Theresa May warns her radical plans to force 10,000 firms to reveal their ethnic salary gap may ‘uncover some uncomfortable truths’
- Theresa May launched proposals to make 10,000 firms publish the salary gap
- The PM warned it may expose inequalities that cannot be tackled overnight
- The new requirements are set to cover about 10million employees across UK
Theresa May today warned her radical plans to force firms to publish their ethnic salary gap could expose ‘some uncomfortable truths’ for business leaders.
The Prime Minster wants firms employing 250 or more staff to reveal the difference in how much they pay their white and black staff.
Launching the proposals in London today, she said the plan could reveal inequalities which ‘cannot be tackled’ overnight.
But she said the measures will help firms lay bare the scale of inequality lurking in workplaces and help improve diversity.
Speaking at the launch of the plan at London’s Southbank Centre, the PM said the audit would mean ‘people can achieve their potential whatever their background’.
She said said the figures may ‘uncover some uncomfortable truths that can’t be tackled overnight or just by Government’, adding: ‘There is an awful lot more to do.’
Theresa May (pictured today in London at the Race at Work Charter launch) today warned her radical plans to force firms to publish their ethnic salary gap could expose ‘some uncomfortable truths’ for business leaders
Prime Minister (pictured attending a roundtable meeting with business leaders whose companies are inaugural signatories of the Race at Work Charter) said the plan could reveal inequalities which ‘cannot be tackled’ overnight
Mrs May said that around half of ethnic minority employees believe they have to leave their current job in order to progress at work.
And she said nearly a fifth (19 per cent) of ethnic minority employees said they had experienced racist bullying or harassment at work.
The radical shake-up to tackle racial inequality mirror rules introduced earlier this year to expose the gender pay gap.
More than 10,000 companies employing over 250 staff would have to publish the figures annually. Around 10million workers would be covered.
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Mrs May said: ‘Too often ethnic minority employees feel they’re hitting a brick wall when it comes to career progression.
‘The measures we are taking will help employers identify the actions needed to create a fairer and more diverse workforce.’
Businesses are to be consulted on the initiative – part of a nationwide ‘Race at Work Charter’. Officials say the 250-staff threshold may be raised to spare smaller firms.
But Mrs May’s plan was criticised by free market think-tanks.
Matt Kilcoyne of the Adam Smith Institute said: ‘Rather than engaging with the hard task of removing structural barriers to opportunity many still face, this headline-grabbing measure will raise costs to business.
‘Migrants may face natural barriers to success from language, and illegitimate barriers from occupational licensing and discrimination.
‘These figures will mask the complex causes of racial inequality and be used to sour relations between Britons.’
Len Shackleton of the Institute of Economic Affairs said: ‘This is a Pandora’s Box. There are over 100 ethnicities in this country, most of which are as different from each other as they are from white Brits.
‘Forcing businesses to report on pay will result in meaningless statistics because the numbers for particular ethnicities within one firm are likely to be statistically insignificant, where nothing can be really be gleaned from them.
‘Essentially the Government would be burdening businesses with more bureaucracy without any useful return.’
The NHS will be among the employers required to set out plans to increase high-level recruitment from ethnic minority backgrounds
Matthew Fell of the Confederation of British Industry said pay transparency could be a catalyst for action.
But he warned: ‘Reporting must be done in a way that is supported by both businesses and employees, to recognise the wide range of ethnic groups and legitimate staff concerns about intrusiveness where sample sizes are small.’
Today’s announcement comes a year after the Prime Minister published a disparity audit she ordered when she entered Downing Street to show how people of different ethnic backgrounds were treated.
In 2017, average hourly pay for white workers was £11.34 – 10p higher than for the other ethnic groups together.
The gender pay figures published in April were criticised by some as a blunt measure that failed to account for why men and women might be doing different jobs and on different salaries.
The average – median – salary difference was 9.7 per cent in favour of men. The figures showed that 78 per cent of employers paid men more than women on average, and 14 per paid women more.
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