PM urged to introduce ethnicity pay gap reporting

21 Mar 2023

Business in the Community (BITC), the Prince’s Responsible Business Network, has written to the Prime Minister and Leader of the Opposition calling for the introduction of mandatory ethnicity pay gap reporting for UK employers with over 250 employees. The letter asks the PM and the Leader of the Opposition, Sir Keir Starmer MP, to work together to legislate for mandatory ethnicity pay gap reporting as soon as possible.

BITC, Baroness McGregor-Smith and UK employers have been calling on the government to introduce mandatory reporting for some time. This new call for mandatory reporting comes as predictions using census data show that by 2051, nearly a third of working-age adults in England and Wales will most likely be from ethnic minority backgrounds. Using data from the McGregor-Smith Review, BITC has predicted that if this diverse ethnic talent is fully utilised, it could boost the economy by £36 billion by 2051, increasing £12 billion since 2017.

Currently, there are just over 888,000 employees who are employed by companies that publish their ethnicity pay gap which is less than 3% of the entire UK workforce. BITC research shows that without government action, it will take until 2075 for companies currently capturing ethnicity data to publish it.

Sandra Kerr CBE, Race Director at Business in the Community, said:

“The government needs to bring forward mandatory ethnicity pay gap reporting as a matter of urgency. Employers back it, evidence shows that reporting works so I’m not sure what government is waiting for. Legislating for companies to publish this data is only the first step, closing the pay gap is when the real work will begin. By continuing to ignore the inevitable, the government is just wasting time when we could all be working together to address the problem.”

Baroness McGregor-Smith CBE said:

“It has been six years since I published my review into race in UK workplaces and since then, there has been no tangible action taken by the government to address pay disparities for diverse ethnic groups. It’s clear that mandatory reporting is the only way to address the ethnicity pay gap, it’s too late for voluntary guidance. The government must make reporting mandatory and work with employers to ensure pay is equal for people from all backgrounds.”