical labour participation rates for women and hours worked and their sector contributions. If the pace of change continued the same as it has done for the last decade, what would women's contribution to the economy be? We then looked at a full parity scenario where we effectively said, let's assume in 2025 that women are equal to men so far as they are participating in the economy at the same rate, they are working the same number of hours and they are represented in the 19 subsectors equally. We didn't take into account any differences in the sort of work that women might do in those sectors, we simply looked at individuals in those sectors as having an equal contribution to productivity and therefore to the economy. The best in UK scenario was somewhere in between the two where we said we're not sure it's realistic to assume that in 10 years we're going to reach full parity. Therefore, let's look at what the best rate of improvement has been in the UK at a regional level. We said for labour participation what has been the fastest improvement over the course of the last 10 years. Let's assume that every region now can improve at that same rate. We didn't try and say, let's assume all regions can get to the same level, we thought that was unrealistic given the low base for some regions, but we said let's assume that the pace can be equal. We then did the same for hours and then we did the same for movements in women's contribution to different subsectors. That's how we arrived at the best in UK scenario and that's the £150 billion GDP in 2025 figure that we've come up with. Some of the assumptions that we've made in that we have assumed that every region in the UK can improve at the fastest rate that somebody has over the course of the last 10 years. We have assumed that men and women's contribution to individual sectors is economically the same. We have not assumed that men's participation in the economy or contribution to the GDP will reduce as women come in. Largely, we've done that because as we looked at over the last 10 years, we looked at how women's participation has changed. Men's participation has not changed as women's participation has grown. Therefore, because we were projecting a similar level of increase for women's participation, we thought that it was a safe assumption that men's participation would not be affected by women moving into the economy. What we also haven't looked at is the demand side. We have simply looked at the supply side of the economy. We've looked at what would happen if you could put more workers into the economy, assuming that the economy could absorb those workers and grow as a result of them. Again, the reason we think that's a reasonably good assumption is because the UK has a number of skills shortages and many in the sectors that women are underrepresented. Therefore, we thought that that was a relatively safe assumption. We didn't take into account the economic contribution that women make in unpaid work. Again, we think that that would be an interesting study for somebody else to do, but we looked at GDP, which doesn't include unpaid work. There are a number of assumptions, but nevertheless we think that it was a sound approach to be able to come up with what we think is a reasonably realistic figure of £150 billion, if we were able to make a similar pace as the best regions have managed over the course of the past 10 years. Effectively, we are making an economic case that is realistic based on what's happening in one particular scenario that is realistic. I'm just jumping across to the other study briefly, because I know that a lot of my colleagues are going to come in. You didn't have that same result. I noticed that you said that there wasn't really a very clear economic case. We weren't saying that things couldn't change. What we were focusing on was what had changed and why we thought it had changed in relation to pay in particular in relation to men and women. We didn't say all that much about participation. Instead, our focus has principally been on pay and what's happened in relation to pay. Just one other thing that I wanted to ask before I hand over to my colleagues. The best in the UK model, you said, didn't account for any kind of the types of work. There wasn't any analysis of the impacts of automation or any technological innovations in the future as we go forward. That wasn't looked at at all. To the extent that Oxford Ecomonomics has included those kinds of things in their underlying projections, they would be included, what we haven't done is assumed any additional change in sector productivity. We also haven't assumed any change in the nature of the work that men and women do. We've simply said that if you're in, for example, the agricultural sector, it typically has this level of productivity. Therefore, if you put another person into the agricultural sector, you'll have x per cent more. We haven't done any additional thinking about what the impact of technology would be beyond what Oxford Ecomonomics might have done in their base projections. What we would note, though, is that there are a number of sectors where women are already quite prevalent, which are some of the sectors that are least susceptible to technological replacement and automation and what not, which is perhaps an interesting area to think about. I follow on some of the points that Gillian Martin was raising, but I think that you said, if I understood you correctly, that you'd assumed that women moving into other sectors, which are male-dominated at the moment, would give addition. My thinking is that it would not be more obvious that if 10 women move out of childcare to run a big engineering company, 10 men are going to move out of the engineering company into childcare, and therefore there would be no effect on the economy. Is that not a logical assumption? I think that the reason that we believe that there's room for more people to go into productive sectors is because there's such a skill shortage in productive sectors. Some of the engineering institutions are projecting a million engineering shortages over the course of the next 10 years, and women are particularly underrepresented in engineering, for example. In that case, you could see that you could add many more women to a sector like engineering, a highly productive sector, and that would not displace men, necessarily. Okay, but it would leave a shortage in childcare. Unless you also include women participating more in the economy, which was part of what we assumed. So more women joining the economy, working more hours and also moving into more productive sectors. So I'm wondering, then, would there be a knock on effect? As you said, yes, there wouldn't be a difference in productivity, maybe, but would that maybe have a positive impact on low pay in some of the care sectors? If there was a shortage of staff in that area, they're going to be forced to increase their pay? We don't believe that there is—we believe that you can add 840,000 jobs for women under our best-in-UK scenario, so we're talking about adding jobs rather than just shifting people around. So we're not talking about shifting people out of one sector to the detriment of that sector, we're talking about adding women and putting those women to the extent that you can into more productive sectors as well. It's worth saying that 2,000 of the 150 million benefits can be achieved simply by increasing women's participation in the workforce and increasing the number of hours they do to the tune of an additional 30 minutes per day without doing anything to do with sectors. So we're not suggesting that we're just moving the deck chairs, if you like, we're also talking about putting more women into the economy, which is why we believe that there's an opportunity to increase the size of the economy with more women participating, particularly in some of these more productive sectors, where there are skill shortages and women moving into more managerial positions, which are also an area where there are skill shortages. What we didn't look at in any fashion was the impact on pay. We simply looked at GDP, we did not look at what would be the impact on pay. Okay, so maybe I can switch that question over to Dr Wilson and Professor Bell, that if that argument is correct, that we've got all these spare hours that we can put into engineering, then the care sector would just be left the same and would still stay at low pay and still be perhaps dominated by women. Is there some answer to that? Well, I'll start and maybe Tanya can follow it. We do tell our students and Labour economics about the lump of labour fallacy, which is the idea that there are a set number of jobs in the economy that just doesn't work like that. So if you take a group of people from one sector and move them to another, then it isn't necessarily the case that the result of that will be that the whole level of demand for jobs in the economy will stay the same. There will be multiplier effects. Because the additional workers have come in at higher levels of productivity, they will spend more, which will create more opportunities for jobs in the future. I don't think it's right to think of it as just swapping different parts of the economy. In terms of childcare itself, we can see that during the prime childbearing ages. This is when we really see participation by women falling. As part of the survey, individuals are asked why they're not working or why they're not working full-time, and childcare and duty seems to be a very, very important part of that. So insofar as to encourage women to participate more in the labour market sector, then that would push up demand for childcare and, with higher demand, that should command a premium in prices for childcare, i.e. the wages that those workers in the childcare sector would receive. That's helpful. Thanks for just now. Thank you. I'll move on to Gil Paterson. My question is related to that. We look at your submission on page 26 and you're talking about labour market entry. At that particular time, wages and salaries seem to be fairly similar, but in a tenured period, there's a gap occurs. In your 6.2, you say that it's caused by age, and I'm wondering if that's actually the real case. I wonder if it's interruptions that cause this gap to appear in some businesses that, if you're time-served, you're commanding no matter what your gender is. Because you're time-served, you enjoy a better salary, whereas if you're interrupting through pregnancy or other elements taking care of the family or schooling, etc., then there's a gap because of that, and I wonder if you have any evidence on that. There are two aspects to labour market experience. There is experience within the labour market regardless of which job you're doing, which commands the longer that you're working, the more productive, the better that you go and get at working, and that commands a wage premium. But as you quite rightly say, the longer that you're within a specific firm as well, the more valuable you become to that firm, and therefore your wages increase accordingly. So what we find in the data is at labour market entry that the wages between men and women are equal, pretty much. The gender gap is negligible, and we first see this pay gap emerging within the first 10 years of labour market experience. However, this big widening occurs during what we call the childbearing ages, potentially because, as you're saying, if you're taking the career interruption in order to go and look after children, it's not possible to go and you're missing out on those extra years of labour market experience, so when you return, there's some period that you've missed out on. A very typical pattern is absence from the labour market for a couple of years and then return to work part-time rather than full-time. The evidence for that—one of the bits of evidence, interestingly, is around the fact that part-time females get paid more than part-time males, and that's partly because they're better qualified. They haven't gone back into the full-time route through their career. Instead, they're staying part-time, but many of them are very well qualified and are better qualified than the average male part-timer gets paid more. The question is whether that decision is a voluntary decision or a decision that is forced on them by circumstances such as the absence of affordable childcare. That seems to us to be a critical nexus about why that decision is made. We looked at gender equality indicators in the workforce and gender equality indicators in society. We noticed that, as a woman moves through her life, the indicators get worse in the UK. Women start off relatively equal, and as they move through to their careers, it gets a bit harder. By the time they become mothers, if they choose to become mothers, many indicators get much tougher, including, for example, how many more hours on unpaid care they spend on their male counterparts. There's also a piece of research that has been done that shows that, for skilled mothers, for every year they take out of the paid workforce doing unpaid childcare, they have a lasting reduction in their pay of 4 per cent, which suggests that there's a real penalty with taking time out. One of the big recommendations that we make to business, and certainly that we talk about in our report, or indeed to all employers, is helping women and men to share childcare responsibilities, to share leave periods, and then, when they return to work, to come back into their career tracks so that they don't suffer this penalty. Is that reduction, though, based on the gap that's created in training or keeping up with the changes that take place within a workplace, or is it this time-served component where you have missed pay rises for a given number of years? Is there any evidence on that? I would need to come back to you on that. I don't know if you guys have looked at that. There's a certain argument that, with a career break, your skills depreciate, i.e., because you're taking an interruption, it's possible that you're not keeping up to date with the newest technology. What doesn't seem to go and be recognised is that an individual may be taking time out of the workplace, but it's not that they're doing other skills that could be enhanced. There doesn't seem to go and be a premium for other skills that are potentially developed during this period. Insoffar, as may not be keeping up to date with current skills that are required in the workplace, this would feed into your argument that that reduction in time-served within the firm would be important and would suggest that potential programmes encourage training as an individual comes back to work after a career interruption so that they, in essence, come back with that level of missed skills or return to work programmes. That could be quite helpful in addressing that skill deficit. I think that Julian Martin wants to come in with a supplementary question. It's not just at the end of the 30s when women take career breaks for having children that the gap widens. Women over 50 have quite a large gap, so it's not just about taking time out to have children. Have you done any analysis of why that's happening for women over 50, as well, that the gap is widening even further at that point? I mean, certainly the gap opens and doesn't close. It may widen further. It is important to—it's quite a subtle point—that there's a distinction between age and cohort effects. Although we've said that the gap may be wider for those aged 50 currently, what we're seeing at the beginning of the labour market now is much smaller levels of size of the pay gap. Our analysis shows that, for those aged, what was at 35 to 55 is much larger. We have a difficulty in trying to figure out whether that gap will be there in 20 years' time or whether the gap that is relatively small now will move along with the people who are currently aged 30, say, and as they become more mature. In the labour market, the effect of the general pressure to reduce the gender pay gap will actually mean that, in 20 years' time, that age 50 pay gap won't be as big as it currently is. It's almost impossible from the data to figure out whether that's going to be the case or not. One thing to go and follow on from there is, approximately 30 years ago, the attainment gap—education attainment gap—reversed. Following on what Davey was saying, for cohorts aged approximately 15 above, it's the case that men's education attainment, on average, is higher than women's whereas for those cohorts currently aged 15 below, the reverse is the case. This complicates the matter even further because, as you say, that widening gap age 15 above may also be due to differences in education, which, as cohorts grow age through the system, will no longer exist. It's very difficult to disentangle those two effects. The gender pay gap doesn't exist because women haven't got the education. It exists because of other factors that happen to them. When they're in the workplace, you'll have female graduates dropping off at points when they're in their career. Our analysis specifically tries to get at that issue. We take into account differences in education and differences in experience and see what is left that is unexplained. That bit that is left that is unexplained is the bit that we would say must be due to some form of discrimination or some unexplained component in the difference between men's and women's pay. You're absolutely right that the educational gap has gone in favour of women. Women are, on average, better qualified. One qualification of that, which we mentioned in the paper, is that there is an issue around subject. Our evidence also shows that, in terms of experience, which is something Tanya was talking about as well, typically men used to have more experience with the company that they were in. That doesn't seem to be the case so much in Scotland. So, pretty much all of the stuff that we can explain about wage differences now is either in favour of women or neutral, with the big exception around subjects and occupational choice, which is another issue that we should probably come back to. However, what's left is that component of the difference in pay that is difficult to explain, and one might say that this is the part that could be explained by discrimination. We have a question from Bill Bowman. Ask a couple of questions. The first one is a standard one. We ask all of our panels—I'll just read it so that I don't get it wrong, although I've asked it often enough. Does the panel believe that we have a defined set of agreed statistics on female economic activity in Scotland and on the pay gap? I don't know if you're putting your head in your hands. The second question is, what correlation, if any, has there been between the narrowing of the gender pay gap in Scotland and economic growth over the past decade? We have many ways to calibrate men's and women's pay. There are two main sources for that. We use one for the analysis that we have in our paper. There's another called Ash, which is an employer's side view of how much people are paid. There are arguments around which of the particular sets of statistics you should use. You should use the hourly pay gap, the weekly pay gap, the annual pay gap or the lifetime difference in earnings. All of those give slightly—well, not slightly in some cases—very significantly different answers, partly because, say, if you take the lifetime, the career gap that may have occurred will increase the overall difference between men's and women's pay, and then things like pension contributions should be added in to get an idea of the overall difference if you take that lifetime perspective. We are not coming down on any particular one of those, because I think they suit different purposes, but it is interesting that the OECD uses the full-time weekly pay, and that's the one that you can use if you want to compare Scotland with other countries. That's the one where the OECD has done the work in terms of doing the calculation. The other thing about the statistics on this, and we make the point in the paper, is that the well-excused nuts who said what we should be trying to measure with a measure of the overall activity in the economy is the activity of businesses of government and of households. We can make a reasonably good go at businesses, a bit of a go at the public sector government, and we add those two together and call them GDP. We don't make any effort, really, to value the contribution towards overall economic wellbeing that is made by activity within the household. It's inherently a difficult thing to do, but, if you do the meal in the house and the meal in the restaurant, there's a pretty stark contrast in that the latter contributes to GDP, and the former does not. That's just the way that national income accounting works. Going into the technicalities of how to compare the statistics used to compare pay between men and women—ideally, what we would like to do is go and compare equal amounts of work done and the remuneration between the two, and some may think that that should best be captured by, for instance, hourly pay. Given that many people are not paid by the hour, they don't actually report their hourly pay, they give perhaps their weekly pay or their monthly pay or their annual pay, which may be an accurate figure or may be an estimate, and then they go and give an estimate of the number of hours that they work within a given week. It's a statistical construct that you divide an estimate by an estimate, and you go and get something that's incredibly imprecise, so what I'm saying from that is this measure that we can go and get, for instance, from the Office of National Statistics. The labour force survey on hourly pay can be shown to go and be very imprecise compared to, for instance, the ASH data that uses administrative data. However, the hours that someone reports working in a given week is an estimate of their hours. For most people, it's an estimate of their hours, so I would say that I work 40 hours a week, but that fluctuates between 38 and probably 43 in any given week. Sorry just to return to that. There is a debate over which of the measures is the most appropriate to use. In our analysis, we use the weekly wages given that people are more likely to be able to accurately report how many weeks that they worked, or alternatively did you work all year? That means that they worked a full 52 weeks, and it reduces the bias somewhat in the statistics that I reported. It has been argued that the distinction between part-time and full-time is also a fairly arbitrary distinction, and that's probably true. Also, we don't say anything about the nature of pay differences depending on the kind of contract that people have. Zero hours contracts, temporary contracts and full-time contracts may be differences in the gender pay gap according to the type of contract that is on offer. Of course, decisions that people make about whether to apply for jobs that those kinds of contracts are on offer for will influence whether employers pay well or pay badly. If zero hours contracts are not very popular, employers will find that they will have to pay more per hour to attract people to that kind of job. Thank you for those comments. On the question of the narrowing of the gender pay gap in Scotland and the growth in GDP. The dominant thing in the last 10 years has been the great recession, as it's called. There has been a marginal narrowing of the gap, but it's still quite large. That's mainly because men have done pretty badly. A lot of the jobs—this is where Scotland is a bit distinctive from other parts of the country—in the last 10 years, there has been jobs growth. Indeed, we have a record high level of employment in Scotland, but much of the jobs growth has been part-time much more heavily weighted towards part-time jobs than is the case south of the border, where many of the jobs that have been created have been full-time jobs. That may have helped women in particular. I don't know the answer to that. Overall, there has been a marginal narrowing that's largely because men have done fairly badly. The real pay is lower in 2016 than it was in 2008. May I ask Emma Gouwch, unless you're going to say something on this? On whether or not there's a correlation between the gender pay gap and the GDP, that's not something that we looked at. I ask you a separate question. Your report has been widely exposed and commented on and quoted here as well. Have there been any academic or professional criticisms or criticisms about your methodology, your processes, your results that you believe of any merit? We have had—as part of our McKinsey Global Institute—academic advisers who help us with the methodology. I'd be happy to share the names of those academic advisers afterwards. I don't have them off the top of my head. What about your groupings? Certainly, the academic advisers that we have have been quite thorough in looking at our modelling. We've had academic advisers from Harvard Business School and the Economist largest in the US. We've also had a number from the UK who specialise in gender economics who have given us substantial feedback on the methodology that we've done. We've not had large amounts of criticism outside of that process, but we believe that we've engaged with the academic community to ensure that we've got a robust model that stands up to some academic scrutiny. Are you updating your model or does it stand as it is? It stands as it is for the moment. Whether or not we update it depends on our research programme. We haven't got any plans so far. Thank you. I'll move on now to Dean Lockhart. Thank you, convener, and good morning to the panel. My question has largely been covered, so let me ask a question about a number of different policy areas, because the evidence that we've heard today suggests that the matter or the question of gender pay gap cuts across a number of policy areas, education, social issues, the economy, public, private sector and childcare. I would like to get your views on other countries who have experienced the gender pay gap, but I would like to get your views on what best practice other countries have adopted in terms of policy or measures to address gender pay, whether you have seen best practice in other countries to address that. I think that the University of Stirling evidence looks at the Norway approach to quotas and suggests that that's perhaps not been massively effective. I would like to open it to the panel to see what you've seen in terms of best practice in other countries. The Norway approach, which has been emulated in a number of other countries since then, is to mandate that a certain percentage of corporate boards be made up of women. And because this was implemented a good 10 years ago, there has been evaluation of that policy that's been done. What's been shown quite robustly is that the policy was very effective because it was a mandatory policy of increasing the diversity on boards, not only in terms of gender, but also in terms of age diversity and experience diversity on corporate boards, which has seen to be a very positive thing. But there was no trickle-down effects of that policy, so it was not the case that it saw that, for instance, there was an increase in female representation in courses or even at different management levels throughout big companies. We looked at what had happened in Sweden and compared that with the UK and the USA, so the UK and the USA probably characterised by very free labour markets, fairly low regulation, and we've seen the pay gap narrow for both of them. Interestingly, in Sweden, where the pay gap is much less, it actually doesn't seem to have changed all that much in recent years. They have a lot of very progressive policies in terms of women's access to the labour market, but there still seems to be a reluctance—well, a finding that is similar to the kind of thing that we've been describing for Scotland in that having children has an important effect on subsequent levels of pay. That's one of the other exemplars that we've got. We looked at seven different areas in terms of how the gender participation in the economy could be improved. There were women in leadership, women in STEM, childcare and on-pay care work, women in entrepreneurship, women in politics, violence against women in social attitudes, and we looked at, particularly in women in leadership, we tended to look at individual company practices, rather than between different companies or between different countries. I can talk about a few of those, if that's interesting. To pick out a couple where we looked at where the UK differed from other countries, women in STEM is a really interesting one in that we have an awful lot of women who study medicine and biological sciences in the UK, but we have a very small number of women that study computer sciences and engineering and whatnot. That is quite unique in Europe. We do a lot worse in the UK than in Europe. We have girls dropping out of mathematical and science and technology subjects much earlier than in other countries. That's an area where there's potentially things to learn from our European colleagues. In women in entrepreneurship, that's an area where the UK has been doing reasonably well and we're ranked fifth in the world on the Dell global women in entrepreneurship leadership scale. There are still things that we could learn. For example, if we were able to match the rate of women in entrepreneurship as they do in the US, there is quite a substantial economic uplift that the UK could experience, so there's potentially things that we can learn from the US, particularly around women in entrepreneurship. Other panellists have spoken about childcare a little bit. What we would note about childcare is that in the UK, 33 per cent of incomes go on childcare compared to an OACD average of 13 per cent, and in Scotland it's a little bit less but not far behind. I think that there are things that the UK could perhaps look at in terms of encouraging equality of parental care from other countries, encouraging equality of parental leave and also looking at what can be done in order to make childcare more affordable for parents, and parents, not just women. John Mason I was to follow up Dean Lockhart's point especially about Sweden. I have to say, when I read the report, I was quite surprised that with the UK and US pay gap about 17 per cent, the comparable figure for Sweden is 14 per cent, which I was certainly surprised about. One of the lines in your report is that women are still concentrated in fewer occupations than men. That partly stems from gender-biased selection of school subjects. Again, I'm surprised. I thought that Sweden had—everybody is just equal in choosing the same subjects, but, clearly, they're not. Have you looked at that at all? So, we haven't looked at that within Sweden, but we did look within Scotland. This is following on from Emma's point. We see in Scotland that representation in STEM hires, for instance, is broadly equal until you go and drill down into the individual subject choices. I was very, very surprised to find that, for instance, mathematics is approximately 50-50. Then, women are heavily overrepresented—sorry, young women—heavily overrepresented in biology and boys are much likely to go and do physics. Given that these are facilitating subjects to university degrees, potentially, that leads to more young men taking engineering in university. In one way, the choices that young people are making at school—like at age 15, in so far as which subjects they are choosing—can channel them into different career choices. I guess that it raises the question about whether we should be allowing a choice out of STEM entirely at a certain level in school. That might be something that could be looked at. I also think that it's important to say that this is not because girls are not good at STEM subjects. It's an English statistic—it's not a Scottish one. Apologies for that. Half of boys with an A star at GCSE in physics will go on to do it at A level, but only a fifth of girls will. It's not because girls don't get an A star that they don't then go on to do physics in further education. It's that they're choosing not to. The girl guides did some really interesting research that showed that 80 per cent of girls say they have no STEM role models and 30 per cent expect that they'll have sexism in a STEM career and therefore why should they choose those subjects. There's definitely something to be done much earlier than when we get into the workplace to address girls' choices early in life. There's also a question of when these preferences are formed by girls. They're formed prior to making these choices. I think that one great idea is to make lego bricks in the colour of pink to encourage small children to be making things, and that might have an impact of them going into engineering. But what I mean by that is making these subjects more female-friendly. Until relatively recently, many of the economics textbooks were written very much with the examples being Fred goes to his local store, and that has changed in the last five to ten years, I would have said. With the uncertain subjects, you may argue that there are ways for them to be taught in a manner that is more accessible for young girls to peak their interest. Would that apply the other way around as well? I was at a visit to an organisation called Men in Child Care, and the feedback that we received was that it wasn't so much that there was a difficulty with men finding jobs in that sort of area, but more a lack of men coming forward to do that. What we were told is partly because there are very few male role models, for example in early years' education or nursery education. Would that apply both ways rather than just to women? Yes, it certainly could. I think that the Royal Society of Edinburgh has tried very hard to make sure that there are female role model scientists out there and communicating with educational establishment. It is certainly true that in some occupations men choose not to enter and probably for the same kind of reason, there is a lack of role model being possibly one of those that causes them not to go into that. There are very few men in the care sector as well. A couple of questions. One from Gil Paterson and then Ash Denham. I need to declare an interest. I have a 16-year-old girl who is just studying for her high as at present time, so my question is, who is it that fills the pipeline? Is it the school, the young person or the parents? That's an absolutely great question because at the moment I looked into this and I was actually surprised and pleasantly surprised by the number of programmes that were available in order to help young people choose the subjects that they were going to go and do. There seem to be, these programmes seem to be based in the different educational institutions, so in primary versus secondary and then universities do a lot of outreach. By the time young people are making their choices about their high as, it's potentially their preferences are already formed, so it needs to be done at a younger age. Whether that's primary school, whether that's parents. And again, role models and of course teachers are really, really important role models and training teachers to be clear about the opportunities that are available given the choices that pupils might make seems to me to be another area of policy that could be looked at. I think that there's also something about broader society, the depiction of women and men in media more broadly. How often do we see women experts or male experts on child care speaking in the media, for example? An interesting piece of survey research from the Forced Society back to your question, convener, was that 76 per cent of girls and 59 per cent of boys said that they would be interested in a non-traditional work sector if they were given the opportunity, which suggests that it's equally relevant for boys as it is for girls. You can't be what you can't see, so I think that the importance of role models in schools and by parents and also broadly in the media I think is really important. I'm going to ask about the unexplained component in your work, Dr Wilson and Professor Bell, and also about STEM, but I think that we've covered those two areas now, so if I could just move on, there's this idea about women returning to work after a break, maybe, having fairly high levels of education and experience and then opting to work part-time and probably below their skill and experience level. Can we put a number on that in terms of the amount lost to the economy by women persistently working below their skills and experience? I believe that the other written evidence may have, so they were talking specifically about that. I'm not sure whether there is a number assigned to that, so that's not something that we specifically looked at. However, the point made that women, when returning after a career break, are essentially not utilising their full talents or taking a job that does not utilise their full talents. It does imply a brain drain, so to say. There's an untapped resource there that could be more useful. To the extent that it appears, and we have a graph that looks at the reasons why individuals work part-time and overwhelmingly because they chose to work part-time, to the extent that this choice is determined not at an individual level, at a household level, that it may be socially conditioned or it may be, just for whatever reason, easier for one partner to return to the state in the full time in the labour force than the other partner to go in part-time. Historically, it has been and it continues to be that generally it's the mother who returns part-time. We make the point in the paper and there are very subtle things that we can't pick up either in terms of education or experience, but the point that we make in the paper is about commuting. The fact that women are probably, that evidence suggests, less willing to do a long commute, which means that the choices of jobs that are available to them are more limited, and then that will have consequences for pay and so on. The decision about the commute is almost certainly related to caring for children or other social responsibilities that they are taking on, which, as Tanya was saying, is a household decision. A couple of things that might help with that question. The IPPR did an estimate that said that if 300,000 more mothers with children under five worked, it could raise £1.5 billion in tax credits, so that gives you some estimate. That was the only estimate that we came across. I think that the point is well made about women's or family's choices. 29 per cent of women report returning to work post a baby is financially unviable, and when you have women earning less than men, then as a household it becomes a reasonably sensible economic decision to have the women forgo paid work if it is unaffordable for the family to afford both childcare and parents to go out to work. We will come on to a question from Jackie Baillie. I touched on this in response to Bill Bowman, but I wonder whether I could tease it out a little bit further. The reduction in the gender pay gap in Scotland is largely down to a decline in male earnings. First, is that true for the rest of the UK? If it is true for the rest of the UK, is the gap in Scotland closing by more than the rest of the UK as a result of an increased decline in male earnings, or is there something else going on? That requires me to go into the recesses of my memory. The gender pay gap in Scotland is somewhat less than in the UK. I principally put that down to the fact that, particularly among males, there are far fewer very high earners. The very high earners affect the mean, and a lot of comparisons are done using the mean. Another factor that we point out in the paper is the difference in the size of the public sector. I do not think that it is massively much larger in Scotland, but it is somewhat larger. It is slightly better paid. It used to be quite a lot better paid. It is only slightly better paid, and there is a concentration of women in public sector jobs. That is another explanation of the difference in the gender pay gap in Scotland and England. Public sector pay, having been held back on both sides of the border, is probably fairly neutral in terms of the gender pay gap. Our evidence shows a slight closing. We see that the difference between female wages between Scotland and the UK is 6 per cent in favour of Scottish women compared to women in the rest of the UK, whereas men in Scotland—this is the most latest figures—are paid around 2 per cent less than the rest of the UK. The gender gap is slightly smaller in Scotland, and women in particular seem to be faring better in Scotland, as compared to the rest of the UK. The thing about men is particularly around the lack of very high earners. I do not know if Emily Gibbs wants to add anything to that. I do not have anything to add. We did not look at this in particular. Can I then put two scenarios to you? The last published quarter's GDP figures showed negative growth. Indeed, some commentators have described it as being on the brink of a recession. Do you see the pay gap closing as a result of that, given that there is likely to be a further depression, certainly in male earnings? Conversely, if the economy grows, do you see the perverse outcome, which would be the pay gap widens? I am just curious as to how you would model those two scenarios. A principal cause, it seems to me, of the relative slowing of the Scottish economy relative to the rest of the UK over the last three or four years, is the decline in the oil industry. That is a massively male-oriented industry. As a result of that, you would probably expect the pay gap to narrow. In those circumstances, the economy slowing would result in a smaller pay gap. Another sector that is probably doing less well is the financial services. I am not quite sure, because that is much more gender balanced, what effect that will have on the gender pay gap. Again, I suspect that, at higher levels, it is still a male-dominated industry. Does that help? I suppose what I am driving at is the pay gap closing in the context of a slowdown in the economy is not necessarily a good thing because the overall economy has suffered. Therefore, the trick for us as policy makers is in the context of a growing economy, which is what we all want to achieve, is how you then close that pay gap at the same time. In many ways, that is the angle that we are coming from in saying, rather than how does the economy grow and how does that impact men and women, how can you use women's increased participation in the economy in order to help the economy grow by putting more skilled workers into the sectors and the parts of the economy where there are skill shortages? Richard Leonard I would like to follow up Jackie Baillie's line of inquiry in the sense that, in the public sector, we have had pay guidelines now for as long as I can remember anyway. I wonder whether that has played a part at the bottom end, where there has been, for example, accommodation for a living wage to be introduced, and whether at the bottom end that has led to a closure of the gap amongst those working people. I suppose that the first part of my question to all of you is what more could be done with the design of the public sector pay guidelines to further improve on the closure of the gap in the public sector. My second question is something that explicitly comes up in the Tanya Wilson-David Bell paper, which is about the Scottish business pledge, which is a voluntary mechanism, of course, but it contains moral suasion, I think, is the expression that you use, which takes me back to my economic stage at Stirling University. It talks about a voluntary principle. If there was a tougher regime or some kind of conditionality attached to help from Scottish Enterprise or access to regional selective assistance or inclusion in public procurement, is the scope there to use that as a lever to try to put pressure in the private sector to close the gender pay gap there? I'll just answer that last point. The Scottish Government was making some assistance conditional on meeting the business pledge. It's an interesting point about public procurement, because that's an area that may well emerge after the first part of the Brexit deal is done when the trade negotiations are in full swing. Public procurement will probably be one of the areas that we'll be looked at in any trade deal that we do with the States or with Canada or so on, so then a question may arise as to what power to influence the shape of public procurement might exist post-Brexit. Sorry, that was your last point. Just on the public procurement point, we looked at the impact that Government preference for SMEs had had in increasing the number of SMEs that are taking part in public tenders and so on, so we did have a question about whether or not there was an opportunity to encourage more women entrepreneurs and women SMEs through guidelines related to public procurement, so that could be quite an interesting one. The other area that we would say in terms of encouraging progress in the private sector, we talk a lot in our report about the need for targets and public reporting against targets. Those targets might be set by the companies themselves, but there is something very powerful about saying, this is what we're going to do and we're now going to transparently track against what we're going to do to ensure that we're making progress, partly to ensure that you make progress and put some focus on it, but also partly because that focuses the mind on what's really working and measuring what's working and therefore increasing investment in the things that are working and not just carrying on with lots of little things that might not be working but you're just able to say you're doing a lot, so I think that's an area that we think has a lot of power and again you see with something like the Davies report where you had a particular target for the number of women on boards, that did actually have quite a big impact in terms of the shift in the number of women on boards, so there is a role for that kind of setting of targets and reporting against them. In terms of your question about the public sector, what our research notes is that the public sector is one of the few sectors in the UK economy where women are well represented throughout the pipeline of seniority, so in many respects we are looking to the public sector to say what has the public sector done that the rest of the economy can learn from in terms of being able to have lots of women coming into the pipeline and then keeping them in the pipe and progressing them through to senior levels. Some of what we see that the public sector has done has been very good on flexible working schemes, not just introducing them but making sure people take them up and that they don't have a penalty for doing so, making sure that men and women can take them up equally so that flexible working becomes another women penalty but rather it is something that is there for both sexes to benefit from and to enjoy. We also see that there is very good progress in helping people with breaks from work, returning from work and what not. From our perspective there is a lot that the rest of the economy can learn from the public sector. I was going to add that there is legislation that I believe takes place from April 2018 where large firms are going to be required and this is large firms with over 215 employers are going to have to report a number of statistics each year regarding their pay so the gender pay gap at the mean and the median as well as in bonus pay and the ratio of males and females receiving bonuses and in so far as Emma was saying having these statistics available and having greater transparency and having targets is a great thing. These ones are the ones that firms are required to provide. There is the case for saying well instead of just looking at the gender pay gap at the mean at the median we will just look at it at different career points at entry level, at mid-management, at upper management to ensure that this pay equality is achieved throughout the career progression and also by making transparent what policies are being undertaken to ensure that the promotion from entry level to mid-management level are broadly equal between both men and women. These type of policies do not require legislation but can be done within for instance the business pledge on a voluntary scheme. Are the type of policies that might actually gain traction in making substantial improvements? That is a very optimistic view of transparency as the disinfectant that will flush out all these inequalities. Will it be possible for you to share with us some of the examples? The evidence that we have heard this morning suggests that there is an issue around women taking time off for maternity reasons and returning part-time and therefore having lower wages and less access to career opportunities. If you have got examples in the public sector that you have harvested it would be really useful for this committee to see examples of that. We did look at the NHS in a bit of detail so I would be happy to share that with you. We also have some good examples of where private sector organisations have taken some quite bold steps and particularly in STEM, interestingly, a couple of big firms that have taken some really good steps to improve not just getting women in the bottom of the pipe but progressing them all the way through the pipe. I would be happy to share those with you outside of the committee. Has there, in those examples, been any analysis done on the effect that it has had on, for example, profit making companies on the bottom line and how it has improved? We find it very difficult to come up with examples of where it has improved a business case because I think that it is really important in encouraging other businesses to voluntarily take those measures. Yes, absolutely. You will not be surprised that we look at that quite a lot because, obviously, that is something that our clients are interested in. The research that we most recently did was in our diversity matters report, which was released in 2015 or the beginning of 2016. In that, we looked at Europe and we also looked at the US and the UK. In the UK, what we see is that, for a 10 per cent increase in gender diversity on an executive board, we see a statistically significant correlation with an uplift of earnings before interest and taxation of 3.5 per cent. Previous research that we have done has shown a correlation between increased diversity in boards and increased diversity in senior management teams and total return to shareholders. In this piece of research, we were able to demonstrate a statistically significant increase with earnings before interest and tax when you increase the diversity, particularly of the executive board, which is really compelling, honestly. It is really compelling evidence. Again, I would be very happy to share a copy of that research with you. When we looked at it, it was not just that it was a global figure that was specifically for the UK, so it is something that we can prove for the UK. In terms of the Norway case, where I spoke about earlier, there has been certain research that has done that has looked at the profitability of firms after the quota was introduced. There was no significant impact on firm profitability or market share, so there was no adverse effect, but there was no large improvement, but there was definitely no adverse effect of diversifying the corporate board. I also think that it is worth making a distinction between the executive committee and the board, because we often talk about the board. That is an area where we have made an awful lot of progress, particularly through the David's report and what not. Executive committees typically have. At the moment in the UK, we have 25 per cent of boards are women, but 17 per cent of executive committees are women, so it is lower. In our research in diversity matters, we saw a stronger correlation between women being on an executive committee than we did on the board. There is plenty of other research that shows a correlation, not necessarily in Norway, but in Europe that shows a correlation between more women on the board and better financial performance, but particularly in the executive committee. We have seen this statistical correlation. The board is only one aspect of a company. Are you looking at the profitability of a company where there has actually been gendered mechanisms put in place to encourage diversity throughout the entire organisation? Diversity matters, we looked at the executive committees and the top leadership. Across the whole sample, I think, we looked at about 5,000 different leaders across organisations. Again, I can share the research with you afterwards. We did not penetrate all the way down through an organisation because we were looking at publicly available data, and a lot of that data is not available. However, what we have done in our women matter research—again, I can share this with you—is look at—we have surveyed data of organisations that are implementing lots of different initiatives and we look at how many women they have in their senior executive positions and on their boards, and we put them into different quartiles, and then we look at the relative financial performance. There, again, we see that those who are in the top quartile, in terms of the number and the extent of the initiatives that they have put in and the nature of the initiatives that they have put in and their performance in terms of having women in their senior management and having women on their boards, we do see that those in that top quartile perform better financially than those in the bottom. Again, it is a correlation. It is not a causation. There are a number of reasons that we can hypothesise, if you like, about why that correlation exists, but that is quite a strong measure of not just at the top because you are absolutely right. It is not just about the top, it is about the pipeline all the way through, rather than simply parachuting people in at the top where you maybe do not have a very good pipeline yourself. That would be really useful to look at that. Yes, we can share that afterwards. Right, thank you. I have a question that I want to ask, and this goes back to the, I think, possibly the University of Stirling research, but no doubt Emma Gibbs will have possibly a comment to make as well. It is about the difficulty of equating reduction of gender pay gap with greater economic growth, and indeed this follows on from what Gillian Martin was asking about. Professor Bell, you have already alluded to this in terms of if a meal is prepared at home, it is not taken into account in the data if it is done in a restaurant than it is. I am just wondering if I could add to this slightly. I am a member of the cross-party group on volunteering, so there are lots of people in Scotland and other countries that do voluntary work for which they are not paid in monetary terms in the third sector, and even on a private level, many individuals will undertake caring responsibilities within the home and so forth. None of that is necessarily accounted for in economic data, and sometimes it is not about simply transferring. I think that we talked about transfer of workers and so forth previously, but an example from my own professional experience in the courthouses across Scotland, we have people who serve tea and coffee to people who come to the courthouses now. Historically, those were colloquially referred to as the tea ladies because mainly it was women who did that as volunteers, although it was not just women, it was also men. My understanding is that now those people are paid rather than being volunteers. Effectively, the same thing is being done, but the individuals providing the service are now paid in monetary terms, so they would now come within the statistics, whereas historically they did not, but there is no difference in terms of the work being done. Of course, many women or women have always worked and worked very hard, but it did not mean that they received a salary in terms of waged employment or money. How does this fit together in terms of looking at the economy? I guess that your argument would be helpful to those who would suggest, and I probably agree, that GDP does not measure everything. We should not focus entirely on it as a measure of our economic and, indeed, social health. There are areas in which the interaction of unpaid tasks and paid tasks is nevertheless very important, and one that you alluded to is unpaid care. We have done quite a lot of research on this. I have gotten about half a million unpaid carers in Scotland, mainly women, but not entirely women. The fact that their activity gets no credit in terms of annual GDP, but we are given that the need for care is likely to increase in the future, particularly concerned about whether there is substitution between paid care and unpaid care, just as in my example I was talking about substitution between a meal in a restaurant and a meal at home. The fact is that, if all of the unpaid carers decided no longer to provide care, the NHS and the social care system in Scotland would be in deep crisis. There are various ways of trying to value the provision that unpaid carers make, and I am happy to supply you with details of that. At the end of the day, what this suggests is that focusing just on GDP as a measure of economic health is inadequate. That is why we have seen a lot of attention given to alternative ways of looking at national wellbeing being one of them. Gusford Donnell, in the Cabinet Office, has done a whole lot of work on that. Those measures are somewhat more fuzzy than GDP, in which there are many, many books that explain to you how to calculate GDP in a particular country. Nevertheless, it should not be seen as the be-all and end-all measure of economic and social health. Just to follow in on what you are saying, what someone has paid in monetary terms is something that we can quantify. It is understandable that people try to focus on that, at least to a certain extent. Of course, that is the fair work committee, so there are other factors that come into play. I wonder if there is a question about the desirability of focusing purely on an economic, monetary factor and numbers. I am not criticising economists for focusing on numbers at all, and I understand that you approach things from a certain way. I wonder if you would accept that there may be a question about the desirability of focusing solely on numbers, particularly if one is going beyond what Dr Wilson was talking about, the question of equal pay for the same work and going beyond and looking at overall lifetime calculations of pay. I would not use the term numbers, but I would use the term markets. What GDP does is that it is quite good at aggregating up all the activity that we have in markets, where prices are paid and exchange takes place. What economists do—I do not want to undermine my profession—is spend quite a lot of time on trying to value things that are not traded in the market. That might be things to do with the environment, with caring or whatever. It is not to say that economists are unaware of that, and it is an extremely big issue. There is a lot of debate going on within economics about the extent of the focus on measurable stuff. Many economists in the city do not think of anything else but measurable stuff. However, a broader view of activity in the economy has to take account of the kinds of activity that may not be traded in the market, but nevertheless is valuable. We would agree with that. One of the things that we note in our report is that we do not put a figure on unpaid care work that people choose to do. That is an enormously important aspect that is difficult to measure, which is why we do not measure it. There are a couple of other things that I think are interesting to the debate, which you can measure that are not monetary. Our recent research did a survey of men and women in the workplace across Europe, and it showed that women and men have equal levels of ambition for promotion—getting to the next level or getting to the top of their organisations. Women are half as likely to believe that it is possible for them to get there, which is an important measure of aspiration on people's sense of being able to fulfil their aspirations. Equally, a third of men and women feel that their careers are going to interfere with their life as parents or their roles as family, their roles within their families or their outside interests. There are important measures about the quality of life and how it pertains to men and women in their working environments, in their professional lives and in their personal lives. That plays to your point that it is not just about GDP numbers. There are also some really important issues in this debate, which are about personal fulfilment, both in work and outside of work. Perhaps I will come to Dr Wilson, because I think that you possibly touched on this. I am just wondering about the concept of extra hours worked, which are not necessarily the contracted four hours, so one might be on a contract for 40 hours. I think that probably in a lot of workplaces what one does in addition to what one is contracted for may have an effect on promotion. I am just wondering how that has brought into the equation, because many women and many men obviously work hours beyond what they have agreed to in terms of the requirements of their workplace, particularly probably in the private sector. I am just wondering how your data or your approach to this captures that and how that can be brought into account and how that plays, interplays, with all this. I wrote a paper many years ago with a colleague Bob Hart on paid work. The Labour force survey asks people what their contractual hours are and how many hours they actually work. I think that the situation is trying to recall that men work more hours. Your rationale for doing this might be the correct one. It is that they want to signal to employers that they are ready to be promoted. We went to Germany and presented this paper, and they could not understand what we were talking about because they do not do unpaid work. Work and non-work—this is true of many continental countries—are clearly defined. In the UK, we have let work slip into a much larger proportion of the week, and we justify doing so for all kinds of reasons. We just do not take this hard line of saying, okay, I am finished at five o'clock, I am off to play a game of golf. That is a pretty important distinction that has certainly got implications for the gender pay gap, it seems to me. Is the culture here in the UK somewhat different from the way that working hours are regulated? We pick this up a little bit when we talk about women and networking and women and sponsorship. Quite a bit of this extra work is to do with building those network relationships and those sponsorship relationships, which help you to move through an organisation. Women are just not as adept at making those relationships and making those sponsorship connections on their own than men, and they have been shown to be really critical to advancement and promotion. One of the areas that we certainly talk a lot about is how you get women more into managerial and leadership positions, particularly in light of caring responsibilities, but also career breaks and whatnot. We talk about how organisations can help to make sure that women have those sponsorship and network connections that they might not naturally form. Indeed, how can you create a culture within an organisation where it does not need to take place always out of hours for either men or women that you can create those connections within the organisation during work time that will enable people to advance? Perhaps I could come full circle then. In those other countries, is the emphasis perhaps less on money and more on the general work package and therefore a different culture? Is that part of it possible? I recall recently, and it is a mere recall of a newspaper article about how work life balance in Denmark is much more favourable, but there is clearly a time for work and a time for other things much more so than is the case in the UK. That felt to be one of the causes why Denmark is always close to the top of the world wellbeing scores in terms of how happy people are with the way that they are living. I do not know if Dr Wilson would like the final word here today perhaps. No, I am fine. I do not have anything more to add. That is fine. Thank you very much to all of our witnesses today. I will suspend the session to move into the second panel. Thank you for coming in. Well, good morning and welcome back to this meeting of the Economy, Jobs and Fair Work Committee. For our second panel today, we have two people. First of all, Charles Cotten, who is the policy adviser of pay and reward industry on behalf of the Chartered Institute of Personnel and Development. Secondly, Maggie Morrison, who is vice president of the public sector, CGI Scotland and a board member for, and I think he representing the Scottish Chambers of Commerce. Welcome to both of you. Thank you for coming in today. We will start off with a question from Gillian Martin. I was afraid that we were going to say that. I am just looking for my question. Right. Give me a second. I am ready. We have been asking everyone that has come in front of us about statistics. I wonder if you both give us your opinion on whether we have got a defined set of agreed statistics on female economic activity in Scotland that you can draw any conclusions from? Well, I suppose that it depends on the questions that you are asking, so I don't think that you can rely on necessarily any one measure. The median figure, as you have probably heard in other evidence, can be seen as more representative because it is what people get whilst the mean can also be seen as representative in that it kind of takes into account people at either extremes of the pay distribution and women tend to be at the lower end whilst men are at the higher end. So, as an organisation, the CIPD has an agenda pay gap of around 14% at the mean and 7% at the median, which shows that we have a skew towards the higher end for men. If our chief executive was to become a woman, then the mean would fall from 14% to around 7%, so it shows you how those figures can vary. Obviously, there are other statistics or data that influence these statistics, so, for instance, how children are encouraging certain careers at school. I read the latest survey from the Halifax Building Society, which showed that boys get 13% or more in terms of pocket money than girls in the UK, and there's been research carried out in the states that looks at identical products, which are marketed to men and women differently. So, things like shampoo can be 48% more expensive for women to purchase, even though they've got similar ingredients, whilst shower gel and other similar products can cost as much as 56%. I'm not suggesting you perhaps go to your local supermarket and start buying things from the men's section, but it would be quite interesting to see why there are those kind of variations as well. It's not just what's going on in the workplace, but it's also what's going around in why this is society as well. I'm smiling because I'm thinking about the amount of money that my daughter extracts from me. I'm now repackaging that my head is how I'm doing her bit for feminism, because she certainly manages to extract an awful lot more than me and her brother does. Maggie, have you got any thoughts on that? I don't really have any specific statistics, and I don't think anything that you wouldn't have heard already, like women taking on 76% of care responsibility, more likely to be in low-paid, low-skilled jobs and fewer women in the sector. I work in my day job in IT and technology, but I don't have any specific statistics with me. The CIPD is doing more work on the EHEHRC and maternity discrimination, and I wonder if there is an opportunity for you to discuss how that is going at the moment and what you are looking into there. Well, we are supporting the campaign, perhaps in surprising what we've got, both us being the moral case, we believe that it's the right thing to do, but also as a profession, 70% of our members are female, and we are using this as a route to kind of help them challenge perhaps assumptions or misconceptions among male colleagues in their organisations. Sometimes businesses can get so focused on focusing on things like the business or profitability that sometimes they forget well, that the people within the organisation are the means by which they achieve these ends. Therefore, if you are inclusive and try to meet their needs as much as you can, then that can bring benefits to the organisation as well. There is quite a lot of anecdotal evidence from women who speak to most women who have a children and they'll have stories around how they feel that they have been discriminated against when they may be either they came back to work or when they actually divulged to their work that they were actually expecting a baby to have to take some time off. How are you gathering that kind of evidence around that so that you can tackle all these issues that might not actually be on record, but certainly are the experience of an awful lot of women? Well, we have been doing research in, well, working with SMEs in the city of Glasgow, helping them deal with HR issues. They don't, obviously, being small and very small, don't have the HR capability themselves. So we have our members who are helping them with that and kind of explaining to them that just because a woman falls pregnant doesn't mean that the business is going to kind of come to an end and that actually you can start thinking flexibly about how you deal with that and how if you are able to show commitment to those individuals and they're going to show commitment back to you as an organisation. So I think, again, it's, as I said earlier, challenging the conceptions and misconceptions around what the impact is going to be and just encouraging our members to show organisations the importance of treating people who do become pregnant fairly and especially now. It's not necessary, you know, the assumptions it always has been that it's going to be the women who take the time off, but increasingly it's now men and you may have a gay male couple who are now going to be thinking about which one of them is going to be taking time off to if they adopt a child. Quite a lot of this discrimination is actually subconscious. Yes, yes. And so what are you doing to your members to actually get them to identify maybe where they maybe have subconsciously discriminated and that has an effect on... Again, it's trying to kind of raise awareness about, you know, the issues you said about, you know, the problem about subconsciousness. You're not always aware of it. So you're kind of trying to raise awareness of why you may have these kind of feelings and what you can do about them. But obviously, you know, it varies not only by, you know, by size of organisation, but it can also vary by sector. Are you able to give me any examples? I'll have to get back to you on that, yeah. Okay, thank you. No question from Jackie Baillie. We'll be aware of the forthcoming pay gap legislation. I'd be interested in your view on it and whether you think that will actually have an effect and close the pay gap. I think it's very positive. You know, I think it's a welcome first step in achieving a degree of transparency on what's going on. And I think we touched on unconscious bias there. A number of organisations do carry out unconscious bias training because on the previous question, I think it's quite difficult to collect statistics on what is essentially a missed opportunity because you were discriminated against because you were a female or you weren't. It's not even, I find, women who become pregnant. I have seen it happen where a woman has been passed over for promotion because she's of childbearing age and might become pregnant and leave the business. So I think that makes it all very difficult. Also, in this area, I don't think organisations sometimes where there is a bias in pay or promotion or bonus actually recognise that. And I think that this legislation, while it's not, the whole answer is a really welcome first step because I actually think that some organisations might be surprised themselves when they look at the data that's produced. Yes, the CIP welcomes the legislation. I think what's going to be important is what organisations do about it. Are they going to have an action plan in place? The thing about the gender pay gap is that whilst it identifies issues internally within an organisation, it also throws up issues that are external as well. So why aren't potentially women going into certain professions and joining the organisation, the issue around affordable childcare? Those can often be outside what an organisation identifies as being so that they can deal with. That said, there's a thing to stop organisations clubbing together with similar ones to go out to schools and try and encourage people to go into what's perceived as being historically male-dominated professions. And similarly, it's not just about getting more females into male professions but also more males into female professions as well to break down those stereotypes. And also around the language as well, I think that's going to be important as well. When employees start looking at the gender pay gap, they're going to know what's difference between the mead and the median. Is the employer trying to confuse us? Is there some kind of hidden agenda there? So I think it's also going to be quite important about how organisations and also government explains why there are these different measures of measuring the pay gaps. Some of my colleagues will explore the policy areas with you later. I just want to whom in on the pay gap legislation just now. I'm conscious that the Scottish economy is typically driven by small to medium-sized enterprises and therefore they fall below the threshold of 250 employees. I welcome an assessment of how prepared you think employers are currently that have over 250 employees and whether you'd welcome an extension of this reporting to small to medium-sized enterprises as well. I would because Scotland, I can't remember the exact percentage, but it's 98. something per cent SME of that order and so I think it would be helpful to extend that to small to medium businesses. I'd also like to reinforce Charles's point on the stuff that affects this, that organisations don't see within their remit necessarily such as childcare. If the agenda pay gap legislation had come in about 10, 15 years ago, it would have been far more challenging for organisations because they wouldn't have had the information capability to generate the information that is required now. I think many companies should have the information systems in place. We also had something called reporting. Payers were earning real time, which means that a lot of organisations had to clear up their payroll data anyway. I think many of them should be able to do it relatively straightforwardly. Smaller organisations, there could be a challenge for some of the smaller ones if they don't see the business case or why they should be doing it, but I think if they start to see that larger organisations are doing it and it's not causing them problems and there may be actually benefits from doing it, then they may see the benefits as well. What we should be doing is encouraging smaller organisations to adopt agenda pay gap reporting as well. Over time, we will review this and see whether there are requirements for legislation to be introduced. If you go to a certain level of size, you may have issues around data protection and privacy issues, but that would be to a very small level. I want to ask a question about what is called the enterprise gap in Scotland. That probably comes from a research by Professor Sarah Carter at Strathclyde University who suggested that a female business ownership equaled those of men. That would equate to a 32 per cent increase in Scotland's business space. I am just wondering if you could comment on that, because if one thinks of increasing the number of businesses in the country, would that generate new business, new work and is that something that, whether you are the organisations that you represent, have thought about how that could be encouraged? Not from the Scottish chambers perspective, I need to take that away and come back. We have looked at the issue of encouraging more female entrepreneurship. Again, it can be issues outside as well, which causes the challenge. If you are in the rural area, you are going to be limited by Princess Broadband's speed and communication issues, which may limit your ability to set up your own business there, not necessarily whether you are male or a female. Thank you and no complication from Richard Leonard. Thanks, convener. I am sure that, like me, every January you rush out to buy the Scottish business inside a top 500 magazine. If you do that, like me, you will understand that only around 1 per cent of the large companies operating in Scotland are run by women, that thing that is women enterprises statistic. Do you have a view on that? Do you have any sense of the reasons that lie behind that that you could share with us? I think that a lot of this comes back to the fact that the industry that I work in, a lot of it comes back to the fact that those industries are dominated by men by a specific corporate stereotype for want of a better way of putting it. As long as that is the case, it is not just about encouraging women in my case into STEM. For example, once you get them there, you have to keep them there and have them flourish in the environment in which they find themselves. Listening to the evidence earlier, I am very supportive of mentoring and sponsorship because I do not believe that women are not good at these things. I believe that it is more difficult for a woman to do that where the natural networks are male networks. I think that is part of the problem. I think that all that you are seeing in terms of the leadership of big organisations in Scotland being mostly male is that those organisations are mostly male. That is what is happening. We need to have some fundamental change in bringing young women in, encouraging them to stay, supporting them, sponsoring them and making sure that we can change the gender balance. The CIPD is supportive of there being more women on the board, not only at executive level, but also at executive level. For organisations to think about how they recruit people into an organisation and then promote them up. Again, it is round things such as mentoring programmes, coaching programmes, childcare, again flexible working arrangements that need to be taken into consideration. Again, it is just challenging, as Maggie said, assumptions. In the 40s, 50s and 60s, IET was predominantly a female industry. Of course, now you could say that it is predominantly male. There is one facet of large corporate Scotland that I wonder whether it plays a factor or maybe does not. I can take the point about some of those dominating industries such as oil and gas and financial services. I have got quite a lot of men at the top. One of the features of the Scottish economy at the large end, especially, is the extent to which it is externally owned and the extent to which it is overseas owned. Therefore, the extent to which decision making is not necessarily taken here. Do you think that that is a factor or not? I do not think so. I work for one, for a company that is French-Canadian and based out of Montreal, but they still need leaders in country. I do not think that some of those organisations will be more centralised than others. CGI is very matrixed, so it is run like a satellite operation, a satellite business that has to take care of its own profit and loss. Even if that were not the case, I do not think that that makes a difference in whether you appoint a man or a woman to lead unless there is something in the home HQ that is reinforcing the idea that there are going to be more men appointed as leaders. I do not think that it really is a factor, though. I take the point that you are saying that it should not make a difference. I guess that my question is, do you think that it does make a difference or not? I do not think so. I genuinely do not. It is not something that has been wrought to our attention. As Maggie said, you still need somebody to be in charge of your locality, and why would you want a man over a woman? Following on from Richard Leonard's question, I guess that the next question on that would be that, do you think that there is enough funding and support for women-owned businesses, maybe starting up or progressing through the enterprise network in Scotland? I do not know that I can properly answer that question. The Scottish Chambers does a lot of work while, as far as I am aware, I am not specifically around increasing the number of female businesses, which is where your question is coming from. The chambers do a lot of work in mentoring and support together with Scottish Enterprise and Women Enterprise Scotland. I am not sure whether more funding would help or if part of the answer is providing the right support to those women through mentoring and sponsorship so that they can see and become role models that it is possible to be a successful female entrepreneur. That is another issue that we have not touched on yet. Women will be encouraged by seeing more successful women and perhaps more funding and support could help that. Yes, I agree with what Maggie has said. To some extent, it is around giving the encouragement to go with your dreams. There may be issues of infrastructure where it may be more challenging in certain areas to set your own business up. In the first instance, it is giving people the confidence. Bill Bowman. Thank you, convener. We might have touched a little bit on that earlier question, but do you think that companies see gender diversity as a high enough business priority? Maybe, depending on your answer, do they perhaps see components of it as important, but do not put it all together into gender diversity as a concept? I think that for gender diversity to be really important to an organisation, it has to be really important to the leader of that organisation. I do not think that is always the case. I think that the organisations that are successful in terms of increasing female participation and increasing female representation at the highest levels have leaders for whom that is really important and leaders who will make it clear that it will be part of the fabric of the organisation, of the performance management of the organisation and really measure it. I think that I graduated in 1983 and if you had told me in 2017 that the number of young women entering STEM as a profession would be going backwards, I simply would not have believed that that would be possible in 2017. Also, if you told me then that there would have been not much progress on gender diversity in organisations, I would not have believed that either, because I graduated thinking that things would change. I would not have agreed with quotas and targets then, I do now, and the reason I do now is that I have watched not much change in the last 34 years. If we continue at this pace trying to do what we have always done, I do not think that we are going to see much change and I think that leaders really need to lead from the front and believe it, otherwise it is just a lot of talk. Hopefully, the requirement to publish gender pay gap data will act as a catalyst among many leaders to realise the importance of this issue. Either from a moral perspective, it is the right thing to do. I would not want my daughter or my sister or my mother to be treated this way, or looking at the business benefits that have been talked about previously about how more diverse organisations can be more successful, or the risk to the reputation of the organisation. If you are seeing as being a firm that is unfair, you are going to struggle to sell your goods and services and you are going to struggle to recruit and retain the talent that you require. I know that tone from the top is important in any organisation, but do you get the impression that there is not now an importance given to this, even if things you do not think have changed? I do not think that things have changed and I think that you can pick out the leaders who are perhaps not just paying lip service to it, because I think that it is something people talk about a lot, but look at the organisations where there are leaders leading from the front who are really committed to this and making a difference. It is a cliché, but I also think that it is true that organisations become a reflection of their leaders and we do not have enough leaders championing this, who really believe in it. I think that it is important for the tone to be set at the top, because it sends us powerful message throughout the organisation, but the challenge is that many initiatives at the top do not get fed through properly, so you may have line managers who are resistant to offering female returners flexible working arrangements to deal with childcare issues or elder care issues. Again, if an organisation is going to put itself forward as a champion of diversity inclusion then that has to be pushed through the entire organisation and you need to spend money on communicating to employees what is being done and why and actually be prepared to put your money where your mouth is by recognising and rewarding appropriate actions through salary increases and bonuses. I take it that we would apply the other way around, for example my own profession. I think that Charles Cotton referred to IT for example as being one way and then the other if I can put it that way. The legal profession is perhaps an example of things going the opposite direction where now it is majority female in terms of the solicitor's profession and the trend upwards is it where in the sense of increasingly female. I take it or perhaps comment on the difficulty that appears to rise where professions become or what is it that causes that, that professions move in one direction or the other, whichever way it is and how does one approach that dealing with that? Well in the CIPD about 70 per cent of our members are female and we are actively working to encourage more men into the profession. If you went back perhaps 30 or 40 years ago you would have had more men in the industry because HR was associated with industrial relations and but that has kind of moved but in my area there is that in paying benefits again that traditionally has been more male dominated so even within certain sectors such as as you said legal there may be areas where there are more men and other parts where there are more women so it's a case of trying to work out. Why is that is it because certain sectors some parts of the profession offer greater opportunities in terms of allowing women to balance work and life and if so why can't those elements be put into other parts of that profession as well? Well I'm just curious you're coming about the legal profession you've found for women being in certain parts it's just that the the trend now is towards a female profession and for example the solicitor's profession which is the primary part of it and in terms of law intake law students it is overwhelmingly female so moving forward the trend is liable if that continues to continue but in other areas as has been pointed out it's you know towards having all male or predominantly male and I'm just wondering is that a factor if one has that happening is that something that can be addressed avoided is it a problem what do you take on that because it seems to be a theme that has appeared in a variety of areas whether the balance is one way or the other and I'm just is there any comment that can be made on that? I think it's a very complex issue so I think part of the issue is a loss in focus on vocational education. I think that the IT industry is an industry that moves very quickly and there isn't a good awareness amongst parents and even career advisers and teachers in schools as to what careers in the IT industry might look like so I think that's an issue as well. I think often parents will still encourage their children into the more traditional professions because they don't know what what the jobs in IT look like and what kind of career opportunities that can offer and we seem to have done something that's turning young girls off science and STEM in general so Accenture recently did a study of 4,012 year old girls and their parents and aged 12 they had decided that IT was for boys so something's happening in primary school that's long long you know before you're making your subject choices to go on to further or higher or vocational education and that certainly seems to be what's happened in IT and it hasn't happened with IT or STEM all over the world so it's not true in the developing world it's not true in places like Russia where they're very successful at encouraging women into STEM it is however true in the UK so I think we need to talk teaching disciplines like coding in primary school and that can be fun I mean we have just done some work with 12 primary schools in Edinburgh and part of the issue is the teachers aren't confident teaching so the teachers aren't confident teaching that's not going to work so we've taken the primary school teachers and the kids are primary school children learning to code by playing snakes and ladders one of them wrote an algorithm because they felt the teacher's desk was too untidy so they wrote an algorithm for the teacher to keep his or her desk tidy and I think people are a bit scared by it but actually young children can learn just by playing and then I think A I think it's a life skill now I don't think it's just for the IT industry and and B I think that opens a whole lot of doors and even if you don't go on you know to to pursue a career in that area computational thinking is all about problem solving so it's a useful skill to have anyway okay come now to a question from Gil Paterson my daughter last night is strange isn't it and I wondered when it comes to gender diversity and boards and 2020 target for a 50 50 split if that's likely to happen in your view I think it's going to be challenging but I mean I think we should have challenging targets because if we don't hit them hopefully won't be too far away from where we're trying to get but I think also you have to kind of look at the composition as well I mean if you get 50% at the top and 50% that doesn't kind of you know that's if you get to all the men at the top and all the men at the all the men at the bottom then that's not going to be appropriate what you need is to make sure you've got the split as much as you can throughout the organisation so let the CIPDR senior leadership team is 66 female which is reflective of overall overall of our workforce which is 7 female but it has kind of taken some time to actually get to that level I think it will be very challenging but I think it's still a word they go and I you know I'd rather go for something aspirational and fail than then go for something that was less ambitious just think we need to do something then with if you're not entirely confident need to do something with legislation or is that in the long term unhelpful again it depends how it's sold I mean I think the challenge is if you bring something in which is then seen as a administrative burden by organisations then there's going to be resistance or tokenism or it'll generate potentially into a tick box exercise what you need to do is kind of win the hearts of minds and you can do that by either saying well you know this is the right thing to do would you want your you know daughter or sister being treated like this or here are the business benefits or here you know this is the risk to your reputation if you don't kind of do something along these lines so therefore if we're optimistic and we get to that goal or near enough that what benefit do you think the question you raise yourself in regards to gender balance and boards well that's all very well it would sound how does it impact further down the the food chain do you see that being a major driver to assist women through some of the stages in their development knowing that by and large it looks as if women are the people that take time off for very good reasons but of course it's it's it then brings forward a barrier for progression do you see if we have more women understanding what these necessary breaks are at this time you know can you see influence in something I think you know what when it was one of the the previous people giving evidence said that women have the same aspiration but think they're half as likely to succeed and I think seeing more of a gender balance in on boards would show a younger woman coming through that it absolutely is possible and so I do think it would have a positive effect and I think it would just change it changes the chemistry of the board our members have been working in the Manchester area with carers either child carers or elder carers who have returned looking now to return back into the workforce predominantly most of the people are women helping them with the skills that they will need to kind of go to interview but also trying to challenge their assumptions and misconceptions about the types of jobs that they should be going for you know you don't have to go into well if you want to you know retail and hospitality because they're for part-time jobs you could think about other types of career opportunities as well and trying to kind of expand and raise their awareness and you know that that cycle seems to be working and maybe if I could go to the other end of the spectrum finally a convener talking about the top end and probably mature women I would think so when it comes to the actual pipeline and I posed that question earlier on where do you think that how is the pipeline filled is it filled by young people themselves or is it the schools that I've got the big influence or is it the parents parents are huge I mean a huge influencers so and that's why I think we probably part of the reason we haven't solved the problem I think it takes government parents schools further and higher education and business itself to get involved to solve this I don't think there's one answer I think if there was we'd have found it yeah I agree with what Maggie you can't kind of rely the government can't do it all on its own no can employers no can schools you've got to kind of collaborate together you need some kind of overarching strategy with targets and ambitions and flowing from that policies and practices thank you move to John Mason okay well following directly on from that then the could we use procurement perhaps both local and central government obviously put a lot of money out to contract or to the private sector should we be thinking more of trying to put pressure on people want public sector contracts to have to sign up to more on issue of gender equality well it's public money and I'm sure the public want to ensure that their money is being spent on on employers that have fair employment practices I know there are always legal issues about what you can and cannot do when you were writing your contracts but I don't see why government as a buyer I mean other buyers have you know influenced by these decisions as well as well as as being an employer you know being a good practice employer encouraging right practices among the employees that it has and its own organisations I would agree I think it depends it's important to get the balance right so that it doesn't become really onerous I spent a number of years working in North America and lots of things are written in around not just gender diversity but all sorts of diversity so I absolutely think that it would make a difference however it's getting that balance right between it being a positive kind of a carrot stick effect and it not just becoming really onerous for organisations to bid for public sector business but I do think it would make a difference I mean mr cotton you said there was kind of rules around contracts and I mean I'm not in favour of brexit but do you think there's a possibility that if we have brexit that that would loosen that up and give a bit more freedom to government well I'm obviously not an expert in the in European contract legislation and what HL but I mean often one of the explanations for the reason why there hasn't been government intervention in this area are that there are rules around this but again it depends on you know what type of brexit we have if we have closer working relationships with Europe we may still have these this legislation as well but I'm not speculation it's not really of my area of my expertise okay and then well my final question I think then would be are there other things the government should be doing or parliament should be doing to kind of move this whole agenda forward I mean schools keep coming up and I'm beginning to think we should have had the schools here at the committee but I don't think we have had but you know for example it was suggested at the last session if you heard that that you know maybe we're letting kids opt out of STEM too soon or at all but are there just you know any other things you feel we should be be looking at we're leaving aside schools I mean you have a role as an employer yourselves to say well what are you doing both central government as well as a local government you know how are those employment practices flowing within the organisation this is the inf I suppose we talked earlier about statistics are you getting the data that you need to be able to analyse the situation when this gender pay gap report is well there's a requirement for organisations to put the information on to a government website what relationship is there between the Scottish Parliament and the UK government around that database will you be able to search for data by postcode will there be the option for employers or Scottish employers to be able to when they're entering their data so well this is the data and this is the explanation so employers are able to kind of head off questions by having the opportunity to kind of explain what's been done and why. Ms Morrison do you have any thoughts as to what we should be doing? I think we do absolutely have to do something in schools you know I was presenting recently at the launch of the digital extra fund and I stood up and had been given statistics beforehand and said there are only eight computing teachers in Highland region and the speaker after me said Maggie's wrong and obviously I assumed she was going to say 12 or 16 she said there there are only seven because one of them's retired and I think if you know if we're not able to to put that expertise into schools then it's difficult to see how we will fix the problem I think we need multiple interventions and I think we do need to work to change the way young girls think about STEM. Is it partly language that's been suggested to us a few times that you know just some of the terms we use kind of give this I don't know male aggressive macho image? I think it's I just think it's a lack of understanding about how exciting those jobs can be and not you know Leah Hutchin have appointed for example a great company young women tech focused I don't think we're getting these role models in front of girls enough and I think there probably is still a perception that it's a it's a geeky activity with you know guys with long hair and Jesus sandals sitting in somewhere with no light coding and that clearly isn't going to isn't going to appeal to young women but one of the other thing about that eccentric study was that 14% of the parents interviewed could quantify what they thought was a good career for their daughters and I think that's a shocking a shocking statistic as well. This space is also the issue of trying to encourage boys into a wider subjects as well and career such as you know social care and teaching. Okay well we could probably develop that further but I think that's enough thanks very much. All right okay well thank you very much to both of you for coming in today we'll allow you to depart from the the questioning standard whatever we want to call it and we have an item three which we're to deal with before we move into private session. Item three is the bankruptcy fees Scotland revocations regulations 2017 which are SSI 2017 week 97. Does any member have any substantive issues they wish to raise or are they content that the instrument comes into force or we agreed that it comes into force? Thank you very much I'll suspend the session and we'll move into private session I'll allow the gallery to clear. Thank you.