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8 June 2020updated 29 Jul 2021 9:28am

Why the UK must force companies to publish their ethnic pay gap

Employees from BAME groups earned 5  to 10 per cent less than their white British counterparts from 2012-2018. 

By Layla Moran

The Black Lives Matter protests taking place across the UK following the death of George Floyd have shone a spotlight on the systemic racial inequalities in our society. As a liberal, equality lies at the heart of my values. This movement reminds us that as a society we have a long way to go. This is not just about police brutality, it’s about entrenched economic disadvantages and social prejudices that make it harder for many people from a black and ethnic minority background to succeed. We now need to harness the energy and passion shown by the peaceful majority of protestors to drive long-term change and build a fairer society, in which opportunity for all is a reality and not just a buzzword.

One of the biggest issues facing BAME communities is continued inequality in the workplace. So with this in mind, I have written to business lobby groups the CBI and British Retail Consortium (BRC), as well as the Trades Union Congress (TUC) to help draw up legislation that would require companies with 250 or more employees to publish their ethnicity pay gap. My proposed bill would build on laws that already make firms of this size publish their gender pay gaps. I want to get employers and employees round the table and together craft legislation that could help tackle this issue once and for all. My bill has a greater chance of success than previous attempts, due to bringing all these groups together to create a bill that employers and employees can support.

The evidence for why we should act is stark. Employees in the black African, Caribbean or black British, other, and white other ethnic groups on average earned 5 per cent to 10 per cent less than their white British counterparts between 2012 and 2018. Employees from the Bangladeshi ethnic group earned 20.2 per cent less than white British employees. The percentage difference in median hourly pay between people of a white ethnicity and all those who belong to an ethnic minority group is largest in London, at 21.7 per cent.

The Conservative Party pledged in its 2017 election manifesto to ask large employers to publish information on their ethnicity pay gap. Yet three years on, the government has not introduced any proposals, following a consultation that ended in January 2019. Instead it has fallen to the House of Lords to propose changes through a bill still making its way through parliament. It is finally time for the government to act. Injustice anywhere is a threat to justice everywhere.

The case for change is clear – embracing a wide range of talent is not just a matter of equality, it represents a real source of competitive advantage. Race equality across the UK labour market would result in an estimated £24bn boost to the economy per year, equivalent to 1.3 per cent of UK GDP. Compulsory gender pay reporting has been a revelation in UK workplaces, putting pressure on firms to do more to tackle inequality. Extending this requirement to ethnic minorities is a logical next step.

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I don’t claim to have all the answers to this complex issue – no single organisation does. But we need to work together and focus on what will have the greatest impact, even if it feels uncomfortable or unfamiliar. By improving transparency, we can help to bring about long-term change. And by sharing what we’re doing to tackle inequalities and learning from other organisations that are doing the same, we can ensure our workplaces are positive, vibrant and inclusive places for people to spend their careers. Diversity and inclusion is not a zero-sum game: we will all benefit by supporting each other to build a fairer and more equal society.

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