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Speaker 1: I want to get to a story that's a huge

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Speaker 1: interested in the city. After a series of sexual misconduct

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Speaker 1: scandals in financial services this year, MPs are investigating sexism

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Speaker 1: in the city. The Aviva CEO Amanda Blanc told the

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Speaker 1: Treasury Select Committee that sexism is amplified in finance, including

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Speaker 1: predatory behavior that targets younger women. Joining us now is

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Speaker 1: the Treasury Select Committee Chair Harriet Baldwin, Conservative MP since

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Speaker 1: twenty ten, and just as a reminder, she started out

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Speaker 1: in the city at JP Morgan and was also instrumental

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Speaker 1: in another big report, the Women in Finance Review between

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Speaker 1: twenty seventeen and twenty ninety when she was Economic Sex

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Speaker 1: to the Treasury. So now on another major investigation into

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Speaker 1: diversity in the city. Welcome to the program of Harrett Baldwin.

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Speaker 1: What did you make of the Aviva boss one of

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Speaker 1: the few a handful, frankly of forty one hundred CEOs.

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Speaker 1: She said that sexism has worked and against her as

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Speaker 1: she's become more senior, that harrassmn targets younger women, has

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Speaker 1: sexism and women in finance has she gone backwards?

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Speaker 2: Well, that's exactly why we open this inquiry and we're

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Speaker 2: looking specifically at the period since twenty eighteen when the

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Speaker 2: Committee last looked at this issue and made recommendations. You know,

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Speaker 2: the view of the Committee is that the financial services

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Speaker 2: sector it's one of the great jewels in the UK economy.

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Speaker 2: It is a fantastic place to work and it's a

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Speaker 2: place where, in fact, you know, people have very successful careers,

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Speaker 2: people have been well paid, and it's also one where

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Speaker 2: you want to make sure that the UK attracts and

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Speaker 2: retains the very best people from all over the world

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Speaker 2: to work in this sector. And so to do that right,

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Speaker 2: you've obviously got to create a culture where everyone can thrive.

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Speaker 2: And that's why it's so important to our committee to

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Speaker 2: look at how things have changed, what we have picked

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Speaker 2: up in our evidence, and you just summarize very well,

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Speaker 2: there is that that doesn't seem to have been much

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Speaker 2: progressed since twenty eighteen. That's coming through very clearly in

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Speaker 2: both the data that we've been given in terms of evidence,

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Speaker 2: but also we've been very grateful to some brave women

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Speaker 2: who've come in anonymously and given us off the record

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Speaker 2: evidence that we are summarizing anonymously for our inquiry, and

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Speaker 2: we're hearing that despite the fact that we're in the

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Speaker 2: twenty first century, it can still be very challenging for

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Speaker 2: young women at the start of their career. And there

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Speaker 2: are also you know, points when women have babies that

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Speaker 2: can also be quite challenging. So it's been quite eye opening, Harriet,

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Speaker 2: which are the worst sectors for this problem? Well, Interestingly,

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Speaker 2: what we're finding is that the Women in Finance Charter,

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Speaker 2: which was the initiative set up by government back in

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Speaker 2: twenty sixteen, launched by Mark Carney when he was Governor

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Speaker 2: of the Bank of England, really important piece of work

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Speaker 2: done by Jane and Guardia. Then it's interesting that that

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Speaker 2: now covers over a million employees in the city. So

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Speaker 2: lots and lots of financial services firms have signed up

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Speaker 2: to that charter, and the charter sets out things that

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Speaker 2: the board will take responsibility for. It's obviously it's voluntary,

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Speaker 2: but it is now very widely adopted and in those

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Speaker 2: bigger firms, I think this is taken much more rigorously.

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Speaker 2: What we're finding is we're picking up in some of

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Speaker 2: the smaller businesses, some of the smaller firms, and you know,

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Speaker 2: without giving away things that might be in our report,

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Speaker 2: you know, certain sectors where things seem to be, you know,

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Speaker 2: tougher for young women at the start of their career,

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Speaker 2: tougher for women taking career breaks for children.

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Speaker 1: Yeah. The critics say though, that the women in finance

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Speaker 1: start basically doesn't drive accountability and that that is at

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Speaker 1: the root of why change has become so sluggish. I mean, also,

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Speaker 1: the UK has been at the forefront in terms of

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Speaker 1: gender pay gap reporting. There's still a twenty five percent

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Speaker 1: gender pay gap for women in the city and it's

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Speaker 1: worse for financial services than it is in other industries.

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Speaker 1: So the issue is that the initiatives, the sign up,

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Speaker 1: that the voluntary stuff, it's not making enough of a difference,

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Speaker 1: it's not really driving accountability.

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Speaker 2: Well, this is exactly why we've opened this inquiry again

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Speaker 2: to look at that. There were recommendations we made back

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Speaker 2: in twenty eighteen. Obviously will refresh those recommendations and I

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Speaker 2: think that point has been well made in the evidence

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Speaker 2: that we've been receiving, and so we will consider all

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Speaker 2: of these points and report on this in the new year.

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Speaker 1: Is there commitment from the government for something more forceful

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Speaker 1: in order to create change.

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Speaker 2: I think the commitment from the government is that This

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Speaker 2: is an incredibly important sector the UK. The government wants

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Speaker 2: it to grow thrive. You know, the taxes paid from

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Speaker 2: this sector paid for a good chunk of our public

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Speaker 2: services in the UK. It's a really important area. You

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Speaker 2: highlighted the fact that the pay gap is still very wide.

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Speaker 2: You know, that's a reflection of this is a very

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Speaker 2: well paid, well remunerated sector and in some sectors, like

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Speaker 2: for example, investment management, the pay gap is even wider.

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Speaker 2: So it's extraordinary to see. In our report in venture

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Speaker 2: capital in July we put out something which said that

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Speaker 2: of every pound raised in venture capital in the UK,

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Speaker 2: only two pence goes to women their businesses. So there's

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Speaker 2: a huge scope for even more success for this sector

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Speaker 2: if they can get this right.

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Speaker 1: What about the Bank of Bonus Cup because the twenty

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Speaker 1: nineteen reports said that that was a problem for this

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Speaker 1: and yet it's been reinstated or lifted.

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Speaker 2: Yeah. I mean that's something that the regulators were very

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Speaker 2: keen to see lifted. As you know, it was something

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Speaker 2: that we could do now that we've left the European Union.

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Speaker 2: From the regulators point of view, they would much rather

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Speaker 2: have a sector where the fixed costs and that the overhead,

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Speaker 2: as it were, of the sector is kept at a

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Speaker 2: manageable level, and that people are only rewarded by bonuses

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Speaker 2: when they do particularly well and that can be paid

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Speaker 2: for profits. And of course there are other measures that

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Speaker 2: have been taken to do with calling back those bonuses,

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Speaker 2: things that were done in reaction to the financial crash,

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Speaker 2: which I think are entirely appropriate.

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Speaker 1: Yeah, okay, But the issue with the banker bonus cap

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Speaker 1: is that it's considered to have a particularly detrimental effect

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Speaker 1: on women in finance and that it's more difficult for

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Speaker 1: them to get that and so it sort of perpetuates

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Speaker 1: the system. And the other issue is, you know, we're

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Speaker 1: better attitudes towards work from home or childcare help. I

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Speaker 1: mean again, the Conservative government has pushed back very much

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Speaker 1: against work from home also seen as something that could

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Speaker 1: help you know, women in finance, or that does help

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Speaker 1: women in finance.

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Speaker 2: Yeah. No, I well remember from my days in the

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Speaker 2: city that it was, you know, the women didn't ask

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Speaker 2: for bonuses as loudly as the men did, let's put

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Speaker 2: it that way. So there's definitely a gender lens to

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Speaker 2: look at that issue through. But in terms of you know,

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Speaker 2: government action, a wide range of different things taking place.

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Speaker 2: I think that you know, everyone wants to see this

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Speaker 2: sector be very much positioned to grow and to succeed

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Speaker 2: in the UK economy. It is such an important sector

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Speaker 2: from the point of view employment working from home. That's

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Speaker 2: exactly why we looked at this from the lens of

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Speaker 2: from twenty eighteen onwards, because we have gone through this revolution.

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Speaker 2: Has that made a difference. We've had a lot of

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Speaker 2: interesting evidence in that regard, and obviously, I think from

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Speaker 2: a point from the point of view of individual firms

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Speaker 2: in the actual services sector, there are lots of ways

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Speaker 2: in which they can differentiate, lots of ways that they

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Speaker 2: can make their offer more competitive by looking at their

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Speaker 2: own internal policies.

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Speaker 1: Are they genuinely committed to change Harriet firms?

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Speaker 2: I think it varies. Actually. I think from the point

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Speaker 2: of view of retaining and attracting talent, it's often a

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Speaker 2: lesson that has to be learned. You know that you

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Speaker 2: suddenly lose two of your great people because another firm

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Speaker 2: offers a better package around around some of these issues.

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Speaker 2: So I think it's good to have that competitive tension

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Speaker 2: between firms, and the firms that get this right will

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Speaker 2: be more successful in attracting and retaining the best people.

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Speaker 1: You're in charge of an incredibly important committee in terms

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Speaker 1: of oversight and feedback. Your view on a different subject now,

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Speaker 1: the Chancellor Jeremy Hunts Edinburgh Reform thirty one key measures.

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Speaker 1: You know it was builders big bang two point zero

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Speaker 1: I mean literally comparisons to the Thatcher era when financial services,

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Speaker 1: as you well know, became so crucial to the UK economy.

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Speaker 1: Your committee has called it basically a damp squib, which

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Speaker 1: is a big indictment of the Chancellor. What do you

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Speaker 1: think that he should be doing better in order to

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Speaker 1: deliver reforms that actually have real world impact for the

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Speaker 1: City of London.

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Speaker 2: We put out a scorecard one year on and it

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Speaker 2: says that of the thirty one measures, there are still

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Speaker 2: some implementation left to do. Some of the measures have

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Speaker 2: been implemented, but it's early days to see if those

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Speaker 2: are having the impact. We had the Financial Conduct Authority

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Speaker 2: Chair and Chief Executive in front of our committee this

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Speaker 2: week to see how they've started to embed their secondary

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Speaker 2: objective of competitiveness. For example. I think that's an important

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Speaker 2: structural reform. But yes, by reporting exactly year after the

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Speaker 2: announcement of the Edinburgh Reforms. We hope that we've given

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Speaker 2: you both the Treasury but also the regulators, you know,

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Speaker 2: a bit of an encouragement to follow through on the

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Speaker 2: rhetoric and actually get these things implemented.

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Speaker 1: Yeah, certainly a wake up call for them to do that. Harriett.

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Speaker 1: We really appreciate your time. Thank you so much for

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Speaker 1: coming on to Bloomberg Radio and speaking to us. The

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Speaker 1: Treasury Select Committee Chair Harriet Baldwin