Race in the Workplace: The McGregor-Smith Review

Lord Stevenson of Balmacara Excerpts

Monday 24th April 2017 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

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.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

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.

[Lord Stevenson of Balmacara]

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.

[Lord Prior of Brampton]

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.