Financial benefits of equality laws are imaginary, says British think-tank
New equality laws have no economic benefit and only a questionable effect on discrimination, a report claims. The study published by the think-tank Civitas says that the supposed economic benefits of recent human rights legislation are “imaginary” and that even their symbolic value is “debatable”.
It claims that rather than saving the country £65million a year, as Government estimates suggest, the Equality Act 2010 will actually cost at least £10m annually while tying small businesses in red tape. The claims come after another study by the think-tank suggested that up to £1billion a year is spent on “mindless” data collection as companies are forced to comply with equalities legislation.
That report found that equality laws have created a cottage industry of bureaucrats who monitor but don’t actually reduce race or gender bias.
Ministers have also been criticised by a backbench Tory MP, Dominic Raab, for implementing costly and bureaucratic elements of Labour’s flagship Equality Act rather than scrapping them after taking office.
The law, which gained Royal Assent just before the election, aimed to improve fairness by banning discrimination against “protected groups” such as ethnic minorities, women, disabled people and homosexuals. It streamlined existing legislation and aimed to improve equal opportunities in the workplace.
The impact assessment published by the Government Equalities Office suggested the law would cost up to £283m to implement in its first year, but the costs would soon be recouped. It was claimed that society would benefit by as much as £62m a year from greater equality.
But in a new Civitas paper called Assessing the Damage, Nigel Williams, a statistician, claims that the costs of implementing the law are far higher while the savings are “largely imaginary”. He said that the official figures are based on the assumption that people will give up some of their prosperity in return for greater equality: “The value is ideological, nothing more.”
It also assumes that combating discrimination does not “harm growth” by dissuading small businesses from recruiting because of the “weight of regulations” and the “threat of an employment tribunal”.
A further £9m in annual savings is expected from the simplification of existing laws, but Mr Williams says this could be bettered by the mere “removal of the offending regulations”.
Meanwhile the prediction of another £4m annual benefit is based on the assumption that changes to the equal pay regime will lead to fewer employment tribunals. But Mr Williams claims the new law may lead to more legal claims against employers and will require even the smallest of firms to digest 800 pages of guidance.
He concludes: “Even if the changes are introduced with extraordinary efficiency by all concerned and the budgeted £200 million proves ample, the annual consequences of this legislation will serve not to pay back the costs, but to add to them. “The ideological benefits of the Equality Act are debatable at best. The financial benefits simply do not exist.”
A Home Office spokesman said: "The Equality Act replaced nine different laws and allowed us to scrap more than a hundred burdensome regulations. We are protecting individuals from unfair treatment without creating unnecessary red tape and simplifying the system to make it fairer for employers and employees. "We do not accept the Civitas assessment.”