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Race in the Workplace: The McGregor-Smith Review

Volume 782: debated on Monday 24 April 2017

Question for Short Debate

Asked by

What action they are taking in response to the recommendations made in the report Race in the Workplace: The McGregor-Smith Review, published in February.

My Lords, I am delighted today that we have time for this debate. Britain has been an extraordinary place to live and grow up in since I arrived aged two as part of a Muslim Asian family, but that is not to say that I did not face my fair share of challenges to achieve what I have in business because of the colour of my skin and my gender. Sadly, I am still considered the exception to the rule, rather than the norm. I find it appalling that, even today, some of these prejudices still exist, holding people from BME backgrounds back from reaching their full potential in the workplace, as my review clearly shows.

While there is a clear moral case for greater diversity, it is also vital for the continuing strength of the UK economy to have the best available talent in the workplace, whatever their background might be. My review puts forward that economic case for change. The boost to the UK economy is £24 billion a year if workers from BME backgrounds participate and progress at the same rate as their white counterparts.

The review finds that workers from a BME background are still being held back by the colour of their skin and are more likely to end up in lower-paid and lower-skilled jobs than white workers. One in eight of the working population today are from a BME background, yet only 10% of the workforce is BME, they hold only 6% of management positions, and rarely can they be seen at the top of any public or private organisation. Not only is this wholly unacceptable, but the public and the private sector are definitely shooting themselves in the foot by failing to help people from BME backgrounds to progress.

The review clearly demonstrates there is a huge economic benefit to both employers and the whole economy for BME workers to reach their full potential. Many employers are doing their best to harness BME talent, and I applaud those who take it so seriously, but many others are not, because they do not know what to do. That is why I have published a list of 26 recommendations, urging larger employers to lead the way in tackling barriers to BME progression.

First, I call on companies with more than 50 employees to publish breakdowns of their workforces by race and pay band, to draw up aspirational diversity targets and to appoint a board-level member to be held accountable for delivering on these. When I wrote to the FTSE 100 asking for race and pay band information, only 74 responded and only half of those had any meaningful data. That is, in itself, a real issue: if everyone does not publish data, the Government should legislate to ensure that they do. We should not hold out a lot of hope for this happening voluntarily. Companies have many priorities in these somewhat difficult times, and we will not get meaningful change unless this is done by all organisations whose employee numbers exceed 50. I urge that we legislate in this area very quickly.

Secondly, I want all organisations to use their purchasing power to ensure that they use suppliers that take this seriously. The public sector has huge spending power and this can be used far more effectively. We do not need another review to do this; we just need to change how organisations pre-qualify for work with the public sector. When taxpayers’ money is used, it should be done in a way that benefits all citizens in the UK. As the Government decide how best to disentangle themselves from a myriad of European rules on procurement, they must develop simpler processes that drive positive change in this area.

Thirdly, I want senior executives to take accountability for all of this and be the key sponsors for improving diversity in their organisations.

Fourthly, all employers must raise awareness of diversity issues by ensuring unconscious bias training is undertaken by their employees. They also need to have inclusive networks and provide mentoring and sponsorship.

Fifthly, all recruitment practices need to be examined. Non-diverse shortlists need to be rejected; diversity needs to be introduced to interview panels. How many BME individuals do we see on interview panels today? Work experience and internships need to be offered to everyone, not just the chosen few.

I also discussed a number of other key recommendations, including developing a simple guide on how to discuss race in the workplace—it is still so difficult for many of us to discuss it and I do not even feel comfortable talking about it today—and an annual list of the best 100 BME employers to celebrate success and promote best practice in the business community.

The Government, who asked me to carry out this review, are clearly taking this issue seriously, and I am encouraged that Margot James has created a new Business Diversity and Inclusion Group to bring together business leaders and organisations to co-ordinate action to tackle exclusion in the workplace. Many businesses also take this seriously and I was impressed by many of the case studies and examples of best practice that I saw.

I would now like everyone to adopt and embrace the recommendations and get on with implementing them. I am not keen for any more reports to be written: we just need to get on and change the outcomes for so many people who have great talent. They deserve to be not ignored in the workplace but supported. Let us help them achieve their aspirations and provide a significant boost to the UK economy.

My Lords, I give heartfelt congratulations to my noble friend on the diligence, pragmatism and determination of her report. The evidence is excellently produced; I strongly endorse her conclusions—with minor modifications—and I am delighted that she has not overcomplicated it. As one would expect from an extraordinarily successful businesswoman, she has produced a coherent report that people can follow and take up its relevant practical points.

I have an inkling that race has never been an issue for my noble friend. She is a businesswoman, regardless of her ethnicity. It is interesting that many leaders who have achieved change have begun by avoiding, while not exactly denying, their own characteristics. It was often asked about the first woman Prime Minister, Margaret Thatcher: “What did she do for women?”. The noble Lord, Lord Blunkett, who is blind, fulfilled an extraordinarily senior Cabinet position. I have never known my noble friend talk previously about ethnicity. I feel the same in my own career; originally, I would wear only a black, blue or grey suit, as one of 22 women in the House of Commons. However, there comes a moment when those of us who have broken through a barrier feel duty bound to stand up and help, support and give a pragmatic way forward, not just an aggressive rant.

With the current environment of Brexit, we need all the man and womanpower we can muster. There remains much too much evidence of underachievement from black and ethnic minorities throughout school, into apprenticeships and sometimes at university. Therefore, if we are to be competitive and fill jobs when migration is more difficult, we have an obligation as a country more than ever before to ensure that every individual is trained and developed to the maximum of their ability. It is still not right that there are so many more exclusions from black and ethnic minorities than there are from white children and that 6% of black school leavers attend a Russell group university, compared with 11% of white school leavers and 12% of mixed or Asian school leavers. As my noble friend said, race and ethnicity are sensitive subjects and much more complex than discussing women’s issues. Different racial groups have different experiences, cultures and backgrounds and are often treated in different ways or survive better in different ways throughout our welfare and national life.

I endorse the response of my honourable friend Margot James, the Minister in another place, where she talks about this being a business-led review. Many of these policies are for business to implement—business acting in its own enlightened self-interest. My noble friend has drawn on help from Business in the Community, where Sandra Kerr has been a great force over many years in this area; from the CBI; and from Professor Susan Vinnicombe, who did so much over 20 years to draw attention to the lack of women on boards; again, not by aggressive campaigning but by relentlessly putting the evidence in the face of boards, naming and shaming, and celebrating best practice. I am delighted that my noble friend has taken this approach in her report.

I am equally pleased that in their response the Government have taken up their responsibility to act not as a legislator over business but to demonstrate best practice as an employer. I support the areas where the Government have said that they are reluctant to enforce legislation now but, my goodness, I am pleased about what is happening in the National Health Service. If the National Health Service is the biggest employer in the country, how right it is that it should demonstrate best practice. When we spoke in this House about my noble friend’s report before she commenced it, I spoke about the work that I had done with the NHS in 1993, working with the noble Lord, Lord Ouseley, talking with groups of people from black and ethnic minorities about their experience. I said then:

“I want to stress that taking action to promote equality in employment is not just a matter of moral justice or of fairness to people from minority ethnic groups. It is good, sound common sense, and it makes business sense too”.

It costs £230,000 to train a doctor. We want to be sure that every doctor’s training is well developed and they have the chance to get to the top. But why has it taken so long for those fine words, expressed in a heartfelt, sincere fashion, to translate into action?

That is why my noble friend is so right: this is not about words but action. I believe that those lessons are being learned. I am delighted that the chief executive of the NHS, Simon Stevens, himself chairs the NHS Equality and Diversity Council. A contractual requirement to drive race equality in the employment of NHS staff is written into the standard contract. Workforce data have to be published, as does information on the proportion of trust board members from BME backgrounds, the relative likelihood of BME staff being appointed once shortlisted, and on the importance of non-mandatory training and monitoring contracts. I say that because this is the Government acting as employer rather than imposing excessive rules and regulations on business. I very much hope that that will deliver a result.

Similarly, in the higher education field, if we are thinking about the pipeline and development, particularly of black and ethnic minority people such that they can fulfil their potential, all the way through we want to see people from black and ethnic minorities getting the best possible and fair opportunities. We know that in higher education there are all too few vice-chancellors from black and ethnic minorities—there are too few women but there are even fewer people from black and ethnic minorities. The noble Baroness, Lady Amos, as the vice-chancellor of SOAS, was the first black vice-chancellor, and I hope that there will be many more. However, we cannot ignore the lessons. The Equality Challenge Unit investigated the subject and came out with its recommendations last year. The House will be familiar with the themes: set up mentoring systems, formal and informal; ensure that there is representation and diversity on interview panels; set up BME networks within individual HEIs; and ensure there is access to relevant training. We hear these themes time and again, and have done for so long that people cannot now imply that they have not heard them.

There will be change only when this is owned at the highest level. Therefore, the connection with Sir John Parker’s report about ethnic diversity on boards last year is another part of the jigsaw puzzle, as my noble friend so rightly says. He points out that of the 14% BME population in this country,

“only about 1.5% of all FTSE 100 Board directors”,

are from black or minority ethnic groups. Again, we can look at the issues behind the process of recruitment—I declare an interest as somebody who has been involved in recruitment for many years. When we recruit, we tend to look in the mirror and not through the window. Inevitably, people recruit people who they know, like and trust. Many years ago, I kept appointing people to run NHS trusts who used to work for ICI. They were very good people; I did not even know that they had worked for ICI, but I kept doing it. Somebody said, “You know they are all from ICI, Secretary of State”, and I said, “My father worked for ICI in the early part of his career”. We appoint people from our university, from McKinsey, from BP—wherever your stable was, it is inevitable. Therefore, we have to go the extra mile to ensure that we have proper training to remove unconscious bias and ensure that people can genuinely fulfil their potential.

This is a generous-spirited country. We are going through the change of Brexit, and we have had real concern of late over hate crime; this is the moment to go the extra mile. My noble friend has helped to direct us in the right way forward.

My Lords, I am delighted to be able to add my own support for and congratulations to those who have brought these issues before us today and that we have been able to squeeze this bit of business in before we all go our separate ways shortly. I therefore thank the noble Baroness for bringing the report here. Business-driven it may be, but I hope that my more humble contribution from my entire professional life, which has been lived in neighbourhoods, on streets and visiting people in their homes, and the rest of it, will add some light and give a wider context to the points being made.

Certainly, in the 40 years that I have been trying to be active in the field of better relations in communities, there has undoubtedly been progress, some of which has been enshrined in or has been stimulated by legislation brought through this Parliament. Things are not as they were. For all that, it is too early for us to congratulate ourselves. We have terrific panache in this country for being rather more subtle in the racism we deploy. I remember that at the beginning of my own career in the Church, we set up what were called racism awareness courses. All potential ministers were obliged to attend them. I was rather reluctant to do so as I thought myself a jolly good chap—the sort of person everybody would like to know. Through a systematic, well-organised and structured course, I was able to recognise just how subtly racism was embedded culturally in jolly good chaps like me—and it did not do me any harm to be made aware of that. At the end of the day, you can, from above, impose through targets, quotas or whatever as much of a desirable picture as you wish—but, until hearts and minds are changed and until people feel involved in a process, you have not really got to the nub of the problem.

Therefore, I was particularly interested in the sections of the report that dealt with culture and language. In the 40 years that I have been actively committed to these matters, I have never felt that there was a more urgent time for us to revisit them than now, when the question of immigration has been raised. Let it be said that it is a proper question, and that we must look at it as a society. It raises questions and, whatever side of the political divide we are on, we have to give it our very closest attention. However, the fact that it is one of the leading subjects of the day in our political discourse has unleashed some of the very racial attitudes that I have been describing. Linked to the question of immigration and the way we conduct the debate is an awful lot of terrifically dangerous and, I believe, unfortunate material. So it is time that we looked at this again: we must never be complacent in this area of our national life.

I happen to be the minister of a church that has people drawn from 55 national backgrounds. Over 20 languages other than English are spoken by the members of our congregation. Historically, Methodism is a white church, and here am I, a white man, as its minister. However, in our liturgical and other activities, in our social outreach and in our attempt to be useful in the community that we serve, we have to recognise that we must be very careful to develop, systematically, a team of leaders who reflect back to those in the congregation their own diversity. Having people in key positions from the range of ethnic backgrounds that constitutes our church is an important part of that. There is no point in me, as a white man, standing up there, cracking a whip and making things happen—even if it is for a cause which I passionately believe in and which can be shown to be just. We have to find colleagueship with people and establish a team that can take forward these matters and ideals.

In the work that I do locally in the field of education, we have all kinds of experiences, and I will share just one or two of them in the time left to me. In a moment I shall adduce the cases that I want to use for illustrative purposes, but I will preface those examples by saying what astonishingly brilliant young people there are from black and other ethnic minorities. They are people I have had the privilege of working with, and I have seen them develop, blossom and flourish. They are to be found, but I just wish that there was more of a flood of them.

Against that background, I want to talk about one or two things. For example, we have been able to establish a scholarship that gets seven children into a leading public school. A philanthropist has made the money available for that. He did not want people from the inner city to go in ones and twos, to be picked off in a rather self-satisfied environment. Therefore, seven go at any one time and some of them have done extraordinarily well. However, I have to say that on balance I am disappointed that they do not seem to end up in Russell group universities. I could discuss over a cup of coffee all sorts of reasons why that might be the case, but aspiration and the culture from which they come are as much a part of what eventuates as the experience of the education that we find it possible to offer them.

I have some responsibility for a secondary school for girls in east London, where 85% are from a Muslim background, mainly Bangladeshi, and wear the hijab to school. Only one girl from the whole of the sixth form ended up in a university that was not in London. Of course, they want to be at home in London and they will do brilliantly in those universities—nobody has anything against that—but somehow the limitation does not seem right: the community we are talking about is itself setting these targets and narrowing its vision, resulting in only one girl from the sixth form applying to a university outside London.

I will take as another example a young man with good A-levels who decided not to go to university. I took him out for a drink and asked him to tell me why. He said, “You will tell me that I could become a journalist or a lawyer or a teacher, that I could build my career and go places and be anybody I wish. I know that discourse—I have heard it. But where I come from there are quicker ways to make money”. He is a rather interesting young man who lives on the streets and he was absolutely serious; he was talking about drugs, crime, football, fame and music. I was totally astonished. I promise your Lordships that although that may be an aberrant example, and perhaps you might think I could have chosen a better one, it is nearer the bone than you would dare think.

Aspiration and culture among those who are waiting to be born in the way that is described in the report and in the remarks of the noble Baroness are part of what we must concentrate on and somehow get stuck into. We must give people the self-confidence to see themselves moving forward in the ways that I have described. I recognise that all that I have said is drawn anecdotally out of my experience, but it is experience that stretches back over 40 years and that has been lived out in our communities. I hope, therefore, that it will prove acceptable, for what it is worth.

My Lords, to minimise the danger of repetition, the scourge of all debate, my contribution is based principally on my personal experience of more than 70 years as a UK-based born and bred citizen, more than 50 years of learning about, building and directing the affairs of UK retail businesses, and more than 25 years’ involvement with charities that are dedicated to improving the prospects of young people, particularly those from disadvantaged backgrounds.

I start by focusing on the absolute no-brainer business case for employing people from the widest possible pool of talent, a concept I think it is impossible to dispute with any credibility. The extensive retail experience I alluded to encompassed founding and running stores, regional chains and national retail organisations, and successful FTSE companies employing from fewer than 20 to more than 20,000 people. It is generally acknowledged that the best armies have the best soldiers and the best football teams the best players, and that yes, the best businesses employ the best people. So why would any company aspiring to long-term success and prosperity not recruit the very best staff and management it could afford, regardless of their race, religion, gender, age, sexual orientation, size, shape or anything else? There is no valid reason. Why would I or any retailer do any other, when the customers who cross the threshold of our stores are a cross-section of British society today—multiethnic, multicultural and multilingual, and with an equal variety in the depths of their pockets and in their tastes? It is basic kindergarten common sense to ensure that our businesses employ the very best management and staff, enabling us magnificently to fulfil our corporate aims. Clearly, having the widest choice of talent by recruiting from the biggest possible pool is an obvious and easy way of achieving this.

The business case and the moral case march hand in hand to say that no one should be overlooked for a job or for promotion because of where they were born or how they look and speak. But we can and should do more to help those from black and minority ethnic communities to present themselves as the best candidates for any job. That is not just a matter of qualifications but of attitude and, in particular, self-belief. My close involvement with charities that work tirelessly to help disadvantaged young people make the most of their life chances—the Duke of Edinburgh’s Award and Outward Bound—have demonstrated to me how much can be achieved by helping the young to gain confidence, resilience and leadership skills. Many youngsters who benefit from these experiences are in fact from minority ethnic communities in our inner cities, and businesses that we work closely with can point to direct and tangible benefits from integrating the Duke of Edinburgh’s Award, for example, into their apprenticeship programmes.

Ultimately, the best way that we can reach the goal of everyone getting the best job that they can, limited only by their own talents and aspirations, is to ensure that they are the best they can be. We can do that through education and training in schools and voluntary organisations such as the Duke of Edinburgh’s Award and by changing attitudes permanently and raising ambitions so that no one thinks that any position is above or beyond them.

Positively influencing the developing attitudes of the young is undoubtedly the key to creating better workers without bias who will have the drive and determination to perhaps become tomorrow’s leaders. They will also be better parents and citizens. But making job applicants better can be only part of the story. As the noble Baroness said in her excellent report, we also need to change attitudes within business. We are all sadly familiar with the sentence that begins, “I’m no racist but”, and the speaker genuinely always believes what they say. But their bias, even if unconscious, is still there. Such attitudes have grown up over generations and it is not realistic to imagine that they can be changed overnight. In changing attitudes rather than simply actions, evolution trumps revolution every time. That has certainly been my experience, which is why the best way to achieve the fine objectives of equal opportunity and equal rewards is one that puts more emphasis on persuasion than on regulation.

I have been a marketeer all my life and I have been mightily impressed by the powerful and effective attitude-changing, long-term heavyweight marketing campaigns mounted by Governments in recent decades. I am going back a bit now, but if we take road safety as an example it was not just changing the law that made people wear seat belts but advertising on TV every night that helped persuade us of the benefits. Now “clunk, click every trip” is a given. Assisted by graphic and emotive advertising, Governments have achieved a huge impact in recent years in making smoking cigarettes socially unacceptable. Drink-driving, long illegal, is similarly becoming beyond the social pale as the closure of thousands of pubs bears witness. That is an outcome massively influenced by the Government’s hard-hitting multimedia marketing.

Those changes in attitudes may have taken time, but that will always be the case where bad habits and prejudice have deep and ancient roots. While we cannot dig out unconscious bias overnight, it is well proven that it can be done over time. I know from my own experience that not only can we enhance the performance of businesses in the UK, we can create a happy and more cohesive society by maximising diversity in both recruitment and promotion. The business and the moral cases could not be better linked or clearer and I urge the Government to push this message hard and relentlessly out there with all the conviction and marketing expertise that I know they have at their disposal. The sooner we start the better. As my noble friend Lady Bottomley said earlier, it is all about action not words.

My Lords, it is a great pleasure to speak in this debate and I congratulate my noble friend Lady McGregor-Smith on what I think is an important and thorough review. Although much has improved over the past decade, reports like this shine a clear light on the fact that more needs to be done and it serves as a timely reminder to those in power that the foot cannot be taken off the pedal. I welcome many of the recommendations. I should also point noble Lords to my interests as set out in the register and say that my employer, BT, has invested heavily in this area and strives always to do better.

It is absolutely right that a simple guide should be developed on how best to discuss race in the workplace as well as ensuring easy access to an online portal and celebrating success through a list of the top 100 BME employers. The recommendation for further government collaboration with black and minority ethnic groups, relevant employer representatives and organisations such as Business in the Community is an important one, and I am pleased that the Government will be looking to work with businesses to ensure that they do all they can to fully embed changes within their organisations.

Equally, increased transparency and annual recording of diversity statistics for businesses with more than 50 employees are potentially good ways for companies to monitor what is really going on within their operations and to ensure that they are consciously acting properly in this regard, and just as importantly, making sure that they not operating on the “unconsciously biased” level, which has been referred to in connection with ICI recruitment. The review points out that that can be very common.

For businesses’ own knowledge, it is vital that they know exactly where they are on the spectrum of workforce diversity and where improvements need to be made. If you are serious about success, you have to track progress, and to track progress, you must have the figures.

Of course, social mobility and the inclusion of all in the workplace is first and foremost a moral issue, but the economic figures cannot be ignored. The review identifies the opportunity for an additional £24 billion into our economy each year just by realising the potential of BME workers alone. I hope that noble Lords will forgive me if I use this opportunity to pivot into another section of society that is woefully underrepresented in our workforce. We must ensure that we close the disability work gap and this is an essential piece of work if we are ever to ensure a fair and equal society for all. We must do all we can to make sure that disabled people can lead full and rich lives in the same way as non-disabled people would expect to, and what struck me while reading my noble friend Lady McGregor-Smith’s important work is that many of the recommendations could also be applied to help improve the situation for this group of people.

The UK has one of the highest disability employment gaps in Europe. Disabled people in the UK are twice as likely to be unemployed as non-disabled people, and even more worryingly, once they are in work, disabled people are significantly more likely to experience unfair treatment than the non-disabled. I suppose that the statistic I find most shocking in this regard is that only 6% of people with a learning disability are in work, yet 65% would like to be. Here perhaps I may briefly read from a Mencap report: “Employers who overlook employees with learning disabilities miss out on valuable contributions to their businesses”. According to Mencap, “employing people with learning disabilities can improve perceptions of organisations. Employees with learning disabilities are committed to their jobs, which reduces recruitment costs and people with learning disabilities take fewer sick days than other colleagues”. So this need not be an act of sympathy and it is not about ethics, it is about real productivity and economics.

Can the Minister tell the House how closely his department has been working on a direct basis with disabled and BME people, and how integrated are its views on the problems it faces, as well as its ideas for solutions? As my noble friend points out in her review, possibly the most important piece in this policy puzzle is input from the very people it affects.

The term “work” is so much more than simply employment for any of us. It builds identity, confidence and supports independence. It is clear for both moral and economic reasons that the rate of employment among BME and disabled people, and indeed anyone who faces institutional barriers into work, needs to be put at the heart of all future employment growth strategies.

My Lords, I apologise to the Chamber and to my noble friend Lady McGregor-Smith for entering the Chamber just after she had started speaking. I thank her for bringing this important debate here and congratulate her on her excellent and well-researched review. My noble friend has been a champion of diversity for many years and deserves admiration for her dedication to ensuring that talent should flourish by bringing down barriers, rather than by imposing arbitrary quotas. This review looks at the real issues and the recommendations are practical and designed to overcome them. It looks at, among other things, improving transparency and unconscious bias. It considers the leadership and the prevailing culture of organisations. Most important is the title, as my noble friend made clear: The Time for Talking is Over. Now is the Time to Act—no more reports.

Understanding why black and minority-ethnic staff are not meeting their full potential and not rising to the top tiers of management is not a new issue. Organisations often demonstrate a desire to confront the challenges that exist to harnessing the talents of BME staff. As the Government’s response makes clear, the opportunity to generate a further £24 billion for the economy is compelling enough. The moral case is unquestionable. My right honourable friend the Prime Minister showed the Government’s commitment to the issue by launching the race disparity audit last August. However, while policy intentions are often clear, their implementation is often inconsistent, unco-ordinated and lacking in real drive and commitment. Many BME staff do not feel that they are operating on a level playing field. That is why there is a critical need for action.

This debate asks Her Majesty’s Government for their actions in response to the recommendations made in the report. As the Government’s response made clear, while the majority of the recommendations are for businesses, the Civil Service should lead from the front in taking positive action to make the Civil Service and, where possible, the wider public sector more inclusive. There is, of course, a lot of overlap in the barriers to be overcome. Change takes time, but the previous narrow focus on targets and quotas has failed to change the culture and has sometimes harmed the cause.

I was very involved with the Civil Service’s diversity plan when it was launched in March 2015 as the Talent Action Plan. Everybody loved to talk about diversity, yet the first draft of the diversity report submitted to my noble friend Lord Maude, then Minister for the Cabinet Office, was full of a lot of bland platitudes and arbitrary targets. More worryingly, it suggested a discriminatory approach that potentially conflicted with the core principle of recruitment into the Civil Service—that it should be on merit.

Our successful experience of increasing the number of women appointed to public boards had demonstrated that such quotas in isolation had failed to work. They failed to address the key barriers and obstacles that women faced. A key point in this instance was the insistence on track record and proven experience, which meant that the same candidates were constantly recycled from one board to another and did not allow new participants to enter. By replacing such a requirement with an emphasis on ability, we managed to expand the field of female candidates. We made other changes, such as the requirement that job advertisements should be written in intelligible English and make clear what exactly is required. It is not rocket science, but it made an enormous difference. I noted with interest that my noble friend Lady McGregor-Smith made a similar recommendation in her report.

The results of our work on public appointments spoke for themselves. By 2016 the percentage of women being newly appointed to boards of public bodies rose from 34% in 2010 to more than 48%. Even the then Commissioner for Public Appointments Sir David Normington, who did not always rejoice in our reforms, paid tribute in his annual report. We therefore thought it would be sensible to apply a similar practical approach when tackling gender diversity in the Civil Service. In the interests of political impartiality, we commissioned the Hay Group to carry out a proper analysis of women in Whitehall. Its remit was to be brutally honest, to identify real problems and barriers, and to make practical recommendations. The final report was something of an eye-opener. It found that the policies were sound and progressive but that the culture and leadership climate prevented women progressing successfully into senior roles despite the fact that women entering the senior Civil Service possessed exactly the same required leadership qualities as men. Line-manager practice was variable, which meant that women’s experiences of leadership and talent were something of a lottery. Most critically, many women simply did not believe that the rhetoric on policy and promotions matched the reality on skills and behaviours.

I will not go into all the detailed findings but will highlight some of the more revealing. One woman described how she applied for a promotion but failed to get an interview. She was told that it was “because I would have performed better than the preferred candidate and it was his turn for promotion”. The leaders of the Civil Service were described as simply “not leading” and the culture was described as a “bear pit”. The Civil Service leadership was shocked and taken aback by the research, but it emboldened us to commission further work on LGBT, BME and those with disabilities. BME staff in particular, and in my opinion quite fairly, thought that the emphasis on diversity was always weighted very heavily towards gender.

Ethnic Dimension wrote the report on removing barriers to talented BAME staff progression in the Civil Service. The conclusions were strikingly similar to those of the Women in Whitehall report and again identified cultural and leadership climates as the main barriers to the progression of talented BAME staff within the Civil Service. Staff complained of a leadership that was not diverse, and of the persistence of unconscious bias and discrimination which blocked the progress of talented BAME staff and meant that there was not always equal access to promotions, projects, senior leaders and secondments. BAME staff were more likely to be marked down in performance appraisals, with little objective feedback as to why.

We published all the reports and used them to inform the senior Talent Action Plan, which was published in March 2015. The top senior leadership in the Civil Service worried that the reports were too critical, but the rank and file loved them. A number of staff felt that it was the first time that the conflict between rhetoric and reality had been properly addressed with practical actions and that they were being listened to. The Permanent Secretaries enthusiastically took ownership of the plan.

I return to my point on implementation. The Talent Action Plan was seen as a two- year plan. After year 1, in March 2016, the Cabinet Office published a progress report that set out which steps had been completed and which were still “in progress”. It was pleasing to note that the Civil Service had increased its unconscious bias training and appointed five Permanent Secretaries as diversity and inclusion champions. All Permanent Secretaries now have performance management objectives to improve diversity within their departments. However, the BAME report identified the crucial role of line managers in supporting and developing talented staff. It is always easy to write objectives but far harder to put them into practice. I await the two-year progress report on implementation of the Talent Action Plan, which I presume was due in March. I appreciate that it is a Cabinet Office-led exercise, but I wonder whether my noble friend can find out when we can expect to see it.

Ensuring the commitment to diversity and to BAME staff is hard work and we need to get it right. I commend my noble friend’s review and her recommendation of a one-year-on review so that the Government can assess the extent to which the recommendations have been implemented. I hope that both public and private sector can share their experiences to improve inclusivity in the workplace, so that the workforce will be able to deliver the incredible benefits to the UK economy.

My Lords, I, too, thank the noble Baroness, Lady McGregor-Smith. It is a great report and a great piece of research. What is better, it is practical and implementable.

I want to tell the House the story of one recent experience and to ask a question of the Minister. Until recently, I was trustee of a charity called Creative Access. It was set up in the wake of the London riots by Michael Foster, who had worked all his life in the creative industries and was a very successful businessman. He was struck for the first time by how few black and Asian people were working in the industry. He established the charity to get more young people in and he went about finding them. For black and young people, it is not just that the door into the creative industries is closed to them; they do not know where the door is. Outside administrative roles, at senior levels the creative industries are populated by more than 90% white, middle-class graduates, mainly men but also some women.

He used his funds to give paid internships. He found companies across the creative industries—we must thank them—to take on these young people. Over time, he got them to fund 50% and the Government funded 50%. The reason for that is that while they started taking these young people out of social conscience, as time went on they found the amazing difference the young people made to their bottom lines. This is an economic issue. We know socially that, if you are black or Asian and young, you are two or three times more likely to be unemployed than your white counterpart. Of course that is a social issue. Yet if you get through the door with the right support and training you can add so much.

Five years on, we had put 720 young people through internships, and 84% of them at the end of that year got a full-time paid job. We were by far the most successful organisation, whether for-profit or not-for-profit, that this country has ever seen in getting disadvantaged kids full-time jobs. We were told that we were loved by the Government and that we would get re-funded. Then something happened called Brexit. The paper was in the box for us to be signed and then things changed. There was a new agenda—a new Prime Minister—and we were told we were no longer to be part of it so we had to shut down. We are now trying to re-establish ourselves as a social enterprise but I tell this story to the House because this report, too, was previously commissioned. So my question to the Minister is: in reality, how many of these recommendations and how much of this report will be implemented?

My Lords, I too rise to speak in the gap. I apologise for that, but I had not seen this debate on the Order Paper, and hope noble Lords will forgive me. I declare my interests in the register as chair of Drive. I also pay tribute to the noble Baroness, Lady McGregor-Smith, for her excellent report and her superb speech today.

Incidents of racism and continuing prejudice in our society and places of work are indeed appalling. As has been said, the title of the report is absolutely right: The Time for Talking is Over. Now is the Time to Act. In the 21st century, we have a duty to ensure that companies in the private sector, public sector and voluntary sector reflect the communities in which they work. However, the response from the Government to the excellent recommendations in the report is not as proactive as it should be. For example, I strongly support the call for legislation on the publishing of workforce data on race and payroll, as that would really shine a light on to what is happening in our society.

I will focus my brief comments today on recommendation 16, on the supply chain. When, according to the Hackett Group in 2015,

“On average supplier diversity programs add $3.6 million to the bottom line for every $1 million in procurement operation costs”,

it is difficult to understand why there has not been more action on this issue to date. Leading organisations have not only an opportunity but, I believe, a responsibility to develop the entrepreneurial capacity and self-reliance of all the diverse communities in which they operate and draw their talent from, and to the communities to which they sell. The report rightly says that the public sector must use its purchasing power to drive change and that the Government should ensure they drive behavioural change in the private sector. It makes practical recommendations to bring this about.

The government response is all about the public sector equality duty, which is part of Labour’s legacy and, yes, that is a useful tool, but it is not enough to bring about the real change that is necessary for diversity and for the economy. Basic equality standards and diversity are two different things. The Government should have endorsed each of the points within the supply chain recommendations. There is a wealth of innovative best practice out there, and I would draw the Government’s attention to some of the extraordinary initiatives taken by HS2 with its inclusive procurement programme, which embeds the use of electronic data interchange throughout the company and the supply chain. It includes board members having a diversity-related pay element. Collaborating and supporting the supply chain is making a huge difference to that company and could make a difference to so many more.

Finally, on a more general point, government, along with the public, private and voluntary sectors, could and should do a lot more work in schools—especially primary schools—to broaden the horizons of all pupils, from whatever social or ethnic background, so that they can all see the opportunities out there that they could and should pursue. They can see role models such as the noble Baroness, Lady McGregor-Smith, and my noble friends on these Benches. They need to see so many more role models so that they have the inspiration to develop their own aspirations, so let us go out there and act on this excellent report from the noble Baroness.

My Lords, my noble friend’s report states that it is now time to act and after spending more than a decade working with many of Britain’s wonderful black and minority ethnic communities, action and even legislation is now needed. It is young people’s lives that are being affected here.

As outlined, the first priority has to be data collection, as effective policy or law needs correct data. That priority is in line with Her Majesty’s Government’s current policy on data collection in this area—hence the Government’s race audit of public sector recruitment. Requiring businesses to publish merely puts them in the same position as most public sector employers, who either publish or know that they will be subject to a freedom of information request. Publishing the data will enable effective media and parliamentary scrutiny of companies as well as creating healthy competition between firms to have the best reputation in this area, which is often an effective driver of change.

The lack of meaningful data, as outlined, in many companies that disclosed data—when they could provide them—indicates to me that these companies rarely think that they will be called to account for the treatment of recruits and employees on the grounds of racial discrimination. Speaking as a former personal injury lawyer, companies knew that prosecutions and civil claims by employees could be defended properly only if they had good systems, such as risk assessments, and kept good data and paperwork. The powerful role of the employment tribunal in assessing claims for unfair dismissal has driven effective change within organisations. Can my noble friend the Minister please outline whether the Government will investigate whether the employment tribunal is being accessed by people who are subject to illegal behaviour of this nature and if not, why not? Further legislation may be needed to bring change in this area, but Her Majesty’s Government should look first into whether current legislation is effective.

I would also be grateful if my noble friend the Minister could explain the logic of why companies should be subject to health and safety regulation, employment legislation, hygiene legislation and various powers of licensing—with the local authority having various powers even to enter the premises—but why, on this matter, legislation is not appropriate. I would be grateful for an explanation.

My Lords, I add my congratulations to the noble Baroness, Lady McGregor-Smith, on her excellent report. It is full of wisdom and practical recommendations to change the culture and practice of encouraging diversity and inclusion in British business. It is a shame that the Government have refused to accept the necessity of a strong steer in implementing the recommendations. As the report says:

“Daylight is the best disinfectant”.

It recommends that companies with 50 or more employees should report annually on the ethnicity of their workplace by salary band and produce aspirational targets every five years. I was quite shocked by the figures on ethnic representation in the workforce—the loss of energy and talent, which, if properly harnessed, could increase Britain’s GDP by £32 billion a year.

You would think that there should be no need to legislate and that businesses would see the wisdom of encouraging diversity within their workforce. That certainly seems to be the Government’s point of view. However, just as with women on boards, and just as with the wage gap between men and women, it sometimes takes more than common sense for companies to act in their own best interests. It took a threat such as that made by Business Secretary Vince Cable in the previous Government about the underrepresentation of women on boards, and it took legislation to tackle the inequality of women’s pay, but the strongest language used in the Government’s response to this excellent report is “encourage”. “Encourage” means nothing, especially if you do not even realise you are discouraging and excluding some of your employees from being promoted or even not selecting them in the first place.

We are all guilty of unconscious bias. We all unconsciously favour people like us—people with the same background, the same skin colour, the same sex and even the same sense of humour. The noble Lord, Lord Griffiths, gave us an eloquent explanation of his exposure to unconscious bias training and of what happens when unconscious bias is not challenged. The noble Baroness, Lady Bottomley, rightly commended the work the Government, as an employer, are doing on racial diversity, but there is nothing to impose what she termed “excessive rules and regulations on business”. I do not think that any of the rules and regulations here are excessive. The noble Lord, Lord Kirkham, wants us to achieve culture change through marketing messages and to use schemes such as the Duke of Edinburgh’s Award to help life chances, but does not want legislation. He cited the example of “Clunk Click Every Trip” on seatbelts, but it is illegal not to wear your seatbelt. I am confused about which he feels should come first: legislation or attitude change—the chicken or the egg. Why not legislate? We will achieve change even faster. The noble Baroness, Lady Bertin, rightly pointed out the contribution that disabled people can make and the shocking loss of the talent they could bring. The noble Baroness, Lady Finn, spoke about the conflict between rhetoric and reality—between warm words and what actually happens in the Civil Service. I commend the work that is being done in the Civil Service. The noble Baroness, Lady McDonagh, talked about a scheme that started out of social conscience but made a fantastic contribution because of the diversity and talent it brought.

I agree with all the recommendations of the noble Baroness’s report but I want particularly to mention those on procurement. I agree entirely with what the noble Baroness, Lady Royall, said. To me, it should be a moral as well as a business imperative for government to procure from people who look like the people we serve, whose money we are spending, but I saw in the Government’s response to my own report on diversity and inclusiveness for women-owned businesses, the Burt report, that there was a reluctance on the part of government to use its most persuasive tool—procurement—to encourage women-owned businesses to pitch for government business and grow, which is just the effect that legislation on procurement from women-owned businesses in America has achieved. We have had the argument over women. We know that women have at least as much talent as men, but they still fail to get promoted, often by men.

You have to act to tackle unconscious bias. “Encouraging” is not enough, and we do not have years to wait. Let us not just “encourage” business to measure its performance and to plan for a more diverse, inclusive and thus successful company. Let us not just “monitor developments”. Let us ensure that companies understand what unconscious bias is. Let us ensure that they measure their performance. Let us applaud the best, most successful companies. In the post-Brexit world, we will need the talents of everyone to make our way and to succeed in the diverse global economy that we will face.

My Lords, I congratulate the noble Baroness, Lady McGregor-Smith, on her report, which, as my noble friend Lady McDonagh said, is both practical and implementable, which make it a very welcome read. It is easy to see how she could arrive at that arrangement. I mean no disrespect to say this, and I hope the noble Baroness will not take it the wrong way, but the fact that it comes from the Conservative Benches and is written in a very level-headed and logical way makes its impact all the more powerful. We on these Benches, and other colleagues, have raised issues that she raises over a number of years but have not got the sort of response that I have heard today around the Chamber to the recommendations that have been made. I hope it bears also on the Minister when he comes to respond that this is a very well-considered report, which has come from a very interesting area in the political spectrum and has received support all round the House. As many people have picked up, it needs a lot more of a response from the Government than we have seen so far. I hope that when the Minister responds, he can fill in some of the gaps in the Government’s response to this excellent report.

We have had some very good responses from those who have spoken in the debate. I particularly liked the illustrations used by my noble friend—I can call her that, as she was once my Minister—Lady Bottomley and by my noble friend Lord Griffiths. I sympathise with his feeling that he was in the right place on all these matters because he was in an area that seemed to suggest that, as a jolly good chap, he could implement changes—but then discovered to his horror how difficult it was to actually make the transition. I have been there too. The noble Lord, Lord Kirkham, with his direct experience of trying to serve a wide and disparate consumer base, also picked up the point that there are some very obvious lessons to be learned by just looking around us at what we do. For example, looking at the Box to my right, it is very surprising to see a group so representative of the ethnicities in this country, and yet to not make that an issue at all. This is just how it is now in many parts of the Civil Service, and I congratulate it on what it has achieved in that.

It is worth reflecting on the key findings, because they are so startling. One in eight of the working-age population is from a BME background, but only 10% of the workforce and 6% of top management are. The employment rate for ethnic minorities is only 62.8%, compared with 75.6% for white workers. The gap is worse for some ethnic groups; for instance, for those of a Pakistani or Bangladeshi background, the rate drops to something like 54.9%. People from a BME background have an underemployment rate of 15.3%, compared with 11.5% for white workers, and many of them would like to work more hours than they currently do. I found this finding particularly interesting: all BME groups are more likely to be overqualified than white ethnic groups, but white employees are more likely to be promoted than those from all other groups. The potential benefit to the UK economy, which many noble Lords picked up on, from full representation of BME individuals is estimated to be an improvement to our GDP of £24 billion a year—1.3%. It does not take much to feel anger about that.

A lot of people have also suggested that that will lead to the agenda of change that one would like to see, but what we get from the Government is, I think, a very poor response indeed. As somebody has said, this is largely a voluntary arrangement: the report deals with the private sector and the Government can affect only the public sector. But this leaves completely untouched the areas in which the Government have both a stake and an opportunity to make real change. The points made by the noble Baroness, Lady Berridge, were very salient in this area: if it is true for health and safety, and for other aspects of public life, why is it not true for employment rights, for which the benefits are so clear and the attitude so obvious?

Looking in more detail at the government response, the response from the Minister, Margot James, is good in the sense that it picks up and reflects back to the report’s author the value that is in the report. We should all accept that it is indeed very valuable. The response says:

“It is clear from your report that you have examined the issues around race in the workplace … The findings are stark … it is clear that more has to be done”—

so the rhetoric is good so far. The recommendations are then dealt with, but it is quite clear that the Government have taken the strategic view that the only impact this can have is on employment in the Civil Service. They completely ignore the points made by my noble friend Lady Royall and others about the impact that the Government’s procurement system could have in changing the whole way in which people regard race, gender and other aspects relating to ethnic minority issues in relation to the world that we have to inhabit—and I suspect it will get worse after Brexit.

Under the heading “Supporting business”, the Government’s response is basically, “Not us, guv”:

“Businesses are best placed to know what support they need to improve diversity and inclusion and so we will work with them to ensure they have the resources they need to fully embed change within their organisations”.

I will be interested to hear what the Minister has to say about that. As far as I can see, that rather bombastic statement appears to apply only to,

“developing a guide on discussing race in the workplace as well as having a single portal where useful case studies and unconscious bias training packages can be sourced”.

That is pathetic, given the scale of the issue we are talking about. In any case, the Government do far more in making sure that training happens and ensuring that apprenticeships are going to be of a high standard—they will be specifying in future legislation and regulations all sorts of things to do with the quality and content of apprenticeships—so why do they not say in this report, “We will use the opportunities coming up with the Technical and Further Education Bill to ensure that these issues are taught properly and that people understand their responsibilities and the implications of what they do in the workplace”?

The next heading is “Improve transparency”. As people have said, daylight is often the best disinfectant, and we should never neglect that—it is often the first response and a good one—but it will never be sufficient to get to where I think the author of this report wishes to go. On this one, again, the Government seem to be incredibly limp, saying,

“we believe that in the first instance, the best method is a business-led, voluntary approach and not legislation as a way of bringing about lasting change”.

Ministers are always taught when they first step into their department that legislation is probably the last resort. I am sure the noble Lord, Lord Prior, will have had that lesson when he first stepped into the Department of Health, his first appointment when he appeared in front of this House. He will have been told, “You can do far more by changing culture and attitudes”. At the end of the day, though, legislation is necessary. I am sure that the noble Baroness, Lady Berridge, would be able to exemplify what she said about the way in which the courts deal with employment and other things have really changed how the culture operates because there is a standard to which employers will be judged.

I want to pick up issues relating to supply chains, which have also been picked up by other noble Lords. It is the case that organisations, particularly in the public sector but not only there, have been able to change attitudes and approaches all through their supply chains by specifying in contractual terms what they will and will not tolerate. Why is it so obvious in the Government’s response that they do not see this as an opportunity? We have found in other areas of government policy over the past few years examples of where the Government could use their power to effect change. I am thinking particularly of a debate that I had with the Minister only recently about how to improve payment practices for small businesses, where the exemplary, voluntary approach does not work, with something like £64 billion worth of outstanding cash sitting around in big companies’ pockets that should be paid over to small companies but no power that can get that to happen. This has a devastating effect on the economy, on small companies and on the whole process. The Government could do something to sort that out but have chosen not to do so, simply providing someone who will be a postbox for those who wish to complain about it.

The previous Labour Government required that all major projects should make sure that they had a supply of apprenticeships in all the contracts that were signed. Crossrail, which this Government have used a lot as an exemplar of where they want to get to, employs apprenticeships at a high level, and has been very successful in doing so, because the contract specified that those who had benefited from the monies that were being paid for Crossrail should employ apprentices. It can work, and I do not understand why the Government do not do that.

I could go on, but I will not. I will end with some questions for the Minister. The review concluded, in a wonderful phrase:

“There is discrimination and bias at every stage of an individual’s career”.

The figures that I cited reinforced that. The noble Baroness, Lady McGregor-Smith, asked businesses and the Government to act on her recommendations, as the consequences of not doing so would be damaging to the economy and the aspirations of so many, but the Government have decided not to do so. Can they explain why they think a voluntary approach is the right way to do this? As I have tried to exemplify, there are so many ways in which action could be taken, but a simple one, picked up by others earlier in the debate, is that a duty to publish figures in relation to gender pay has been imposed by this Government on all companies of a significant size. Why not extend that to ensure that we get the information necessary for companies to publish data on BME staff?

During the review, as I think was mentioned in the opening address, only 74 FTSE 100 companies replied to the call for data, and only half of those were able to share any meaningful information. Does not more need to be done here? Can the Minister give us an example of how he will put pressure on companies to ensure that at least the information required by one of their own who asks for it should be available? Again, this should be published.

The review highlights the importance of work experience opportunities that companies provide and reiterates a view that we on this side of the House have expressed that unpaid internships can act as a barrier to those without financial support to undertake them. What is the Government’s response to that observation in the review, and what action will they be taking to address the barriers of unpaid internships?

One of the review’s key recommendations is for the Government to assess the extent to which its recommendations have been implemented and take necessary action when required. Will the Government commit to doing that within the suggested timetable of a year and, if so, can the Minister explain how that will happen?

Finally, the Government’s response indicated that they will be setting out to all companies and institutional investors the value of employing a diverse workforce. How do they plan to do that and when will we see it?

The noble Baroness, Lady Bottomley, said, picking up on a point made originally by the noble Baroness, Lady McGregor-Smith, that we have had enough reports in this area. We know what the problem is. It is time now for action. I do hope that the Government will get on with it.

My Lords, it is one of the privileges of being in this House that one can sit through a debate such as this. We are talking about one of the big issues of our time—not just in this country. It is incredible to me that, 50 years after Martin Luther King gave his great speech, “I have a dream”, we still have a Black Lives Matter campaign running in America because young black men are being shot by policemen. This is not a British problem; this is a societal problem in pretty much every country in the world—not just in white-majority countries but in black-majority countries, Indian countries, African countries and the rest. Race is a huge, profound and difficult issue. There are no easy answers to it. If there were, we would have found a solution many years ago.

Let me start with a short extract from the excellent review by my noble friend Lady McGregor-Smith:

“Every person, regardless of their ethnicity or background, should be able to fulfil their potential at work. That is the business case as well as the moral case. Diverse organisations that attract and develop individuals from the widest pool of talent consistently perform better”.

My noble friend Lord Kirkham says that it is a no-brainer. I think that everyone who has contributed to this debate would say that: it is a no-brainer. That is the extraordinary thing about this subject: it is a no-brainer. The moral case is obvious. The economic case is a no-brainer. Yet, as my noble friend Lady Bottomley and the noble Lord, Lord Griffiths, asked: why has it taken so long? If it is a no-brainer, why is progress so slow? Why do young black people have lower aspirations? That is the conundrum that we face today.

The Government welcome my noble friend’s report and encourage businesses to take forward her recommendations. We will work with employers to support them in improving their diversity and inclusion. From a personal point of view, I believe that daylight is the best disinfectant. That is an easy catchphrase, I know, but it is absolutely true.

I want to talk a little bit if I can about my own experience in the NHS, where I was chairman of the workforce race equality standard advisory group before I went to the Department of Health. We have heard a lot about institutional racism over the years, especially in relation to the police following the Macpherson inquiry into the tragic murder of Stephen Lawrence. You would think sometimes, when reading about that, that it was only in the police and that it was only the police that were institutionally racist, but let me paint you a story about the NHS. It brings forward the contrast between words and actions, because the NHS constitution is clear that:

“All NHS staff have the right to be treated fairly, equally and to work in an environment that is free from discrimination”.

Those are almost the same words as in the constitution of the United States, which talked of liberty, equality and the pursuit of human happiness at a time of slavery and segregation. As we say in Norfolk, “Fine words butter no parsnips”. Again, this echoes the title of the McGregor-Smith review: The Time for Talking is Over. Now is the Time to Act. How many times and how many people have said that in the past—and here we are?

Some 20% of the NHS workforce are from a BME background, but only 5% of senior managers are from a BME background; 40% of hospital doctors are from a BME background, and only 3% of medical directors are from a BME background. Out of all the hundreds of NHS organisations, only three CEOs and four nursing directors are from BME backgrounds. People from BME backgrounds are twice as likely to enter a disciplinary process than white people. Even where there are very high levels of BME staff or very large BME communities served by a hospital, representation of BME people in senior leadership positions is far too low. I am sorry that the noble Lord, Lord Patel of Bradford, is not here, because for a short time he was chairman of the Bradford Teaching Hospitals NHS Foundation Trust, and he told me that there was no one from a Pakistani background in a senior position in that trust, despite the fact that the community that the hospital served was largely made up of people from that ethnic background.

These facts have been revealed only recently, in a paper called The “Snowy White Peaks” of the NHS, by Roger Kline. From that, we have developed nine standards—the workforce race equality standards, or WRES. My noble friend Lady McGregor-Smith talked about transparency; every trust has to produce nine standards, in public, going from board representation, training opportunities, promotion, levels of discrimination and the like. They will be published every year, and they have been incorporated not just into the NHS standard contract, which my noble friend Lady Bottomley mentioned, but into the regulatory system in the CQC’s well-led domain.

Research has been published by the King’s Fund’s Michael West, Mandip Kaur and Jeremy Dawson, in a paper called Making the Difference, which makes it absolutely clear that there is a very close correlation between hospital performance, whether it is measured in patient or clinical outcomes, or however you measure it, and diversity. That is supported by work done by McKinsey which shows very clearly that boards with a diverse membership get better corporate results.

We know that black and other minority ethnic people suffer in other ways, not just in the workforce. They die younger. Research done by Professor David Williams, now of Harvard University, estimates that 200 adult black people die prematurely each day in the USA because they are black not white. It is not just about poor housing or less healthcare, because it is true also of college-educated black people in the USA, but because they have to try that much harder and have to be overqualified and put up with all those subconscious slights of day-to-day living: a look of fear in the face of a single white woman; the look of surprise at a moment of success; not getting a good table or good service in a restaurant; and lack of courtesy from other people—all those small slights.

I can recommend to anyone who is interested Professor Williams’s TED talk called “How Racism Makes Us Sick”. In it, he reported on a very broad experiment and noted that black people were associated with words like “violent”, “poor”, “religious” and “lazy”. For whites it was words like “successful”, “wealthy”, “progressive”, “conventional” and “educated”. That is why there is subconscious bias—because there is this stereotype. The noble Lord, Lord Kirkham, said, “I am not a racist, but”. I suspect that applies to everybody. We have a deep, subconscious stereotype of what different people are like and I will come now to why I think that is.

This is my personal view—but it is not just mine. Despite what we have heard from other noble Lords, we have made more progress in removing discrimination against disabled people, women and people with a different sexual orientation. The crucial question is: why has race been so difficult? In part it may be because the roots of the issue are not just cultural but evolutionary. Xenophobia has deep evolutionary roots; suspicion or aggression to outsiders has been an effective strategy for human beings and, more importantly, our forebears for millions of years. Today, interview, selection and promotion processes in the workplace are the modern setting where intrinsic, subconscious bias now most evidently—but, as I have argued, by no means exclusively—plays out. We pick people “like us”; people who will “fit in”; people who will be part of our team: in other words, white, male and who want to play rugby at the weekends.

I have just read a fascinating book called East West Street by Philippe Sands, who writes about the origins of two strands of international criminal law originating from the Nuremberg trials after the war: genocide and crimes against humanity. In the epilogue he concludes powerfully that, for all the disadvantages and unintended consequences of the former law—which focuses on groups rather than individuals—it is necessary because:

“I am bound to accept that the sense of group identity is a fact”.

As long ago as 1883, the sociologist Louis Gumplowicz, in his book on the struggle between the races, noted that,

“the individual when he comes into the world is a member of a group”.

This view persists. A century later, the biologist Edward O Wilson wrote that:

“Our bloody nature … is ingrained because group-versus-group was a principal driving force that made us what we are”.

It seems to him that a basic element of human nature is that,

“people feel compelled to belong to groups and, having joined, consider them superior to competing groups”.

Yvonne Coghill is the co-director of the workforce race equality standard programme in the NHS. She is a black woman from the Caribbean who has been a nurse in the NHS for 30 years. Knowing that I was taking part in this debate, she wrote to me last week, saying: “Beliefs about what good looks like, what constitutes beauty and brains, are deeply ingrained in our society … the problem of race is a systemic and structural one … we are fearful and anxious about differences”.

Of course things have got much better. The six race relations and equality Acts between 1965 and 2010 have had an impact. Overt racism is rarely seen. The civil rights legislation in the USA came in from the 1960s onwards, together with affirmative action programmes. Interestingly, Professor Williams, to whom I referred, got his first break with a minority scholarship to the University of Michigan. I believe very much in giving people an extra hand. You have to look at people’s potential rather than their actual achievements. However, subconscious discrimination is still a major factor in the USA.

What is the conclusion from this? I think it is that there are no quick, easy answers. There is no one piece of legislation that we can pass which will solve these problems. The case for greater urgency is made in this review. As the EY case study in the review states:

“We believe that culture change takes time—and we are therefore patient and at the same time impatient”,

to change the status quo.

We are impatient to tackle this issue because it is a moral and economic imperative. However, we will have to be both patient and impatient—patient because we are trying to change deep-rooted behaviour and impatient because racial discrimination is both a moral outrage and a huge economic opportunity. This very important review from my noble friend Lady McGregor-Smith has the full support of the Government. We will not resort to legislation straightaway but will see how things go. If legislation is needed at some time in the future, we will, of course, consider it at that time.

I conclude by again thanking my noble friend for this report. I hope that in two, three, four or five years’ time, we can look back at this as a moment when things started to accelerate. However, I fear that we need some patience.

I congratulate the noble Lord on his interesting speech, which I will read in Hansard and reflect on. He was asked a number of serious questions about policy from not just me and my noble friends but by noble Lords on the other side of the House as well. I would be grateful if he could confirm that he will write to us about these issues.

I should have said that a number of questions were raised that I could not address—for example, on different issues connected with disability and other issues, including one raised by the noble Baroness, Lady McDonagh. I will read Hansard tomorrow and write to noble Lords on those issues.