Labour calls for mandatory ethnicity pay gap reporting in ‘delayed’ Employment Bill

Labour has urged the Government to introduce mandatory ethnicity pay gap reporting in the ‘much-delayed’ Employment Bill.

The Conservative Party first committed to introducing an Employment Bill in the Queen’s Speech in 2019, and consulted on the introduction of mandatory ethnicity pay gap reporting the previous year.

However, ministers have failed to follow up on either matter some three years later; no draft Employment Bill has been produced and in the Government’s response to the controversial Sewell Report into racial disparities - it merely committed to “publish guidance to employers on voluntary ethnicity pay reporting in summer 2022”.

“Businesses, unions and MPs from across the political spectrum all agree that mandatory ethnicity pay gap reporting would boost prosperity and address inequality,” Shadow Equalities Minister Taiwo Owatemi said.

“The Government itself has said it’s an idea whose time has come, but now it looks set to break yet another promise.

“Labour urges the Government to include this vital measure in its much-delayed Employment Bill. Black, Asian and ethnic minority people deserve security, prosperity and respect.”

Yet mandatory ethnicity pay gap reporting is backed by the CBI, the TUC, the Equalities and Human Rights Commission, and the Conservative-chaired Women and Equalities Select Committee.

The Government’s own 2018 consultation said “it is time to move to mandatory ethnicity pay reporting”. Labour has pledged to introduce the measure as part of its ‘New Deal for Working People’.

Ethnically and culturally diverse businesses can see up to 36 per cent more profitability and it is estimated that achieving race equality in the UK would potentially bring a £24 billion boost to the economy every year.

As things stand, though, Pakistani workers earn 16 per cent less than their White peers and Black African workers earn 15 per cent less.

This comes afterThe Independent revealed that ethnicity pay gap data will not be widely published by companies in the UK until 2075 unless the Government intervenes, as highlighted by research from Business In The Community.

A Government spokesperson said: ‘This government is committed to removing unfair barriers in the workplace for everyone, everywhere, in every community.

“That’s why we are issuing new guidance as part of our Inclusive Britain Action Plan to help those employers who want to use ethnicity pay gap reporting to ensure that their approach allows for meaningful comparisons to be made between employees.

“However, mandatory ethnicity pay gap reporting can be very complex and resource intensive for businesses, and we do not want to impose new burdens on businesses as they recover from the impact of the pandemic."