Ethnicity Pay Gap

Called for mandatory ethnicity pay gap reporting, citing the need to address structural inequalities in employment. Mentioned that only 13 of the largest 100 employers have published their ethnicity pay gaps voluntarily and argued that consistent methods are necessary to benchmark against each other. The information that the Minister has provided is very helpful, particularly on the work that Business in the Community has done and also his quoting the report from the Commission on Race and Ethnic Disparities. I would be grateful if he clarified exactly what the Government have done since they conducted the survey and consultation in October 2018. I am still not clear what the Government have done since October 2018. I would be grateful if the Minister would clarify and set out what the Government have done since then to address this issue.

My hon. Friend highlighted the lack of mandatory ethnicity pay gap reporting, noting that without it we cannot truly know the full scale of the problem. She pointed out discrepancies among different ethnic groups, with gaps reported at 2.3% overall but as high as 16% for Pakistani groups and 8% for black groups. The Minister said the issue is not about racism. He also conceded that the data that has been received is not very clear, because a number of different groups are not actually reporting. How can he be so sure that the issue is not racism when the small amount of data he does have shows there is a difference between the pay of ethnic people and their white counterparts?

She discussed the need for mandatory ethnicity pay gap reporting, citing a meeting with black female entrepreneurs who advocated for it. She highlighted that while some companies voluntarily report, others require a framework to ensure consistency and comparability. She also noted the importance of intersectionality in addressing challenges faced by BAME individuals, particularly during the pandemic. It is interesting to note that Zurich commented that 87% of its workforce had identified which ethnicity they were from, so why is BEIS doing so much worse than a private sector company?

She agreed with Steven Bonnar's points, emphasising that there is a strong business imperative for ethnicity pay gap reporting in addition to the equality imperative. Supports the introduction of ethnicity pay gap reporting as essential for tackling pay discrimination. References the Chartered Management Institute's survey indicating that 80% of managers support mandatory ethnicity pay gap reporting. Cites research showing women's earnings remain below those of male counterparts despite gender pay equality efforts. Criticizes the Cabinet Office's Commission on Race and Ethnic Disparities report for hiding behind data complexity to recommend voluntary reporting only, contrasting this with Lady McGregor-Smith's emphasis on transparency. I am interested in what the Minister is saying. Can he clarify something: are the Government working through that methodology? What specifically are they doing, and when do they expect to have a system in place that does take account of the complexity that we all acknowledge but which absolutely must not get in the way of our making progress?

He expressed sadness over the persistence of structural racism in society, noting that ethnic minorities are less likely to find career-type work compared to their white counterparts. He highlighted a statistic from the Office for National Statistics showing minority ethnic employees in London earn 24% less than their white colleagues. Bonnar called for mandatory reporting requirements akin to gender pay disclosure and urged the Government to implement such measures swiftly.

Ms Hobhouse congratulated the petitioners and highlighted the importance of addressing the ethnicity pay gap. She noted that women, including ethnic minority women, face significant financial inequalities. While gender pay gap reporting has shown effectiveness, the ethnicity pay gap remains unaddressed. She called for mandatory ethnicity pay gap reporting to drive transparency and progress.