In another Liberal Democrat policy U-turn, the government will not enforce the compulsory equal pay audits proposed in the Equality Act and will instead work with businesses to introduce a voluntary scheme.
The government billed the move to limit the two sections, drafted by Labour, as a rolling back of its involvement in people’s lives.
“New legislation and increased regulation has produced diminishing returns, and in recent years progress on equality has stalled and in some areas begun to reverse,” the Equality Strategy published yesterday said.
But the Lib Dem election manifesto and past speeches by Lib Dem Lynne Featherstone, now equalities minister, pledged to introduce the audits.
Section 78 of the Equality Act would impose audits on companies with more than 250 employees that do not voluntarily disclose pay by gender by April 2013.
But the section has not been struck off the Act and could be reinstated if a voluntary arrangement fails.
Campaigners reacted with dismay, but business groups expressed relief.
“There is no justification for the government using regulation in this area. We believe that the vast majority of businesses are rightly paying women the same as men for the same work,” said Institute of Directors director-general Miles Templeman.
The CBI welcomed the commitment to a voluntary framework to improve gender diversity.
FAST FACTS | PAY INEQUALITY
Women are paid 22 per cent less than men on average, according to government figures.
UK pay gap is expected to close in 2067.
The audit was meant to apply to all firms with more than 250 employees.