Gender pay gap reporting has been mandatory since 2017 for companies with over 250 employees but a new report by the Women and Equalities Committee has highlighted that no such condition currently exists to monitor pay disparities for workers of different ethnicities.

The members of the committee include Shipley MP Philip Davies but he voted against the findings of the report.

The report states the Government launched a 2018 consultation on the idea which closed in January 2019 but is yet to bring forward any legislation. It recommends that a mandate for doing so is put in place by April 2023.

The call has been made by a committee chaired by Conservative MP Caroline Nokes

Chair of the Women and Equalities Committee, Conservative MP Caroline Nokes, said: “The Government’s failure to move forwards on ethnicity pay gap reporting is perplexing.

“We already have the systems and structures in place to start reporting on the ethnicity pay gap, as well as a clear impetus- tackling inequality benefits not only marginalised groups, but the whole economy. The Government has no excuse.

“All that is lacking, it seems, is the will and attention of the current administration.

“Last week, the Government made bold promises to ‘level up’ geographically.

“Time and again it proves itself to be blind to the importance of levelling up within our communities and address long-standing disparities along the lines of protected characteristics.

“By taking this small step, the Government would demonstrate its commitment to working with business to reduce inequality.”

The report notes that many businesses are already taking steps to address the issue themselves, with the number of employers publishing their ethnicity pay gaps increasing from 11 per cent in 2018 to 19 per cent in 2021.10

It said that part of the intention of new legislation would be to help companies identify trends in their own organisations.

“The Government has acknowledged that ethnicity pay gap reporting should be mandatory,” it said. “Businesses are ready for Ministers to follow through on this commitment and bring forward legislation.

“We recognise that capturing and reporting ethnicity pay gap data is a more complex exercise than for gender, especially given disproportionate sample sizes of ethnicity across the UK.

“Solutions are available as long as employers are willing, and the purpose of the exercise is clear.

“Ethnicity pay gap reporting is not about producing a league table or punishing organisations who, due to geographic location, may not have access to the same talent pool.

“A pay gap is an indicator for employers to identify, understand and address trends in ethnic disparities across their own workforce.”

Government yet to set out plans

Small Business Minister Paul Scully has said the Government “will set out our response in due course” on the issue of ethnicity pay gap reporting.

In a letter to the Committee last month, Mr Scully said the consultation had shown there are “genuine difficulties” in designing an accurate and helpful methodology.

He said: “The Government is committed to taking action on this matter but we need to ensure that we focus on the right issues which will genuinely help to move us forward.

“I very much hope that I shall be in a position to say more shortly. We continue to assess next steps.”

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MPs call for ethnic pay gap reporting to become mandatory next year