U.K. Business Says Cameron’s Gender Pay Gap Risks ‘Misleading’

U.K. business groups expressed reservations about Prime Minister David Cameron’s proposal to make companies publish the difference in the average pay of male and female employees.

Companies with more than 250 employees will be required to publish the gender pay gap under proposed regulations published Tuesday.

The concern of the Institute of Directors, which lobbies for 34,500 members, is that it “could produce misleading information,” James Sproule, director of policy, said in a statement. “Measuring pay gaps is very complex, and averages do not show whether companies are paying people different amounts for the same work.”

The Confederation of British Industry, which represents 190,000 companies, also views the plan as potentially misleading although it will “work with the government to ensure that rules on what is published are flexible enough to be relevant to each company,” said Katja Hall, its deputy director-general.

Cameron will start a consultation process on the details of the new rules, which were outlined after his government pledged last week to increase minimum pay for workers over 25 to 9 pounds ($14) an hour by 2020.

“This will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up,” Cameron wrote in the London-based Times newspaper.

The government said women now make up a quarter of the members of boards of FTSE 100 companies after a campaign led by former Business Secretary Vince Cable before the May 7 general election. Lloyds Banking Group Plc committed itself to supporting the new rules.

“Lloyds looks forward to working with the government on the consultation on gender pay gap reporting, to ensure the views of British business are taken into consideration when implementing this policy,” Chief Executive Officer Antonio Horta-Osorio said in an e-mailed statement. “Women are a vital part of our workforce and we are working hard to support them at each and every level of their careers.”

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