Speech

The Home Secretary's speech on women and the economy

This speech was delivered by the Home Secretary, Theresa May, on 4 November 2011. The speech is checked against delivery.

Introduction

As a politician, I’m often asked ‘what’s the point of politics?’.

A lot of people say it’s about service. But, for me, it’s more than that. Politics is a mission. A mission to change lives, to stand up for people who work hard and do the right thing, to help people to help themselves and their families.

Dealing with the Deficit Fairly

But I know that a lot of people are asking ‘how can you make our lives better when you’re having to make all these cuts?’. I understand that.

The cuts - indeed the whole economic picture - are unsettling and they affect us all.

But today I want to explain why the cuts are necessary, what we’re doing to make sure the impact is fairly spread, how there’s still scope to do good, and how, when we get through the tough times, we will have an economy that is stronger, fairer, and works, not for the super-rich, but for the hard-working majority who make our country what it is.

It would be the easiest thing in the world for us, as a government, to ignore the deficit; to keep spending like there’s no tomorrow; to put off the inevitable.

As Home Secretary, it would certainly be easier for me to go on increasing spending on the police year after year.

But the truth is, the country can’t afford it.

If we went on spending at the rate we were, then we’d go on spending more on debt interest than we do on schools - just as we do now.

We’d be in the kind of danger faced by Greece.

We’d end up having to make even more severe cuts than those we’re facing now.

The answer cannot be to borrow more. You can’t pay off a credit card bill by taking out a loan. You can’t sober up by drinking more. You can’t escape a debt crisis by getting even deeper into debt.

That’s why we are taking the tough, but necessary, decisions to bring our country back from the brink.

But as we’re taking those difficult decisions, we’re making sure that the cuts are shared fairly, and the most vulnerable are protected.

So, yes, we have had to take some difficult decisions on public spending. But we are increasing spending on the NHS in real terms every year.

Yes, we have had to implement a public sector pay freeze. But that’s allowed us to protect against more public sector job losses, and even as we implement the freeze, we are protecting the lowest paid public sector workers, almost 80 per cent of whom are women.

Yes, we have had to make tax changes. But as we have done so we are lifting 1.1 million of the lowest paid workers out of income tax altogether, more than half of whom are women.

And, yes, we have taken the difficult decision to remove Child Benefit from higher earning families. But that decision has meant we can increase child tax credits for low to middle income families.

In fact, it has meant we can increase the child element of Child Tax credits by £180 per child in this financial year and then £110 next year, over and above the level promised by the last government.

Sometimes we’ve struggled to get these messages across. Debates about the future of the 50p tax rate have obscured the fact that this tax on high-earners is still in place - but income taxes on low-earners have been cut.

And we’ve shown we’re willing to listen. Women told us that they were concerned about the speed at which their state pension age was increasing to 66. So we acted and we made changes.

So we have taken difficult decisions, tough decisions, but we’ve taken them fairly.

I know that some are calling for us to stop every cut, and to increase spending on things that, in an ideal world, I would love to increase spending on.

But I have to say to them: we need to be realistic. There is no money. We have to make savings. The longer it takes for us to wake up to that fact, the harder it will be in the long-run.

And let’s remember, there is nothing fair about saddling the next generation with the debts we racked up.

The next generation are going to face great challenges - competing in a truly global market, they’ll need to be better educated, highly skilled, entrepreneurial and more innovative. It just wouldn’t be right or fair to burden them with our debts.

So it’s right that we are dealing with the deficit, and it’s right that we’re dealing with it now.

There’s A Lot of Good We Can Still Do

But I think, when everyone is talking about cuts, it’s easy to forget that there is still a lot of good we can do as a government.

In my own department, we are reforming the police to make them truly accountable to the public for the first time. And we’re cutting immigration so that net migration gets back down to the tens of thousands.

Elsewhere, we’re shifting power from Whitehall to local communities, we’re reforming welfare to make work pay, and we’re transforming schools to boost social mobility.

Just because we’re having to cut public spending doesn’t mean we can’t change lives for the better.

Women and the Economy

The result of policies like these - as well as the difficult decisions we have to take on public spending - will be an economy and a society that are stronger and fairer, and that operate in the interests of the responsible, hard-working majority.

One way in which I’m particularly keen that our economy becomes fairer is in the opportunities available to women.

In fact, this isn’t just a question of fairness, it’s also one of economic strength.

We often hear about the advantages of trade with emerging powers like India, China and Brazil.

But to put things into perspective, if we fully used the skills and qualifications of women who are currently out of work, it could deliver economic benefits of fifteen to twenty one billion pounds per year . That’s more than double the value of all our annual exports to China.

If women started businesses at the same rate as men, there would be an additional 150,000 extra start-ups each year in the UK.

And if the UK had the same level of female entrepreneurship as the US, there would be approximately 600,000 extra women-owned businesses, contributing an extra £42 billion to the economy.

The Problem and the Potential

For too long, not enough has been done to help women to fulfil their true potential.

Women’s unemployment started rising under Labour and has now been rising year on year since 2007. Today, there are more than 1 million women unemployed in the UK.

Many of these women possess excellent qualifications - three quarters have qualifications above GCSE grades A*-C; one in seven have degree level or equivalent qualifications.

Where they want to, we need to get these women back in to work and we need to start using their qualifications and skills to contribute positively to our economy. Our work programme will give them tailored support to help them do so.

And of the women who are working, more than two fifths work part time. An estimated 700,000 are doing that, not because they choose to, but because they cannot find a full time job.

I want us to help all those women who want to, to get into full-time employment.

Breaking Down The Barriers

Now, let’s be honest - times are tough in the job market, both in this country, in Europe and around the world.

But there are specific additional challenges that women face simply because they are women, and that is something that we, as a government, need to do something about.

Many of them don’t involve simply spending more money; they involve doing things differently - in government, in business and in society.

Building Modern, Flexible Workplaces

The top issue that comes up time and again for women is balancing work and family life.

The traditional inflexible 9-5 model of work just doesn’t make sense any more.

It’s based on the idea that in a family one parent will go out to work and the other will stay at home.

So these days it doesn’t make sense for most modern families, where often both parents want to work.

It doesn’t make sense for many one parent families, where staying at home just isn’t an option.

But neither does it make sense for many modern businesses.

In a global economy, the world doesn’t stop at 5pm Greenwich Mean Time; nor do international businesses, overseas customers, or foreign markets - and so British companies can’t either. They need a flexible workforce.

Many of our most forward-thinking employers already recognise this - and they’re reaping the rewards.

They know that flexible working helps them draw on a wider pool of skills and talent, improves staff morale and productivity, and helps them keep their valued members of staff.

Centrica, for example, actively promotes flexible working to all its employees. That’s because they’ve found that flexible workers show greater commitment and job satisfaction. And a satisfied and committed worker is a productive worker.

Now, 60% of Centrica employees have some form of flexible working arrangements in place and, interestingly, well over half of those flexible workers are men.

Employers like this know it makes good business sense to run a flexible workplace.

But as a government, we can do more to encourage the shift that is already happening in our society and in our economy.

It’s true, as I say, that many women and many businesses have already benefited from the introduction of flexible working for parents and carers.

But by restricting flexible working to certain groups, the idea was perpetuated that it’s some sort of special treatment, rather than being a sensible way to run a business.

I want to help all hard working employees to balance their work and other commitments by extending the right to request flexible working to everyone.

That will help shift attitudes and it will help encourage more firms to follow the lead of Centrica in making flexible working an integral part of their business model.

And we can go even further.

Many businesses already recognise that good workplace policies can help them retain their skilled female workers.

Indeed, recently there’s been a significant drop in the number of women changing employers when they return from maternity leave. That’s important for companies in retaining skilled employees and it’s important for women in maintaining their levels of pay and their positions at work.

But the current system of maternity and paternity leave just reinforces the old stereotype that when a couple start a family, women should stay at home and look after the children and men should go out to work and earn the money.

Why does the state assume that it is the mother who should stay at home and care for the kids? What if the mother earns more? What if she finds her job more rewarding than the father does? What if the dad simply wants to take on more of the caring responsibilities?

It shouldn’t be up to the government to decide who looks after children - it should be up to the parents. So let’s give working parents a helping hand by letting them decide.

Under our proposed new system of flexible parental leave, if fathers want to take more of a role in raising their children, they can. If mothers want to return to work earlier, they can. If both parents want to spend some time at home together after the birth of their child, they can.

What matters is that both parents will have the choice to decide what is right for them and what is right for their family.

That will make a real difference for working women and it will make a real difference for fathers.

Because I don’t just want women to have the flexibility to juggle work and caring. I want men to have the opportunity to take on more of the caring responsibilities as well.

I don’t just want to give women more choice. I also want women to no longer be the only ones who have to choose.

Tackling the Gender Pay Gap

But building modern and flexible workplaces is not the only way we can help level the playing field.

Today is equal pay day - the day in the year after which the gender pay gap means women effectively stop earning compared to men.

Currently, the gender pay gap stands at over 10% for full time workers.

Putting the simple matter of fairness to one side, just think of all the benefits from getting women’s pay up to the same level as men’s - greater prosperity for millions, increased consumer spending and more tax revenue to spend on public services.

Of course, flexible working and flexible parental leave will help close the pay gap. But we need employers to play their part too.

That’s why last month I joined senior figures from Tesco, BT, the leading law firm Eversheds, the CBI and other top companies to launch ‘Think, Act, Report’, our new initiative to improve transparency on pay and wider workplace equality that will help drive change, including closing down the gender pay gap.

The simple, step-by-step process involves companies first identifying any issues around gender equality in their workforce or pay structures. Then taking action to address those issues. And finally reporting publicly on progress. So: Think, Act and Report.

Transparent reporting is not an add-on - it’s a powerful tool to achieve real and long-lasting change. It lets everyone see the progress employers have made. It shows staff what is happening in their firm. And it lets customers decide where they want to take their business.

We’re the most open and transparent government in history and now we’re asking business to be transparent too.

The big difference between what we are doing to close down the gender pay gap and what’s been tried - and failed - before is that we are not battering business around the head with the bludgeon of legislation. We’re working with business to help them make their workplaces more equal for women.

And you can see the merits of our approach by the leading companies, and the successful SMEs, that we’ve already signed up.

We are now working closely with Opportunity Now, the arm of the charity Business In the Community that works for more responsible business, to help drive this agenda forwards.

Helping Women Reach The Top

A business-led approach is also how we can bring about change in the boardroom.

Last year, only 12.5 % of all FTSE 100 board members were women.

That’s not good enough. And that’s why we commissioned Lord Davies’ to report on this issue and to make recommendations to help get more talented women into the boardroom.

Six months on, important steps forward have been made:

The Financial Reporting Council has announced it will amend the Corporate Governance Code to strengthen the principle of boardroom diversity.

The head-hunting industry has agreed a code on diversity.

And the numbers themselves are moving in the right direction. Women now make up over 14% of FTSE 100 Directors - up from last year. 24% of all board appointments since the report’s publication have been female - up from 13% last year. And there are now only 12 all male boards within the FTSE 100 - down from 21 last year.

But there is still a long way to go.

So we’ll be working with Lord Davies, and with business, to make sure we keep up momentum.

And we are leading from the front by announcing our aim that at least 50% of appointments to public boards by 2015 should be women.

Of course mandatory quotas can offer a short cut or a quick fix to increase female representation.

But countries that have used alternative models have made significant progress. Australia’s ‘if not, why not’ policy led to a 40% increase in the proportion of female directors in just one year.

Achieving change in this way is hard work and progress can be slower than everyone would like.

But as a woman, I never wanted to get anywhere because I was part of a quota that someone needed to fill. I wanted to get there because I’d worked hard for a job and because I deserved it. And I think that’s exactly how most women in this country feel.

Real and lasting change will not happen through government dictating how businesses should be run, by passing a new law or by preaching to business. Change will only come when businesses themselves realise the benefits.

And some of our most successful companies already know that women can bring fresh perspectives, new ideas and experience to their boards. They know that a company board that better reflects its customers is better able to understand their needs. And they know that there is growing evidence that companies with more diverse boards do indeed perform better, with greater returns on equity and faster growth.

Helping Women Fulfil Their Potential

But as well as shattering the glass ceiling, we’ve also got to deal with what some people call the sticky floor.

I don’t only want to fight for professional women, or for the small number who are already near the top. I want to do more to help women who don’t earn as much, or have lower paid jobs or who don’t work at all.

Too many young women still don’t have the confidence to aspire to ever get a job; too many still believe that the most that is expected of them is to make do on benefits.

Too many women who leave work when they start a family don’t have the confidence to go back; some are afraid to even apply for a new job; some feel they’re better off not working.

And too many women who are working part-time don’t feel they can go full-time; or those with a great business idea do not feel able to strike out on their own and start their own company.

This means that too many women do not fulfil their true potential.

The policies I have talked about today, like flexible working and flexible parental leave, will help. They will make a real practical difference.

But we also need to raise aspirations by improving social mobility, through measures like our pupil premium to get disadvantaged children into the best schools, not the worst.

We need to tackle the sexualisation of childhood, which means that too many young girls grow up aspiring, not to become successful female athletes, politicians or business people, but glamour models or reality TV stars.

We need to improve body confidence, so young women realise their future will be defined by their talent, their hard work and their abilities, not by what they look like.

We need to encourage women to choose more of the subjects at A-level and University that will allow them to flourish in today’s economy.

We need to give women the skills to succeed. And last year, for the first time, more women started an apprenticeship than men.

We need to do more to help with childcare, which is why we recently announced an extra £300 million for childcare support under Universal Credit to help around 80,000 more families with children to work the hours they choose. And that’s on top of our pledge to extend the right to 15 hours free childcare per week to all disadvantaged 2 year olds.

And we need to reform welfare to make sure being in work pays more than being on benefits.

These policies will make a real difference to every woman - whether she’s working or not - to help her make the best of her life.

Women Business Mentors

But there are also a lot of women out there who already have that ambition. They’ve got a business idea, they want to make it on their own, but there are barriers in their way that stop them taking the leap.

I want us to do more to help these women entrepreneurs.

There are already more than 1.1 million self-employed women in the UK, nearly a third of the total self-employed population.
But although women in Britain are more entrepreneurial than their counterparts in Germany, Italy and Japan, women in Britain are still less likely than women in the USA to start their own businesses.

As a government, we want the UK to be the best place in the world to start and grow a business, and for the next decade to be the most entrepreneurial and dynamic in Britain’s history - women can be at the centre of that success.

So today I can announce that we will provide resources for 5,000 volunteer business mentors to be recruited and trained to offer effective support to women who want to start or grow their own business.

Business people tell us that they want to take advice from other business people. So the business mentors will be experienced individuals, who can provide tailored advice and support. They will be a huge help to women entrepreneurs.

Recent research by Delta economics shows that women who want to start their own businesses often have specific concerns around issues like access to finance, building confidence, work life balance and working from home.

Women also often have different motivations for starting their own business, different goals and target different markets to men.

So we will ensure the training and support material the mentors use really reflect the needs of women.

Women’s Business Council

Today is not the final word in what we will do to support women in our economy. In fact, it’s just the start.

So I can also announce that we are establishing a Women’s Business Council, to provide advice to me, to the Chancellor and to the Business Secretary on what we can do to maximise women’s contribution to our future economic growth.

This important new body will provide recommendations on public policy that affects women in business and will seek to improve the business environment for women so as to maximise profit and success.

Conclusion

For too long, as a country, we have failed to make the most of the skills, experience and talents of women.

And despite the difficult decisions that need to be taken, there is much we can do to make sure that our economy emerges stronger and fairer, and operates in the interests of the working majority.

Change will not be easy and it will not be quick.

It will take a comprehensive effort to tear down the barriers women tell us they face.

So this Government will introduce flexible parental leave and extend flexible working; it has got more women onto boards; is supporting greater gender equality in business and is helping women who want to get into work.

But I know we need to always strive to do more.

That’s why today we’re providing mentors for entrepreneurial women.

And we’re setting up a Women’s Business Council to help unleash the economic potential of Britain’s women.

The prize - a more competitive economy, a more equal society and personal prosperity - is worth fighting for.

That’s why I am determined to do everything in my power to put women at the heart of our economic future.

Thank you.

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