Nick Clegg’s feisty speech on race equality has catapulted the country’s ethnic minority entrepreneurs into the political spotlight. The Deputy Prime Minister marked the 30th anniversary of the publication of the Scarman report by declaring that ‘economic opportunity is the next frontier for race equality.’  He went on to proclaim that ‘we need to rebalance our economy along racial lines’. The ‘unleashing’ of ethnic minority business talent was identified as central to building a strong and dynamic economy. Banks were singled out for particular attention. Andrew Stunnell is to lead a review into the barriers preventing ethnic minority entrepreneurs from accessing finance.

 

Such forthright endorsement for equality and ethnic minority enterprise is welcome, although it has to be said, a little surprising. The Coalition government has been criticised for its lack of commitment to equality in a number of policy areas. There has been much comment on the dilution of the Single Equality Act. The association of the speech with Scarman will also strike some as ironic. The Scarman Report provided the impetus for the creation of a number of enterprise agencies to encourage ethnic minorities into self-employment. Research by CREME shows that many of these agencies have not withstood the onslaught of public sector spending cuts. New initiatives, notably Local Enterprise Partnerships, appear to have little to say about diversity issues.

 

And what of the thorny question of access to finance and ethnic minority businesses? Clegg was voluble in highlighting the widely varying experiences of different ethnic groups when it comes to raising money. He was less forthcoming in explaining the fact that this is often a reflection of creditworthiness rather than blatant discrimination.

 

This is not to understate the challenges that remain. Clearly, there is an enduring perception that some ethnic groups are not treated fairly. Many aspiring minority entrepreneurs are discouraged from seeking the finance that they need to get going. The perception of unfair treatment needs to be addressed.

 

CREME launched the Enterprise and Diversity Alliance (EDA) to tackle this and other barriers facing ethnic minority businesses. The EDA links minority firms directly with initiatives arising from the British Bankers’ Association. This is resulting in the direct provision of high level finance expertise to minority businesses through a mentoring programme. Banks also benefit from research on minority enterprise and engagement with key intermediaries.

 

Nick Clegg should be commended for his declarations on equality and enterprise. He is right to look to the Banks for support; many are responding.

 

But he also needs to ensure that his enthusiasm is reflected in the government’s own policies and initiatives.

 

Professor Monder Ram OBE

Director, CREME