Large companies will finally be forced to disclose whether they are paying men more than women from next year, David Cameron will say on Tuesday.

In a move that has long been resisted by businesses and parts of the Conservative party, the prime minister will bring forward rules by the first half of next year to make companies with more than 250 workers disclose the pay gap in their workplaces.

Cameron will announce an ambition to end the gender pay gap within a generation. It currently stands at 19.1% for full- and part-time workers in the UK, meaning a woman on average earns around 80p for every £1 earned by a man.

The difference represents the sixth-highest pay gap in the EU, behind countries including Italy and Poland. A consultation will be launched on exactly what information should be published, as well as where and how often.

Cameron will say: “Today I’m announcing a really big move: we will make every single company with 250 employees or more publish the gap between average female earnings and average male earnings.

“That will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.”

The prime minister’s decision to act on the gender pay gap appears to be another example of the Conservatives taking one of Labour’s policy ideas, seizing more of the centre ground after promising a “national living wage” and cracking down on the non-dom tax status.

It was acting Labour leader Harriet Harman who first included powers for the government to force companies to reveal their gender pay gap in the Equalities Act of 2010 but the coalition failed to enact the provisions in that law, favouring a voluntary approach.

After only five companies published the gender pay gap of their own accord – Tesco, Friends Life, PwC, AstraZeneca and Genesis – the Liberal Democrats argued for the introduction of mandatory reporting, with former deputy prime minister Nick Clegg securing an amendment in March that would force ministers to make regulations on the subject within the next 12 months. The Conservatives included a promise in their manifesto to stick with the policy in relation to companies with more than 250 workers.

The CBI, the industry group representing major businesses, said it would rather continue with the voluntary approach and argued the data “could be misleading”. However, it pledged to work with the government to try to ensure flexibility in how the new rules are applied to each company. Among the Tory critics of the plan, seven male Conservative MPs voted against the coalition’s enabling legislation in March, including John Whittingdale, who is now Cameron’s culture secretary.

It is understood that the government is keen to tackle some of the root causes of the gender pay gap because any company that pays a woman less for equal work would already be acting illegally.

Nicky Morgan, the education secretary and equalities minister, spoke earlier this month about one of the most substantial causes behind the pay gap being the fact that women are still far less likely to work in higher paid industries.

She said on Monday: “We are committing to eliminating the gender pay gap in a generation. This is not just the right thing to do, it makes good business sense: supporting women to fulfil their potential could increase the size of our economy by 35%. To achieve gender equality, we need to continue to inspire young women and girls so that they can compete with the best in the world for the top jobs – and see that their hard work will pay off.”

The prime minister claimed the new “national living wage” would benefit more women than men, but Labour critics argue the cuts to tax credits will hurt women more.

An analysis by the House of Commons library for Labour leadership candidate Yvette Cooper suggested that 70% of the money being taken from households – £24bn out of £34bn over five years – will come from women.

Overall, Labour welcomed the arrival of mandatory pay gap reporting but it called for a new annual pay audit to examine the data produced by the companies.

Gloria De Piero, the shadow equalities minister, said it was “good news that the government have finally embraced pay transparency after shelving the Labour legislation for five years”.

But she added: “For pay transparency to make a real difference, we need to have an annual equal pay check which measures progress and recommends what action needs to be taken – a move the government voted against earlier this month.”

Cameron confirmed the change at the same time as new figures show the FTSE 100 has met the target of ensuring a quarter of all board members across the index are women.

The government has now asked the target’s original architect, Lord Mervyn Davies, to continue advising how more improvement can be made.

Davies said hitting the target was a “a milestone event in the history of corporate Britain, one which, frankly, many found difficult to imagine only four short years ago”.

He said: “We have truly seen a revolution taking place in the boardrooms of Britain’s biggest companies, with a groundswell of support from all quarters, as more and more talented women take their rightful seat at the top table.”

The target has been reached for the FTSE 100 by taking the total number of boardroom positions across the biggest companies on the stock market as some companies have fewer than 25% women directors on their boards.

Denise Wilson, chief executive of the Davies review, said: “By 2020, the next generation of women won’t need to worry, providing we keep the same business focus and momentum up over the next five years”.

There are no longer any all-male boards in the FTSE 100. But in the next rung down, the FTSE 250, there are still 16 where only men sit around the boardroom table, she said.

The Adam Smith Institute, the free market right-leaning thinktank, opposed the move, saying it was a “sad state of affairs when even the prime minister is promoting the gender pay gap myth”.



Kate Andrews, its head of communications, said: “According to the ONS, women between the ages of 22–39 working more than 30 hours a week earn, on average, more than their male counterparts.



“Forcing businesses with more than 250 employees to publish their ‘pay gaps’ will only promote more myths and confusion. There is no such thing as an ‘average salary’; education, previous experiences, negotiating tactics, and unique abilities all contribute to one’s salary, none of which can be known by comparing John and Jane’s annual take-home pay on a spreadsheet.



“Furthermore, men and women often choose to make different career decisions – usually based on flexibility and rigour – so they can embrace other, equally meaningful parts of their life; this, naturally, can be reflected in their pay.”

