Black and minority ethnic workers are losing out on £3,200,000,000

Metro

01-07-2025

No one should be paid less because of their ethnic background, but unfortunately, the disparity is stark.
Nationally, there is a 6% pay gap for employees from Black, African Caribbean or Black British ethnic groups, compared to their white counterparts. And according to a Resolution Foundation 2018 report, this amounts to £3.2billion in lost wages.
The bad news doesn't stop there, though. London specifically has the largest gap in the UK at a shocking 23.8%, which is appalling because it is one of the most diverse capital cities in the world.
But it gets worse – in specific sectors, the gap is even more pronounced. A GMB London survey showed that London's Black, Asian, and Minority Ethnic (BAME) public sector workers take home on average 37% less than their white colleagues, which is reportedly due to reported favouritism, management bias, and malpractice.
On top of that, we already know that Black and minority ethnic people are much more likely to be in 'deep poverty' than white people.
I want to close the ethnicity pay gap. And as the Chair of the London Parliamentary Labour Party, I want to see serious action to close that huge London pay gap, specifically.
I believe the first step to tackle this is to introduce mandatory ethnicity pay reporting. And I have found that it's easier to convince people to acknowledge the ethnicity pay gap once you tell them about the gender pay gap first.
For several years, companies of 250 employees or more have been required to report data on their gender pay gaps. I believe it is no coincidence that the gender pay gap has reduced over time.
I remember one friend telling me that her company, upon realising their gender pay gap, gave her an instant £4,000 raise.
Companies should also have to report their ethnicity pay gaps.
If we measure something, we can fix it. But at the current rate, it will take another 40 years to fix the ethnicity pay gap.
Shining a light on inequality and injustice is vital. So having the data out there pushes companies to act, and it shows you who is working to improve – and who isn't.
It was in the Labour Party's manifesto that the Government intends to deliver mandatory ethnicity pay gap reporting for large employers – as well as disability pay gap reporting.
I welcomed this, as I have campaigned for it for so long.
Back in 2018, as Chair of the All-Party Parliamentary Group (APPG) on Governance and Inclusive Leadership along with Investing in Ethnicity, we launched the Maturity Matrix to spark this type of dialogue. And I regularly called for mandatory reporting when I was a Shadow Minister.
Fast forward to earlier this year, I led a debate in Parliament about pay gaps in the workplace, to urge long overdue action. I was delighted to see that there was cross-party support for tackling the various pay gaps that exist in the workplace – and I had a clear indication that the Government is committed to acting on these issues.
I believe that now, under Labour, we have the chance to tackle pay inequality. It's another chance to show the difference a Labour Government makes.
But I want to make sure that it happens.
The Government recently held a public consultation on mandatory ethnicity and disability pay gap reporting, which they said would help shape the Government's policies. I urge the Government to follow through with delivering it.
Voluntary reporting, often cited as an alternative, is insufficient to tackle the problem. The truth is, the minority of bad companies will not act unless they are forced to.
What I have long proposed is that mandatory reporting should be accompanied by action plans for those companies who do report pay gaps. These action plans should set out what exactly the companies will do to address their pay gaps, to set them on the path to equality.
Because we don't just want to identify pay gaps, we want to close them. And I want to see the option of fines to be included in the regulations, for those companies who refuse to engage or close their pay gaps.
I have also long argued that Government procurement contracts (when government departments hand out contracts to deliver services) should be prioritised for companies who are paying their employees on an equal basis. Then, you incentivise progress, with those who have good practices benefitting.
The case for action is not only about fairness and equality – it has been shown that the most ethnically diverse companies are more likely to be profitable too.
Many organisations have worked on this issue and the progress made is thanks to our collective voice. GMB, my trade union, are campaigning on this with their 'Mind the ethnicity pay gap', which aims to shine a light on the disparities in pay between ethnic groups.
And there are so many others – from the #EthnicityPayGap Campaign, to UNISON, Action for Race Equality, the Runnymede Trust, ShareAction and many more. More Trending
The demand is clear, and I am convinced the consultation will have backed that up. I want to see disability pay gap reporting along the very same lines too – but that must be led by, and centred around, disabled people's voices.
There is a wealth of diverse talent across our country that is ready to flourish. All we want is better and fairer workplaces where people are paid fairly on merit.
Equality benefits everyone. So, if we get this right on gender, ethnicity, and disability, we will create a better and fairer working environment for everyone.
It's time to deliver equal pay for all.
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