Strengthen Equality Act enforcement: calculation note

Central fiscal result

+£0.8bn - Net public-finance impact in 2027-28

Low case: +£0.2bn. High case: +£3.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Increase workplace equality enforcement, reporting duties and penalties for persistent discrimination.
• Baseline is current law and published official data unless stated.
• Private business costs are excluded unless they affect tax or procurement.
• Target year is 2027-28, with later years shown separately.

Affected population

• Unit is employers and workers with Equality Act claims.
• No official affected-worker count is used.
• Public-employer compliance is directly fiscal.
• Private compliance costs are mostly off-budget.

Gross impact

• Official equality action-plan cost is about £0.001bn EANDCB.
• Central adds £0.35bn regulator and enforcement capacity.
• Public-employer compliance adds £0.25bn.
• Tribunal and legal-aid pressure adds £0.25bn.

Fiscal build-up, central case

• EHRC and enforcement capacity: +£0.35bn
• Public-employer compliance: +£0.25bn
• Tribunal and legal support: +£0.25bn
• Penalty receipts: -£0.05bn
• Participation tax gains: +£0.00bn

Central net impact: +£0.8bn in 2027-28.

Behaviour and pass-through

• Low case assumes targeted regulator action.
• Central assumes stronger enforcement and reporting.
• High case assumes broad duties and more tribunal claims.
• Some employers reduce risky hiring.
• Participation gains are not monetised.

Phasing

• 2026-27: +£0.3bn. Capacity build.
• 2027-28: +£0.8bn. Stronger enforcement.
• 2028-29: +£0.9bn. Claims and audits rise.
• 2029-30: +£0.9bn. Steady state.

Main source groups

• Equality and Human Rights Commission, "Strategic plan 2025 to 2028" (2025): EHRC strategy sets enforcement priorities for equality and human-rights law; relevant to stronger Equality Act enforcement.
• Department for Business and Trade, "Employment Rights Act 2025 - Economic Analysis" (2026): The ERA economic analysis estimates around £1bn annual direct business cost before social-care bargaining; provides official baseline costs and affected groups.
• Department for Business and Trade, "Employment Rights Act 2025 impact assessments" (2026): The IA collection separates guaranteed hours, unfair dismissal, fire and rehire, union and equality measures; prevents treating broad rights packages as one undifferentiated pledge.
• Ministry of Justice, "Tribunal Statistics Quarterly: October to December 2025" (2026): Employment Tribunals received 13,000 single claims and had 58,000 open single cases in Q3 2025; shows enforcement capacity is already a binding risk.
• Autor, Kerr and Kugler, "Does Employment Protection Reduce Productivity?" (Economic Journal, 2007): 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.
• OECD, "OECD Employment Outlook 2024" (2024): Used to support the baseline, affected-population sizing or behavioural assumptions in the illustrative scenario.
• DiNardo, Fortin and Lemieux, "Labor Market Institutions and the Distribution of Wages, 1973-1992" (Econometrica, 1996): Labour-market institutions can compress wage inequality through wage floors and bargaining power; useful for distributional channels, not for claiming free fiscal gains.
• Green Party of England and Wales, "Workers' Charter 2026" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.