Gender pay gap costs UK economy £23bn a year

The pay gap between men and women costs the British economy up to £23bn a year in lost productivity and wasted talent, a Government-ordered inquiry will disclose today.

The Women and Work Commission will propose a raft of measures to allow women to get a fairer deal in the workplace. It identifies the main problems as job segregation between the sexes, a failure to promote part-timers to senior posts and narrow career horizons for girls although they outperform boys academically.

The commission's report will conclude: "The gender pay gap is not only bad for women. It is bad for Britain."

Two commission members, Kay Carberry, the TUC's assistant general secretary, and John Cridland, the CBI's deputy director general, said in a joint statement: "The continued division of jobs into men's work and women's work is holding back our economy at a time when the challenge from abroad means we need to be operating a peak levels of performance."

When the Equal Pay Act was introduced 30 years ago, the gender gap on pay was 29 per cent. Although it has almost halved, campaigners estimate that it will take another 80 years to achieve equal pay.

The commission, chaired by the former trade union leader Baroness Margaret Prosser, estimates that women in full-time work earn 13 per cent less per hour and women part-timers 41 per cent less than men in full-time jobs. Some 45 per cent of women in part-time work under-use their skills.

Its 40 recommendations include plans to encourage more women into male-dominated industries such as computers and construction and away from the "five Cs" - catering, cleaning, cashiering, clerical work and caring.

The commission wants a major drive to help women returning to work part-time after having children to get their fair share of senior jobs and to get more help with updating their skills and changing careers. It wants careers advisers to spell out the earning potential of different jobs so girls can make a more informed choice. Tony Blair and Gordon Brown will give a positive response when they launch the report and the Chancellor is expected to expand schemes to help women workers in his March Budget.

But the commission will anger unions by not backing demands for companies to be forced to conduct equal-pay reviews.

Derek Simpson, general secretary of Amicus, said: "The pay gap between men and women is due to discrimination by employers, not because women make bad employment choices. In order to win pay justice, women have to go through lengthy, expensive legal processes. Without compulsory pay audits women will have to wait until doomsday for equal pay."

The Tories will say today that pay based on sexual discrimination is "completely and totally unacceptable". They will pledge to give childcare a higher priority and dispel the idea that they believe young mothers should stay at home.

George Osborne, the shadow Chancellor, will say in a speech: "Mothers who work should not be made to feel guilty. Nor should mothers who stay at home. Let us stop trying to tell families how to live their lives. Let us instead support the lives that families live."

Accusing Mr Brown of believing in a "real nanny state," Mr Osborne will say: "Every family wants something different from childcare. Each has different needs, different desires and different decisions to take. You cannot impose a one-size-fits-all model of childcare provision."