TACKLING THE ethnicity pay gap could boost the economy by billions by forcing businesses to tackle racial injustice at work.

Labour’s shadow minister for employment rights Imran Hussain claimed that introducing a mandatory ethnicity pay monitoring would bring a £24 billion annual dividend for Britain.

The figure is based on calculations by Conservative peer Baroness Ruby McGregor-Smith, who’s 2017 report into racism at work found that the UK was losing the equivalent of 1.3% of GDP every year due to not getting the “full potential” of black and Asian workers who are held back.

The government has been accused of sitting on the results of a consultation into ethnicity pay monitoring for the past five years. The Department for Business, Energy and Industrial Strategy carried out the review in 2018, but last month DBEIS minister Paul Scully said that the government was still assessing next steps.

Earlier this week, the Women and Equalities select committee, headed by Tory Caroline Noakes, published a report that concluded there was “no excuse” not to bring in the measure, following the introduction of gender pay monitoring in 2017.

Former prime minister Theresa May, and the conservative-minded Confederation of British Industry (CBI) have also called for the government to bring in ethnicity pay monitoring.

But Boris Johnson and the equalities ministers Liz Truss and Kemi Badenoch have all attempted to kick the issue into the long grass by insisting they are still looking into it.

Labour upped the pressure this week, as shadow race minister Taiwo Owatemi said: “There is no excuse for the lack of ethnicity pay gap data. The government must implement this as soon as possible.”

Her employment rights colleague, Imran Hussain, tweeted: “Mandatory gender pay gap reporting has furthered the conversation on the barriers women face at work. 

“It’s now time for the Government to introduce mandatory ethnicity pay gap reporting. 

“Not only will this tackle inequality, it could boost the economy by £24 billion annually.”

In the absence of government action, many employers have been pressing ahead with ethnicity pay monitoring anyway. 

A survey last year by PriceWaterhouseCoopers in 2020 found that almost 70% of 100 large UK businesses surveyed are now collecting ethnicity data, up from 53 per cent in 2018.

However, there is growing concern that the failure of the Johnson government to provide leadership is leading to ‘good’ employers being undercut by ‘bad’ ones.

Giving evidence to the Women and Equalities committee, Wilf Sullivan of the Trades Union Congress (TUC), said: “It just undercuts the good employers who want to do this stuff, especially if there are costs to it, in our highly competitive market.”

The reluctance of the government to act is also holding back progress on firms publishing their data, and consistency of monitoring. Crucially, there is also a lack of guidance on companies producing action plans to help them address the race pay disparities revealed in their audits.

Noakes 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.”