PolicyLens

Green - Labour market

Strengthen Equality Act enforcement

Increase workplace equality enforcement, reporting duties and penalties for persistent discrimination.

Last updated: May 2026.

Read the policy-specific methodology note

Baseline capacity

The central case adds regulator, tribunal and public-employer compliance capacity above existing Equality Act enforcement.

  • Official equality-plan costs are tiny.
  • Stronger enforcement is a different policy.
  • Tribunal capacity matters.

Core trade-offs

Discriminated workers gain stronger remedies. Employers with poor practices bear compliance and litigation costs. Participation benefits are possible but slow.

  • Protected workers gain remedies.
  • Employers face compliance costs.
  • Output benefits are slow.

Illustrative fiscal impact

+GBP 0.2bn to +GBP 3.0bn. Central estimate: +GBP 0.8bn.

  • Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
  • Gross costs are separated from tax, NI and benefit offsets.
  • Private business costs are not automatically fiscal costs.
  • Behavioural responses widen the range materially.
  • This is not an official costing.

Economic impact by 2027-28

  • Jobs: May improve participation, but compliance and litigation can reduce marginal hiring in exposed firms.
  • Wages: Could reduce discriminatory pay gaps, not raise pay generally.
  • Prices: Small aggregate effect; compliance-heavy sectors may pass through costs.
  • GDP / productivity: Short-run likely mildly negative; long-run matching gains uncertain.

Assessment

Stronger enforcement can improve fairness, but the economics are not free. It adds compliance and litigation costs immediately, while labour-market participation and matching benefits are uncertain and slower.

Confidence: Low. Official equality-plan costs are small; a serious enforcement regime is not costed.

Main risks

  • Tribunal backlog: More claims may worsen delays unless capacity rises first.
  • Compliance burden: Small firms may face fixed reporting and legal costs.
  • Weak targeting: Broad duties can produce paperwork without reducing discrimination.

Safeguards

  • Fund EHRC and tribunal capacity.
  • Target repeat offenders first.
  • Publish outcome metrics, not paperwork.

Academic evidence

Autor, Kerr and Kugler, Economic Journal, 2007

Does Employment Protection Reduce Productivity?

Employment-protection changes can reduce productivity where firms face higher firing and adjustment costs.

Supports caution on policies that raise dismissal, scheduling or adjustment costs.

Does Employment Protection Reduce Productivity? (2007)

UK government evidence

Equality and Human Rights Commission, 2025

Strategic plan 2025 to 2028

EHRC strategy sets enforcement priorities for equality and human-rights law.

Relevant to stronger Equality Act enforcement.

Strategic plan 2025 to 2028 (2025)

Department for Business and Trade, 2026

Employment Rights Act 2025 - Economic Analysis

The ERA economic analysis estimates around GBP 1bn annual direct business cost before social-care bargaining.

Provides official baseline costs and affected groups.

Employment Rights Act 2025 - Economic Analysis (2026)

Department for Business and Trade, 2026

Employment Rights Act 2025 impact assessments

The IA collection separates guaranteed hours, unfair dismissal, fire and rehire, union and equality measures.

Prevents treating broad rights packages as one undifferentiated pledge.

Employment Rights Act 2025 impact assessments (2026)

Sources

Other Green policies

PolicyLens estimates are illustrative and not official costings.