07/06/2020 16:18 BST | Updated 07/06/2020 20:57 BST

Exclusive: MP Plans Law To Force Employers To Reveal Ethnicity Pay Gap

Black Lives Matter protests create moment to tackle "ingrained" racial injustice, Lib Dem leadership hopeful Layla Moran tells HuffPost UK.

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Larger employers should be forced to publish their ethnicity pay gaps to tackle inequality in the workplace, an MP has said.

Layla Moran said the Black Lives Matter protests following the death of George Floyd at the hands of American police provide an opportunity to tackle “ingrained issues” in society.

She has asked business lobby groups the CBI and British Retail Consortium (BRC), as well as the Trades Union Congress (TUC) for help in writing legislation to make companies with 250 or more employees publish their ethnicity pay gap.

The Liberal Democrat leadership candidate’s proposed bill would build on laws which already make firms of this size publish their gender pay gaps.

The Tory party pledged in its 2017 election manifesto to “ask” large employers to publish information on their ethnicity pay gap, but the government has not introduced any proposals following a consultation which ended in January 2019.

After Boris Johnson replaced Theresa May as Tory leader and prime minister, the commitment was not included in the party’s 2019 election manifesto. 

Official data shows employees in the Black African, Caribbean or Black British, other and white other ethnic groups on average earned 5% to 10% less than their white British counterparts between 2012 and 2018.

In 2018, employees from the Bangladeshi ethnic group on average earned 20.2% less than White British employees, according to the Office for National Statistics (ONS).

The percentage difference in median hourly pay between people of a white ethnicity and all those who belong to an ethnic minority group is largest in London at 21.7%.

According to the CBI, closing the ethnicity pay gap would give the UK economy a £24bn boost (1.3% of UK GDP).

Moran told HuffPost UK: “We are all grappling to come to terms with the death of George Floyd we have to make sure Black Lives Matter. 

“Critically we need to take this time to tackle some of the ingrained issues in society and use this moment to deal with the root causes once and for all. 

“Injustice anywhere is a threat to justice everywhere.

“One of the big issues is economic inequality and that feeds into social injustice.  

People gathered in Cambridge to hold a peaceful demonstration as part of a worldwide Black Lives Matter solidarity march on Sunday

“A big step towards dealing with this issue is mandatory pay reporting – we can shine a light on the injustice and make sure pay and working practices are improved.

“To make this happen I want to get bosses, employers and employees around the table and craft a law supported by all of them to bring about change. 

“The time is now. We have to act and the time is always right to do what is right.”

Labour peer Baroness Prosser is currently guiding a similar bill through the House of Lords but a source close to Moran said her proposals had better chance of becoming law by involving the CBI, TUC and BRC.

“Layla’s approach of bringing employers and employees together to craft a bill that works for everyone has a significantly higher prospect of being legislation than a backbench lord’s effort,” the source said.

“This is the first real chance we have to bring in Black and minority ethnic (BAME) reporting in years. It’s a real chance for a breakthrough.” 

TUC general secretary Frances O’Grady said: “TUC research has shown that far too many black and minority ethnic workers are stuck in insecure and temporary work, which has a huge impact on their life chances and pay.  

“This problem isn’t going to disappear without action. Ministers must confront inequality and racism in the labour market. The TUC has long called for government to introduce mandatory ethnicity pay gap reporting without delay.”    

The CBI has urged companies to voluntarily publish their ethnicity pay gap data but stopped short of backing mandatory reporting.

Chief UK policy director Matthew Fell said: “Closing the UK’s ethnicity pay gap will help to make our society fairer and overcome inequality at work. 

“Not only is it the right thing to do: the business case is watertight – diverse companies are better companies.

“Firms that are already reporting their ethnicity pay gap understand what long-term, meaningful action they need to take to tackle race inequality at work. They are leading from the front - improving how they attract, hire and promote employees from ethnic minority backgrounds.

“But there is much more to do until UK business is truly representative of the society it serves. Firms have to get better at speaking about race at work; developing campaigns to encourage employees to share their ethnicity; and creating strategies to improve BAME representation all the way up to the boardroom.”

A BEIS spokesperson said in a statement: “We want businesses to be fully reflective of the communities they serve, and have been exploring mandatory ethnicity pay reporting with UK employers as part of that effort.”