Dawn Butler MP: It's Time For Mandatory Ethnicity Pay Gap Reporting

The Labour MP says a diverse workforce that is paid fairly is more productive, better for the economy and creates a more just society.
Dawn Butler speaks on stage at the European Diversity Awards at Intercontinental Hotel on November 11, 2022 in London.
Dawn Butler speaks on stage at the European Diversity Awards at Intercontinental Hotel on November 11, 2022 in London.
Joe Maher via Getty Images

It is no secret that I have dedicated my career to fighting for fairness and racial equality. I write about it in my book A Purposeful Life. Unfortunately, our current government has made my job harder at every turn.

Ethnic minorities in the UK today face an uphill struggle. Low wages, insecure work, and discrimination in the workplace have pulled up the ladder for many talented people trying to start a career, or get a deserved promotion.

As news of the cost-of-living crisis continues to hit the headlines, including the shocking statistic that one in five people in the UK now live below the poverty line, often it is the most affected that get the least attention.

Black and minority ethnic people are much more likely to be in deep poverty than white people and it is they who are disproportionately feeling the squeeze.

Back in 2018, I thought our government had finally woken up to this crisis. After years of campaigning from myself and others from Labour, they said that mandatory ethnicity pay gap reporting should be introduced for Britain’s largest companies.

Sadly, five years later, the government has rowed back on its statement and instead introduced only voluntary guidelines. This is a too little, too late approach that will perpetuate workplace inequalities for millions of people.

That’s why today I am putting my support behind the Runnymede Trust and ShareAction’s call for the government to introduce mandatory ethnicity pay gap reporting, or EPG.

Mandatory reporting puts the onus on companies to disclose data about whether people are getting paid less as a result of their race. It’s a no-brainer: make such information public and it encourages company boards to look in the mirror and take real action, rather than paying lip-service to diversity and inclusion.

When I served as shadow secretary of state for women and equalities, I long called for compulsory ethnicity pay gap reporting, alongside mandatory gender pay gap reporting, to tackle pay discrimination and end pay gaps. I was proud that Labour made this important commitment in our general election manifesto. Now, I am continuing the fight.

To get a sense of the problem faced, the government’s voluntary EPG reporting guidelines have resulted in only 18 FTSE100 companies reporting their ethnicity pay gap.

This is why I am again calling for the government to take racial inequality seriously and legislate for mandatory ethnicity pay gap reporting for our biggest companies, or those employers with over 250 employees.

Not only this, but new legislation should require companies to release a document explaining the context of their ethnic minority pay gap levels and setting out a clear action plan to remedy any injustices. Only then will we have the right information to properly scrutinise the intentions of these companies and see whether they are showing a genuine will to change.

I am also calling on the government to provide additional guidance and support to companies to achieve progress, as well as conduct a review of their progress after two years.

Such measures should be obvious to any government that takes racial inequality seriously. There is broad support for mandatory pay gap reporting among members of the public and those in power would be wise to listen.

The word from Britain’s businesses is that EPG reporting works and cannot be introduced quickly enough.

Charities ShareAction and the Runnymede Trust recently produced a toolkit for investors to learn about the ethnicity pay gap and explain how they can encourage companies to report it. The response has been overwhelming: those companies who introduced EPG reporting found that it jump-started positive change from within.

There is a wealth of talent and drive in Britain today that is waiting to be unlocked. A diverse workforce that is paid fairly is more productive, better for our economy, and creates a more just society for us all.

Dawn Butler is the Labour MP for Brent Central and a former shadow secretary of state for women and equalities


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