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A government-backed review has called for many firms to publish a breakdown of their workforce by race and pay. The report by Baroness McGregor-Smith said the economy could receive a £24bn annual boost if businesses stamped out ethnic inequality.

It found that people from black and minority ethnic (BME) backgrounds were still often disadvantaged at work.

But the government has ruled out legislation on such a breakdown, opting for a voluntary approach instead.

“The time for talk on race in the workplace is over, it’s time to act”, said Baroness McGregor-Smith, whose report was commissioned by the former business secretary Sajid Javid.

Her year-long review found that employment rates amongst people from BME backgrounds were 12% lower than for white counterparts.

They were more likely to work in lower paid and lower skilled jobs despite being more likely to have a degree, and just 6% reached top-level management positions, the report found.

Baroness McGregor-Smith said the UK had a structural, historical bias that favoured certain individuals.

“We spoke to a lot of junior people in organisations. They don’t think that this agenda is changing”, she said.

‘Economic damage’

One of her main recommendations was legislation to make firms with more than 50 workers publish a breakdown of their workforce by race and by how much they are paid.

“If we don’t see a surge of people taking that up because they have too many other priorities well then fine, we’ll legislate,” she said. “That’s my recommendation”.

Firms should draw up five-year diversity targets and nominate a board member to deliver them, she said.

She also wants to see diversity as part of public procurement guidelines.

And her report claims that tackling barriers to progression could boost GDP by 1.3%.

“The consequences of continuing to do nothing will be damaging to the economy and to the aspirations of so many,” she said.

‘Discrimination won’t disappear’

Baroness McGregor-Smith was one of the first Asian women to lead a FTSE 250 company. She ran the outsourcing group Mitie for nearly 10 years until she stepped down as chief executive in 2016.

She said that overt racism does still occur in workplaces, but she highlighted unconscious bias as being more pervasive and potentially more insidious.

Only 74 FTSE 100 companies replied to her call for data for the report. She said that she was shocked that only half of those were able to share any meaningful information.

Last year the Equality and Human Rights Commission said that the life chances for young minority ethnic people were “the most challenging for generations”.

A study by the TUC also found that Black, Asian and minority ethnic workers were a third more likely than white workers to be underemployed.

Responding to the McGregor review, the TUC’s general secretary Francis O Grady said that “without government action, racist discrimination at work won’t simply disappear”.

“Ministers must act on the report’s recommendations, including requiring companies with over 50 employees to publish data on race and pay.”

‘Voluntary approach’

Business minister Margot James said: “Outdated attitudes or lack of awareness about ethnicity in the workplace must be challenged.”

“The economic benefits of harnessing untapped talent is huge and I urge employers to implement these recommendations to ensure everyone can reach the top of their career – whatever their background.”

But the minister ruled out new laws on firms.

“We believe … the best method is a business-led, voluntary approach and not legislation as a way of bringing about lasting change,” she said.

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