MPs have urged the government to introduce mandatory reporting of the pay gap between staff of different ethnicities, saying there is no excuse for failing to tackle racial inequality in UK workplaces.
Large companies should be required by law to publish data on employee salaries, following the framework already in place for gender, the House of Commons women and equalities committee (WEC) said in a report published on Tuesday.
The cross-party group of MPs said it is the “first step” to addressing pay disparities between employees from different ethnic backgrounds and cited research showing such efforts to address racial inequality could boost the UK economy by £24bn a year. The report recommends imposing the law from April 2023.
Caroline Nokes, the Conservative MP who chairs the committee, said: “The government’s failure to move forwards on ethnicity pay gap reporting is perplexing. We already have the systems in place to start reporting on the ethnicity pay gap, as well as a clear impetus: tackling inequality benefits not only marginalised groups, but the whole economy.
“The government has no excuse. All that is lacking, it seems, is the will and attention of the current administration.”
A Department for Business, Energy and Industrial Strategy (BEIS) consultation on introducing mandatory pay gap reporting ended in January 2019 but the government is yet to publish any proposals. A petition with 130,000 signatories was debated in parliament, but no government response followed.
Wilf Sullivan, race equality officer at the Trades Union Congress, said: “The government is dragging its feet. Mandatory ethnicity pay gap reporting is one of those rare areas where there is universal agreement across trade unions and businesses.
“But the government still seems reluctant and has not said why they are not taking action on a consultation that happened two years ago. If you do not have the facts about racial inequality in your workplace, it becomes much easier to dismiss.”
In a joint letter in June last year, the CBI business lobby, TUC and Equality and Human Rights Commission urged ministers to introduce mandatory disclosure to increase the number of employers reporting staff ethnicity pay gaps and spur the actions needed.
Nokes said: “The government proves itself to be blind to the importance of levelling up within our communities and address longstanding disparities along the lines of protected characteristics.”
In a WEC evidence session last month that heard from business and trade union leaders, Sandra Kerr, race director of network Business in the Community, said: “Company data on the ethnicity pay gap is not a silver bullet, but it is an important indicator that, as people progress up the organisation, they also get the right amount of pay.”
A government spokesperson said: “We want to ensure everyone, whatever their background, has equal opportunity to succeed and achieve on merit.
“We are considering the findings of the Commission on Race and Ethnic Disparities independent report, which included recommendations on ethnicity pay reporting, alongside feedback to our consultation on this issue. We will set out our response to this - as well as the Women and Equalities Committee report - in due course.”
