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My Lords, I was delighted to hear in the gracious Speech a reference to unlocking young people’s full potential. This reminded me of what we hear so often from businesses: that their most important asset is their people and the talents that they bring. Sadly though, even in 2019, not everyone gets a fair crack of the whip to demonstrate, develop and use their talents at work. My noble friend the Minister mentioned in her opening remarks the Government’s commitment to opportunity for all, which I welcome. However, not everyone enjoys the equality of opportunity to make the most of what they have and go as far as they can. What many of those who experience inequality of opportunity have in common is that they also have protected characteristics as defined by the Equality Act 2010. Incredibly, almost 10 years since that Act was passed by your Lordships’ House, several protected characteristic groups are still excluded from contributing to business and our economy to their full potential.
In 2017, ethnic minorities had an employment gap of almost 13% compared to white workers; the gap for disabled people is still hovering at around 30%. Just recently, several Members in the other place called for greater protections for pregnant women and new parents in the workplace, highlighting inequality of opportunity to stay in or return to work. But it is not just about getting and keeping a job. Equality of opportunity also means having the equal opportunity to get on and for some, on merit, to get to the very top of their profession. I think that we can all agree that meritocracy is a principle that underpins a modern, successful economy and that an individual should be enabled to climb as far as their talents take them, not as far as others’ preconceptions and, in some cases, negative attitudes determine. Yet the situation with regards to career progression is arguably even worse than for recruitment. Unbelievably, in 2019, there are more CEOs in the FTSE 100 called Steve or Stephen than there are female CEOs or CEOs from an ethnic minority background.
It makes no sense for big businesses to limit their talent pool. Research demonstrates that nurturing a diverse workforce is not something “good” to be done at a cost to your bottom line; it is something that adds value to it. Indeed, the 30% Club has found that companies in the top quartile for gender diversity in their executive teams are 21% more likely to experience above average profitability than companies in the fourth quartile. Credit Suisse ESG has established that firms with better LGBT inclusion have on average 3% higher performance and LGBT Great, which promotes LGBT equality in the investment and savings industry, found that 80% of all millennials—the future of our workforce—actively seek employers that visibly value diversity and inclusion.
Some businesses are embracing diversity as a business strategy, but there needs to be more consistency and transparency in how it is done. Government and the big business community need to send a clear signal that, together, they are committed to moving at pace and with purpose to secure equality of opportunity and to enable individuals to use their skills and talents to realise their potential. To their credit, the Government recognised this when they took bold action to remedy inequality of opportunity for women by introducing mandatory gender pay gap reporting in 2017. This positive and bold step was taken with considerable support from the business community. But, if equality of opportunity is to mean anything, and if we want to harness all the latent potential in our workforce for the economy, there must be equality of opportunity for all protected characteristic groups. There must be consistency in how business and government move towards equality of opportunity. Requiring the publication of workforce data—the baseline starting point—is an essential first step before we can make, or even measure, progress.
That is why my workforce information Bill requires companies with over 250 employees to report on data relating to pay, recruitment, career progression and a breakdown of their leadership at board level, across all protected characteristics. Monitoring progression is crucial not only because equality of opportunity does not stop at simply getting a job but because inequalities can cement themselves at the top of an organisation and trap the rest of it in a culture of exclusion.
I am delighted by the support that my Bill has already attracted, from Donna Miller at Enterprise Holdings, LGBT Great, PinkNews, my noble friend Lady McGregor-Smith, Andy Street, the Mayor of the West Midlands, Fleur Bothwick at EY, Caroline Casey, founder of The Valuable 500, the pro-business movement to put disability on the agenda, and many others. Ultimately, it comes down to this simple question: either we believe in equality of opportunity or we do not. There is no halfway house. Businesses themselves, quite rightly, demand a level playing field for fair competition. The proposals in my Bill simply apply the same principle to the workforce.
My final point is this: given that my Bill came 59th in the ballot, I am not absolutely sure that it will complete all its stages in this Session, so I take this opportunity—through the good offices of my noble friend the Minister—to urge my party, as the party of opportunity and business, to commit in its manifesto to introducing mandatory workforce reporting as set out in my Bill. I am sure that other parties will want to consider doing the same.