A leading Labour MP has renewed calls for urgent action to close the UK’s stark ethnicity pay gap, warning that without mandatory reporting requirements, progress towards workplace equality could take another 40 years.
A report by the Resolution Foundation revealed that Black, African Caribbean, and Black British employees earn, on average, 6% less than their white colleagues. This wage gap equates to £3.2 billion in lost income every year.
The situation is even more severe in London, where Black and minority ethnic employees face the highest pay gap in the UK. Despite the capital being one of the world’s most diverse cities, London’s ethnicity pay gap stands at an alarming 23.8%.
The divide is particularly pronounced in the public sector. A GMB London survey found that Black, Asian, and Minority Ethnic (BAME) public sector workers in the city earn, on average, 37% less than their white counterparts. Reports of favouritism, biased management, and discriminatory practices have been cited as driving factors.
These disparities contribute to wider social inequalities, with Black and minority ethnic groups disproportionately represented among those experiencing deep poverty in the UK.
As Chair of the London Parliamentary Labour Party, I believe addressing the ethnicity pay gap is both a moral obligation and an economic necessity.
A key first step is introducing mandatory ethnicity pay gap reporting — a policy that has proven effective in other areas. For several years, companies with more than 250 employees have been required to publish gender pay gap data, a measure that has contributed to gradual improvements.
Transparency works. I recall a friend who received an immediate £4,000 pay increase after her employer reviewed their gender pay data and identified disparities. The same principle applies to ethnic pay gaps.
Without concrete data, the scale of the problem remains hidden. But once exposed, inequality becomes harder to ignore, and companies face public pressure to take action.
If current trends continue, it could take four decades to close the ethnic pay gap. That timeline is unacceptable.
Shining a light on inequality forces change. Data makes visible which companies are making genuine progress and which are failing their workforce.
Labour has committed to introducing mandatory ethnicity pay gap reporting for large employers, alongside similar measures for disability pay gaps.
This is a campaign I have championed for years. Back in 2018, I co-launched the Maturity Matrix in partnership with Investing in Ethnicity, providing a framework for organisations to measure and improve their approach to diversity and inclusion.
As a former Shadow Minister, I consistently called for mandatory reporting to ensure accountability. Earlier this year, I led a debate in Parliament on pay inequality, which drew cross-party support for addressing pay gaps based on gender, ethnicity, and disability.
With Labour in Government, we have a genuine opportunity to deliver meaningful reform — but words must translate into action.
The Government recently conducted a public consultation on mandatory reporting for ethnicity and disability pay gaps. I urge ministers to follow through and implement these changes without delay.
Voluntary reporting has been inadequate. While many employers strive for fairness, some will only act if the law requires them to do so.
Mandatory reporting should also come with action plans. Companies must be required to outline specific steps they will take to address pay gaps and set clear targets for progress.
Data collection is only part of the solution. The ultimate goal is to close pay gaps entirely, and that requires accountability. Companies that refuse to engage or make meaningful progress should face financial penalties.
Government procurement policies also need reform. Public sector contracts should be awarded to businesses that demonstrate fair pay practices and a genuine commitment to equality.
Tackling pay inequality is not just about fairness — it makes economic sense. Research shows ethnically diverse organisations tend to perform better and are more profitable.
Progress on these issues has been driven by relentless campaigning from trade unions like GMB, grassroots groups such as the #EthnicityPayGap campaign, and organisations including UNISON, Action for Race Equality, the Runnymede Trust, and ShareAction.
The public appetite for change is clear. I also want to see disability pay gap reporting introduced, developed in partnership with disabled people’s organisations to ensure their voices lead the process.
The UK has a wealth of diverse talent ready to thrive. Fair pay for all is fundamental to building workplaces where merit is rewarded and inequality is rooted out.
Pay equality benefits everyone. By addressing disparities based on gender, ethnicity, and disability, we can create a more just, prosperous, and inclusive economy.
Now is the time to deliver on that promise. Equal pay for all is not optional — it is essential.
