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.