Overhaul Equality Act to Save £10 Billion on “Bloated” HR Departments, says Think Tank

The Equality Act and other invidious diversity rules should be overhauled to save Britain £10 billion a year on “bloated” HR departments, a study from Policy Exchange has said. The Telegraph has more.

Policy Exchange, a Right-leaning think tank, said growth and innovation are being stifled by campaigns for inclusion and equality, as companies hire staff to pursue political ends rather than serving customers.

Britain’s HR sector has grown by 83% since 2011, expanding more than five times as fast as overall employment over the same period.

It means 1.6% of the workforce is now employed in human resources, far above America’s 1% and double the EU’s 0.8%. This translates into more than 200,000 workers, with incomes estimated at £10 billion per year.

Zachary Marsh, at Policy Exchange, called for the most damaging rules to be culled to boost the economy.

“If the Government is serious about growth, it should start by getting its own house in order and scrapping burdensome equality, diversity and inclusion rules and guidance that has created a mass of shadow regulation that businesses feel obligated to follow,” he said.

It follows growing concern on the British Right that regulations aimed at reducing discrimination have come at the expense of growth.

Iain Mansfield, the Director of Research at Policy Exchange and a co-author of the report, said the total cost is likely to be significantly higher, with the total impact on the economy “several times the direct costs”.

“These include such as anti-meritocratic hiring and ‘positive action’ schemes, the diversion of focus away from delivering for consumers towards regulatory compliance, and the overall impact of making the UK a less attractive place to invest and do business,” he said.

The report found that legislation has been supercharged by excessive regulation, a series of legal rulings and campaigns by activists.

This includes rulings which take the requirement of “equal pay for work of equal value” and apply it to different types of jobs.

Birmingham City Council paid cooks, cleaners and care staff – who were predominantly female – less than bin collectors and road workers, who are more likely to be men.

In another long-running case, workers are seeking as much as £1.2 billion from Asda for paying warehouse staff who are predominantly men more than shop floor workers who are largely female.

Worth reading in full.

The report calls for “systematic and comprehensive reforms to put business back in the driving seat” including:

• Extensive reform of the Equality Act by repealing the Public Sector Equality Duty, removing the clauses that permit “positive action” and tightening up the rules on equal pay to prevent abuse.
• Abolishing all EDI requirements in public procurement.
• Directing every regulator to review their guidance and revise and repeal all elements that promote EDI activities beyond core duties of non discrimination.
• Scrapping all regulatory requirements for identity-based targets on boards.
• Abolishing diversity requirements in advertising, broadcasting and other regulated industries.

How very sensible.