George Pitcher: Legislation won’t end discrimination at work

Issues of racial discrimination and inequality have been given a dangerous edge since last September’s atrocities in the US put what might loosely be called the East and the West on a war footing.

Since the liberations of the Sixties, racial issues have become institutionalised in this country. Only jolting events such as riots in marginalised communities, Salman Rushdie’s fatwa and the murder of Stephen Lawrence remind us that there is a human agenda to be addressed.

And it takes the start of a bloody terrorist war to remind us that such issues, left unaddressed and unresolved, threaten to kill us, destroy economies and dismantle societies. It’s against this background that the Commission for Racial Equality’s (CRE) chairman, Gurbux Singh, has been touring the Confederation of British Industry (CBI), the British Chambers of Commerce and the Institute of Directors.

One of his messages is that unless companies recruit more non-whites in managerial jobs, they will face new anti-discrimination legislation. At the Royal Society of Arts this week he will state that the real challenge is to foster a British identity to which people of all races and faiths can comfortably subscribe.

Amen to that. Former Tory minister Lord Tebbit’s grotesque “cricket test” mentality – namely that, to be truly British, you must support the national team – has been replaced by more thoughtful, but no less nettle-grasping, integrative declarations of intent from Home Secretary David Blunkett.

Yet there is much to unpick from the CRE’s agenda. It’s interesting to note that the CRE appears specifically to be addressing business in its latest campaign. It has been accused of meddling in politics in the past. This is an absurd accusation – to suggest that race is not a political issue is to suggest that social inclusion is not either.

It would appear that Singh’s campaign acknowledges that the agent of progress on racial integration is not government but business. This plays directly with the view that global business disfranchises citizens in democracies and that, if you want to get anything done by way of social progress, you get businesses, rather than politicians, to do it.

There may be more prosaic reasons for Singh to address the business community. He points out that the CBI successfully lobbied the Government to exclude the private sector from new legislation, enacted this month, under which the CRE will have much wider powers to police equal opportunities.

The CRE will have powers to enforce anti-discrimination regulations in the public sector, but the CBI held that the private sector could be trusted to put its own house in order. Singh doubts that it can.

What he is now saying is that if the private sector can’t integrate a wider representation from ethnic minorities into its managerial structures, British industry will face further legislation to make sure it does.

That sounds like a threat to me. A more cynical mind than mine might go further and suggest that Singh is driven not by a desire to encourage the private sector to get its racial act together, but by the desire to point out its shortcomings. That way, his watchdog’s legislative powers might be extended to forcing companies to accept the CRE’s will.

This may not be an unconstructive strategy. A report from the Runnymede Trust two years ago found that only one per cent of senior managers at FTSE-100 companies came from an ethnic minority. That situation has not changed. But it also plays into the hands of the CRE’s right-wing detractors, who claim that it does at least as much to aggravate racial tensions and discords as it does to alleviate them.

The question has to be whether the best (or only) alternative, if companies are unwilling or unable to address their policies on race progressively, is to force them to do so legislatively. I can’t believe that is the best solution.

Morley Fund Management, the &£100bn-plus asset management arm of the UK’s largest life assurer, CGNU, has published a league table of companies ranked by their commitment to social and environmental issues. Nearly half the companies in the FTSE 100 fail to meet Morley’s criteria for inclusion in its ethical funds. Alongside defence, tobacco and alcohol companies are HSBC, BSkyB and Dixons.

Reasons vary from environmental issues to labour standards. Morley claims it is not an investment blacklist, but a “sustainability matrix” that encourages managements to change their practices for the better.

I’m not sure I like this approach either, as it smacks of the smug piety of enlightened individuals who sit in judgment over others. But at least it forms part of a social debate, rather than being a simple threat of legislation from a statutory body. Furthermore, it encourages positive action from companies in the most effective way possible – by restricting their access to the capital markets.

The CRE could learn from this. At least as effective as the threat of legislation would be the inclusion of race policies in ethical funds’ indices. If there’s one thing we should have learned this past year, it’s that we must strive for consensus rather than confrontation.

George Pitcher is a partner at communications management consultancy Luther Pendragon