Ethnicity Pay Gap: Five key points from the debate in parliament

by Mayowa Ayodele

After an e-petition garnered over 130,000 signatures, it was announced in July that a debate on the Ethnicity Pay Gap would take place in September. Years of campaigning by groups such as the #EthnicityPayGap campaign team have helped keep the issue on the national agenda. These are the key takeaways from the debate on Monday.

Voluntary reporting is "inadequate"

Opposition MPs emphasised the inadequacy of voluntary reporting during Monday's debate. The Commission on Race and Ethnic Disparities had endorsed voluntary engagement to disclosing the ethnicity pay gap, but both the MP for Erith and Thamesmead Abena Oppong-Asare and the MP for Bath Wera Hobhouse highlighted the shortcomings of this approach.

Currently, only 13 FTSE 100 companies report their ethnicity data publicly. The MP for Bath argued that a voluntary approach to the issue had driven "slow and inconsistent progress."

Government action is needed if we are serious about tackling the pay gap, its causes and its effects. As with gender pay gap reporting, there is a clear case for introducing mandatory ethnicity pay gap reporting. I ask the Government to set out a timetable for getting that into law.

Wera Hobhouse

She also cited the government’s implementation of gender pay reporting, noting that a voluntary initiative resulted in only a limited number of companies sharing meaningful gender pay gap statistics.

There is a desire for mandatory pay gap reporting in the business world 

The SNP’s Kirsten Oswald remarked that beyond the moral arguments for ethnicity pay gap reporting, there was a business imperative too. Baroness McGregor’s 2017 Race in The Workplace report suggested that equal participation and progression across ethnicities could be worth an additional £24 billion to the UK’s economy, and data on the ethnicity pay gap could play a role in this.

During the debate, there was a consensus that businesses are keen to see reporting of the ethnicity pay gap.

The Chair of the Women and Equalities Committee Caroline Nokes argued businesses were "crying out for it" and wished to see it implemented mandatorily.

She recalled a conversation she had with Black female entrepreneurs and spoke further about the support which existed for the proposal.

I remember a fantastic meeting that I had with a group of black female entrepreneurs. The first thing that they said to me was, "We must have mandatory pay gap reporting." There was a very good reason why they wanted it to be mandatory: they had spoken to over 100 FTSE companies that all wanted to report, but were nervous about how. They were nervous about the metrics they should use and whether their ethnicity pay gap reporting would be comparing ‘like with like’ with other comparable organisations, which is why those entrepreneurs said to me, "We need you to put pressure on Government. Unless it is mandatory, it will not happen in a coherent way, or in a way against which companies can be measured."

Caroline Nokes

Earlier this week, the Chartered Management Institute (CMI) released findings which showed 8-in-10 managers believed large organisations should be required to report their organisation’s ethnicity pay gap. SME’s appear to be on board with the proposals as well. In July, the CBI joined the TUC in demanding that the government go beyond the Race Disparity Unit’s recommendations and implement mandatory ethnicity pay gap reporting.

London: A testing ground for pay gap reporting?

Elliot Colburn, MP for Carshalton and Wallington, argued that London could be the "ideal" location to test ethnicity pay gap reporting before making it mandatory across the country. Colburn, who also raised the question of how data would be disaggregated if collected, suggested that ethnicity pay gap reporting could encounter issues in less diverse areas of the country.

...ethnicity breakdown in the population can alter drastically depending on where someone lives and can be made up of a much larger number of categories. That then presents a number of data protection issues, because data of that kind must never inadvertently reveal the identity of the person it reports on. For example, a small business in a predominantly white community could inadvertently reveal information about employees’ pay for just one of their employees.

Elliot Colburn 

This approach, however, is unlikely to satisfy campaigners who are pushing for pay gap reporting as a matter of urgency. As Steve Bonnar, the MP for Coatbridge, Chryston and Bellshill explained, progress in addressing racial inequalities has been too slow. With the impact of these inequalities still visible in the labour market, sweeping measures are increasingly preferred over incremental steps.

In the words of Caroline Nokes, "Just because something is difficult or complicated, that does not mean that we should not do it."

A focus on systemic change is still prioritised (by some)

As stated numerous times on this website over the last 18 months, the nature of the disparities we see across several areas of society point to systemic inequalities that must be addressed.

Abena Oppong-Asare, MP for Erith and Thamesmead, made a similar remark when she stated that ethnic pay disparities do not exist in isolation but are part of what she describes as "broader structures of racism that affect black and Asian minority people in every part of their lives." She emphasised the importance of addressing these concerns in a more comprehensive manner.

"I have previously called for the Government to implement a race equality strategy and an action plan covering areas such as education, health and employment. I feel that would address the structural inequalities that exist. At the centre of that, I believe there must be action to tackle discrimination in the workplace, unequal access to training, finance and opportunities, and the ethnicity pay gap, which brings me specifically to this petition."

Abena Oppong-Asara

She did also caution against making broad statements regarding ethnic minorities as a whole. She referred to an ONS study which showed that even among groups that are considered ‘ethnic minorities’ there are notable differences in earning power.

More questions about government consultation

By the session’s end, it was clear that patience as to when the government would publish its consultation on the ethnicity pay gap was wearing thin.

The consultation was launched in 2018 under Theresa May’s administration and sought feedback on the type of information employers would be required to publish, as well as the different ways this could be done. It ran from October 2018 to January 2019, but responses to the consultation are yet to be published.

Paul Scully, Conservative MP and under-secretary for the Department for Business, Energy and Industrial Strategy (BEIS) faced several questions from MP’s over the lack of tangible progress over the last two years, with many left unimpressed by the current state of affairs.

Scully focused on the "statistical and data issues" that could affect ethnicity pay reporting, as stated in spring’s CRED report, but the overwhelming frustration at the lack of progress was clear.

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?

Kirsten Oswald

The government intends to publish the results of the survey later this year, according to Elliot Colburn, MP for Carshalton and Wallington.

Nonetheless, Dianne Greyson, who founded the #EthnicityPayGap campaign in 2018, expressed similar discontent with the lack of progress via her personal social media channels.

I expected to hear that there was a process being drawn up to present at the next debate with a view to agreeing a way forward. All I heard was excuse after excuse, as to why it is difficult to make Ethnicity Pay Gap reporting mandatory. They have had two years since the consultation to at least draft something however nothing came forth.

Dianne Greyson