Harman: I'll make firms put more women on their boards

City firms risk losing lucrative government contracts if they fail to appoint more women, Harriet Harman warned today.

The equalities minister vowed to end the "nightmare" of men-only boards and left open the prospect of laws to force companies to promote more women.

Giving evidence to the Treasury select committee, she rejected claims by a high-flying female financier that women were damaging their careers by taking long maternity leave.

The MPs were also told that ministers are discussing a pledge with the CBI on preventing sex discrimination. One effect of having more women on boards was said to be more men turn up for meetings.

Ms Harman spoke of the impact the flagship Equality Bill, which is intended to tackle discrimination against women and ethnic minorities, could have on the financial sector.

The Government and town halls will be able to favour firms with a more diverse workforce when granting public procurement contracts. Ms Harman made clear that male-dominated firms faced missing out on work. "Procurement is a major lever," she said.

She called for more flexible working and cultural changes in the City, saying: "If you want to make sure that you don't have the nightmare of men-only boards, you have got to change the terms on which men and women participate."

Ms Harman stopped short of backing a 40 per cent quota for women or men on boards as adopted by Norway. She believes greater transparency, encouraging firms to take action and pay audits for companies of at least 250 employees are needed.

She rejected arguments made by mother-of-three Nichola Pease, deputy chairman of JO Hambro Capital Management, who claimed women's career prospects were undermined by measures aimed at protecting them in their jobs. Ms Pease told the committee last week: "I think we have got too long maternity leave. A year is too long and sex discrimination cases that run into tens of millions are ridiculous."

But Ms Harman argued there were wider benefits of 12-month maternity leave to the family and the economy.