The Government loves audits and press releases, but not action to end unfair pay

Two years after the Government consulted over the ethnicity pay gap, nothing has changed. So says Dawn Butler MP, former Shadow Secretary of State for Women & Equalities.

When the Government announced a consultation on ethnicity pay gap reporting in 2018, I knew that nothing would come of it.

Two years later, there has still been no movement from the Government on this vital issue. Sadly, they have form here – announcing hundreds of consultations, issuing thousands of press releases and following it up with zero action.

As the former Shadow Minister for Women and Equalities, I have long challenged the Government to take action, not just audits. It is important to make clear that the reason for these campaigns is fairness.

When it comes to mandatory gender pay gap reporting, which I and so many campaigners and organisations had called for, for a long time, the Government had to be dragged kicking and screaming into doing it. But still, this reporting has no teeth or sustainable action. For example, there is no requirement to publish an action plan, let alone take action.

There may have been progress when it comes to ethnicity pay gaps, with the ONS finding the pay gap between white and ethnic minority employees has been reducing and now stands at 2.3%, however, there is still such a long way to go to tackle racial inequality.

And as the ONS said, the national figures mask a wide variety of experiences among different ethnic minorities. For example, we know that Pakistani workers had the lowest average hourly wage at £10.55 – a pay gap of 15.5% – while White and Black African workers are the next lowest with £10.57.

There are other concerning reports too, such as one from the Bank of England who found in 2019 that ethnic minorities in the UK earn 10% less than white workers.

We also know there are stark differences in different regions of the UK. London has the largest ethnicity pay gap, with White British employees paid almost a quarter (23.8%) more than their Black, Asian and minority ethnic colleagues. It is unjust and simply wrong that this exists in one of the most diverse capital cities in the world.

People should be paid fairly on merit – no one should be paid less for their work because of the colour of their skin, their ethnic background or their class. This is why we need reporting on ethnicity pay gaps too – if you measure it, you know what the problem is and can fix it.

We know that action can be taken, there just needs to be a will to do it. I praise companies, like AAT, who are voluntarily monitoring, publishing and acting on data. Those businesses will see rewards in staff retention, bottom line and customer goodwill.

London Mayor Sadiq Khan has also showed leadership when he announced that comprehensive data on the pay gap affecting Black, Asian and minority ethnic employees for all organisations in the Greater London Authority Group would be published, making it among the first employers in the country to do so.

So, if the Mayor and some private companies can do it, why can’t the Government with their abundance of resources mandate it?

I am proud to have been one of the first to call for compulsory ethnicity pay gap reporting, and when I was Shadow Minister for Women and Equalities, I committed this pledge to Labour’s election manifesto.

This would also require businesses to demonstrate with action plans how they will tackle their pay gaps, taking the onus away from the employees to call out pay inequality and placing it on employers. This means that real action would be taken to tackle the underlying reasons for pay gaps.

As Chair of the All-Party Parliamentary Group for Governance and Inclusive Leadership, I launched the Maturity Matrix in Parliament. This free guide was issued to big businesses as a toolkit for improving opportunities in the workplace for BAME employees. 

This Maturity Matrix, as well as having a focus on achieving pay parity by pushing for pay gap reporting among many other guidelines, seeks to ensure that BAME employees have equal access to recruitment opportunities and career progression. Because having representation at all levels is vital for good decision making.

I remain strongly committed to ensuring that both the Government and big businesses do their part in stamping out inequality throughout the UK.

I hope the Government will finally take action and, as a first step, introduce ethnicity pay gaps to help enact positive change for all.

About the author

Dawn Butler is Labour MP for Brent Central. She is a former Shadow Secretary of State for Women & Equalities.

AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.