Ethnicity Pay Gap Reporting

Lord Boateng Excerpts

Monday 25th October 2021 Lords Chamber

Asked by

[Lord Boateng]

To ask Her Majesty’s Government what assessment they have made of (1) the benefits of mandatory ethnicity pay gap reporting, and (2) the joint call by the Confederation of British Industry, the Trades Union Congress, and the Equality and Human Rights Commission, for the introduction of mandatory ethnicity pay gap reporting.

[Lord Boateng (Lab)]

My Lords, the case for minority ethnic pay gap reporting is not only a profoundly moral one, it is intensely practical. Every person, regardless of their ethnicity or background, should be able to fulfil their potential at work. That is the business case as well as the moral case:

“Diverse organisations that attract and develop individuals from the widest pool of talent consistently perform better.”


Those are not my words. I am adopting them, but they are the words of the Chartered Institute of Personnel and Development, and they ring true.

The Government’s own review Race in the Workplace, conducted by the noble Baroness, Lady McGregor-Smith, estimated that having full representation of ethnic minority workers in the labour market would help reduce poverty across the country significantly and benefit the UK economy to the tune of about £24 billion a year—that is about 1.3% of GDP. The reality is that poverty is a fact of life for all too many in the black and ethnic minority communities. BAME groups experience a poverty rate that is twice as high as that of their white counterparts. Research indicates that poverty rates are about 50% for Bangladeshi groups, 47% for Pakistani groups, 40% for black groups, 35% for Chinese groups and 25% for Indian groups, compared with 20% for white groups in the UK.

The poverty is real. The challenge to British industry to improve its productivity, and to grow our economy in a post-Covid world, is also all too apparent; hence the need for the Government to act now on this issue, given that they consulted on the ethnic minority pay gap as long ago as October 2018. They closed that consultation in 2019, yet no response has ever been published. That is really inexplicable, given the degree of public concern about this issue.

Dianne Greyson is to be congratulated on her campaign, which produced over 130,000 signatures. That was what led to the debate on the issue in the other place. The Office for National Statistics has demonstrated only too clearly the need for the better collection of data. In addition, we now have the Confederation of British Industry, the Trades Union Congress and the Equality and Human Rights Commission all making the case for better data and for mandatory reporting in this area. The reason they do so is that if we do not successfully address the challenges of diversity in the workplace and the damage done to our economy by not securing the proper, fair and equitable promotion and retention of black and ethnic minority workers, with decent and fair rewards, the price to pay is all too high.

The challenge for the Government is to come up with a response to the questions raised. It really is not good enough to put this in the “all too difficult” box. Yes, we know there are challenges and trade-offs to be made in obtaining data that takes this issue forward; however, as the advances that resulted from the collection of data on gender have demonstrated, we know that, where we do have data, the transparency and the light of publicity thrown on glaring disadvantage and disparity change the situation on the ground—which gives hope to those currently prevented from realising their full potential.

Importantly, it also recognises that, out there in the wider world, it is already beginning to happen. There are some really good examples of best practice among employers, working with their trade unions and statisticians qualified to assist them in obtaining data that is really making a difference and linking that data to both a narrative that demonstrates what the company is doing to improve the situation and an effective strategy and policy to get them to a better place. Good examples are there. Network Rail and John Lewis are very good examples, and there are other employers showing the way.

But all employers are asking for better guidance. They are all saying, “Look, we want to produce data, but we need to be sure that we are all producing data on the same basis and we want to know that the Government are on our side and supporting what we are doing.” The silence from the Government is deafening, and also quite inexplicable when you look at what their own reviews demonstrate. It is inexplicable too in terms of an agenda that is about levelling up and improving everyone’s opportunities, as this is a UK-wide problem. The ethnicity pay gap in Humberside is something like 12.7%; in London it is far worse, at 23.8%. It is 10.3% in Scotland, where the good news is that its Government are now actively promoting and supporting the collection of this data.

So the question for the Government is to respond to the legitimate points made by the Trades Union Congress, the CBI and the Equality and Human Rights Commission. When asking for mandatory reporting and for the Government to seek to build on the success of gender reporting, they made the point:

“Reporting, done well, can provide a real foundation to better understand and address the factors contributing to pay disparities.”


The Government have been asked—and still there is no response—to support further work on this by the CBI, the trade unions and the Equality and Human Rights Commission. Professional statisticians have come forward with advice and expertise on this. The ONS wants to see progress in making sure that its own data better contributes to the resolution of these issues.

So will the Government now set a clear timeframe to implement this? Will they work with interested parties to develop the tools and resources required by industry to ensure that employers are supported and workers are confident in disclosing data in advance of making reporting mandatory? This can be incremental; it does not have to be done overnight. It does not have to involve all employers employing more than 250 people at once; it can be done incrementally.

The Government have the answer to these issues in their own review. They have the capacity to respond to the challenge laid down by all people of good will on all sides of both Houses for this action to be taken. The time for talking is over; now is the time to act. That was the title of the Government’s own review—Time to Act.