The new planners

Richard Norrie, 21 September 2021

• The Arts Council cannot ignore its responsibility for the fiasco surrounding the English Touring Opera

The English Touring Opera’s recent decision to, in effect, sack half its orchestra in favour of ‘prioritised increased diversity’ has rightly been condemned. What this entailed was not renewing the contracts of 14 white musicians, many of whom have been regulars with the company, in order to hire musicians who qualify as ‘diverse’.

This smacks of hiring and firing based on race with the musician’s union describing itself as ‘appalled’.

In its letter to the musicians, the company claimed:

‘This is in line with the firm guidance of the Arts Council, principal funder of ETO’s touring work, and of most of the trust funds that support ETO.’

The company receives £1.78 million per year from the Arts Council England.

The Arts Council responded by saying ‘we did not instruct the English Touring Opera to send this letter’.

It cannot however ignore its role as likely the instigator of this fiasco, since it has been threatening the organisations it supports with a loss of funding if they do not reach ‘stretching’ targets of diversity.

Quoted last year in The Guardian is Abid Hussain, who is director of diversity at the Arts Council:

‘Certain communities are significantly under-represented and we need to change that. We need to be very clear: if organisations are not delivering, they could lose their funding…We are moving to a point where targets are going to be set and if organisations are not delivering or meeting targets there will be implications and repercussions.’

‘My frustration is that we have seen a very slow pace of change in the larger organisations that receive funding. We have to see a higher level of expectation to make sure they are reflecting the diversity of their local communities.’

There are though some major flaws to both the assumptions of the Arts Council and the statistics it uses.

The Arts Council claims the workforce of its ‘portfolio’ funded organisations to be 13 per cent which it compares to the working age population of 17 per cent. Against this benchmark, it judges there to be not enough diversity.

This is a mistake in that around half of the minority population is born abroad, many recent immigrants from non-Western countries. You will not find too many masters of Western music within this subset, for instance. It takes years of (expensive) instruction to master an instrument such as the violin, and that will not be found in places such as rural Pakistan.

It is therefore unreasonable to expect proportionate participation in the arts.

The Arts Council sees itself fit to determine not just how many people of this colour or that, sex or disability, but also what audiences should be. In the foreword to its most recent diversity report, its chair Sir Nicholas Serota wrote that diversity data should be used to ‘diversity their governance, leadership, workforce, programming and audiences’. What this necessitates is large bureaucracies, at the expense of performers, to in effect culturally assimilate people whose tastes are informed by their countries of familial origin. It is thus beyond the competence of an opera company, which is only really good at putting on opera.

Matters are made worse by the fact that the Arts Council’s data are confounded by missing data. It prominently claims that 13 per cent is not white, but this is not true since the denominator includes all those who did not declare their ethnicity – 24 per cent or one quarter. What this means is that the correct interpretation is at least 13 per cent is not white. The implication of this is there is no reason to believe the portfolio workforce is disproportionate to the national population. Moreover, the level of uncertainty is sufficiently large to make the effect of the instigation of Hussain and Serota unknowable.

The same standard is repeated in the Arts Council’s data on individual portfolio organisations. They are asked to raise their ‘diversity’ measured against yardsticks with sometimes intolerable levels of missing data. Failure to do so, entails potential termination of funding. It is absurd as well as cruel.

It is also arguable that the Arts Council’s portfolio musicians are already sufficiently diverse, relative to the supply of available musicians. My research has found 8 per cent of professional musicians are not white as are just 7 per cent of people who play a musical instrument. The Arts Council’s figures put the diversity of its musicians at, at least 6 per cent, which is the same figure it puts music audiences at.

Bureaucrats like Hussain and Serota have put an unrealistic set of expectations on its organisations. They have no idea what should be; it is certainly not outcomes proportionate to the census. Matters are not helped by the promulgation of dubious statistics.

They have then frightened the life out of organisations such as the English Touring Opera which has made panicked decisions. We know that its natural preference was to rehire these musicians who had proven themselves repeatedly, since they had done so over a period of 20 years.

The result of this will be that all their experience that forms the bedrock of the orchestra will be gone. This will be the ruin of the company as well as likely resulting in litigation and the interest of the EHRC, for which the Arts Council’s diversity and inclusion enthusiasts must shoulder their share of the responsibility.

It is, however, conceivable that the English Touring Opera is talking ‘diversity’ while laying off older, more expensive musicians perhaps due to shortages in funding due to the lockdown. The Daily Mail reported it let go 14 white musicians or around half its all-white orchestra. An orchestra of 28 would only require 5 non-white replacements to get to 17 per cent non-white. The reported facts do not quite add up and perhaps there is more to this than meets the eye. The musicians were aged 40-66 and may have been let go for ethnic minority ones who are younger. This is potentially a case of age discrimination as well.

In any case, heavy handed ideological measures only increase the probability of bad decisions.

• Why are we still talking about mandatory ethnicity pay gap reporting?

Last Monday, the House of Commons held a debate on introducing mandatory ethnicity pay gap reporting. This measure already exists with regard to gender, with companies with more than 250 staff obliged to report the difference in pay between men and women. The debate came about after a petition was signed by over 130,000 people, disproportionately London-based.

There are a group of politicians and campaigners including Theresa May, Simon Woolley, Ruby McGregor-Smith and Sandra Kerr who advocate this policy. However, it is hard to pin down an actual argument for what this is supposed to tackle or achieve.

For instance, here is a quote from McGregor-Smith:

“It must be a collective goal that our organisations reflect the communities we live in and mandatory ethnicity pay data gives businesses, investors, and regulators the tools they need to see the current reality and where changes need to happen. It’s only once we see organisations publicly start to report the diversity of their workforce that we will see real change start to happen.”

Note the lack of a stated aim or defined problem. It is usually vague talk of shining spotlights, ‘real change’, and bringing about fairness. It should also be stated that the McGregor-Smith Review into ethnic disparity at work, did not recommend mandatory ethnic pay gap reporting, but something different, namely diversity of staff broken down by pay band.

Peter Cheese, who is the chief executive of the Chartered Institute of Personnel and Development advocates that the measure is to tackle unfairness while his organisation muddles up differences in outcome with discrimination. He seems to expect that data on outcomes in pay give you some sort of special knowledge to get to the bottom of what may or may not be a problem:

‘While there will undeniably be a range of social, economic and employment factors which influence this, responsible employers simply cannot separate themselves from it and wait for societal changes. They need to do their part to create change, and ethnicity pay reporting is a good place to start.’

The CIPD does not explain what companies should do other than analyse the data. What steps forward he offers, are loose and generic and not sufficient to guide employers with the real issues the venture will likely throw up. Its report on the matter makes the case for fairness at work, but not the case for the efficacy of the measure.

Meanwhile, Professor Susan Milner at the University of Bath and a member of the GW4 Pay Equality Research Consortium, argues mandatory reporting is necessary to ensure equal standards in reporting. This begs the question as to why it is needed in the first place. She writes:

‘Ethnicity pay gap reporting will provide a similarly imperfect picture, but still a much-needed one that organisations can learn from in order to improve their employment practices.’

Her argument is that the act of forced publication does not assume that discrimination exists but encourages companies to find out why gaps do. The argument flounders on her own admission that the data are flawed, and so from which, there are natural limits on what can be gleamed.

If the argument is that this is to either stop discrimination in pay or bring about equality of outcomes, then this is not a compelling one.

We know that differences in pay may be attributed to other factors such as age, experience, sector, or educational attainment. Thus, data on differences in average pay are ambiguous while the expectation that groups that are different in all manner of ways should have the same outcomes is hopelessly naïve. Moreover, we know that some ethnic minority groups receive higher pay. Cheese quotes data on white British people earning more than Pakistanis and Bangladeshis, but is coy about Indian and Chinese people, nor black Caribbean women, who earn more.

We further know the ethnicity pay gap to be largely minimal at 2.3 per cent, comparing all white employees with non-white employees as of 2019, down from down from 8.2 per cent in 2015 and 5.1 per cent in 2012. If it is small and declining, then why the need for intervention?

It is hard to argue against a policy that has no consistent stated purpose. If the aim is to tackle discrimination, then this is a reversal of the liberal standard of innocence before proven guilt. Ethnic discrimination in pay is illegal. What the policy does is oblige companies to prove themselves innocent through the publication of data that are not necessarily evidence for it.

Moreover, we have some idea of the efficacy of the policy with regard to gender. Due to the government suspending the obligation to report due to the pandemic, data have become patchy. But over three years, we saw the gender pay gap trickle upwards within companies. Of 5,025 companies that submitted data for both 2017/18 and 2019/20, 2,135 saw the median pay gap decline in favour of women. 2,669 saw the median pay gap grow in favour of men, with the remainder showing no change.

But we know nothing of what went before in order to judge whether or not this is truly a worsening, since it might actually be good in that the rate of increase in favour of men had slowed. Without its historic context, the truth of the data is obscured. Introducing the measure at any point in time, will necessarily mean not knowing what went immediately before.

They data refer to pay within medium to large companies but it should be borne in mind that the gender pay gap overall was closing on its own steam, rendering the necessity of the intervention (on its own terms) highly questionable.

The Sewell report recommended that ethnicity pay gap reporting not be mandatory but conducted voluntarily. It criticised the measure as largely inoperable in many parts of the country where it is likely many employers have just a handful of minority staff. This would lead to figures likely swayed by small sample sizes, for example a factory in Redcar that employees a couple of African security guards. In what sense would the ‘ethnicity pay gap’ figure for such a business provide anything of any value and not just a misleading and damaging figure that gives a false impression of ‘inequality’.

And as Julian Jessop argued, which pay gap are we talking about here? There are 19 ethnic groups defined by the Office for National Statistics. Calculating data for all groups will produce a statistical soup of conflicting data with some groups fairing better, others worse. Alternatively, the approach recommended by Peter Cheese is to report white versus ‘BAME’. This will provide something manageable but will obscure all the complexity, producing an incomplete and misleading picture.

Advocates of this policy are demanding that the government in effect confiscate companies’ private information. There are though opportunity costs to doing this, as well as potentially harmful negative publicity. Cheese’s approach is not just publishing data, but lengthy analysis and public relations efforts to explain the data, to appear transparent. All this is costly and at the expense of economically meaningful business.

The supposed benefit of being able to identify areas where change is needed flounders on the inoperability of the statistics. The potential unintended consequences include groundless litigation and inter-ethnic avarice and resentment. Simultaneously, the statistics provide an endless source of complaints and problems necessitating ‘solutions’ provided by the diversity and inclusion industry. Its list of accomplishments include the discredited ‘unconscious bias training’.

Furthermore, it is not true that companies actively want this measure. If they did, then there would be more than 13 out of the FTSE 100 companies publishing the data. It is desired most of all by the diversity and inclusion industry, nestled within human resources departments, which has a vested interest in more data.

The government is cool on the idea of pay gap reporting, only its advocates are now seeking to create facts on the ground by encouraging individual organisations to introduce the policy. The intention is to strong-arm the government into introducing the measure. The measure was a Tory manifesto commitment in 2017, which was then pushed into the long grass with a public consultation, the results of which have not been made public. It is obvious that Liz Truss was not a fan when she was equalities minister, since she waved the requirement to report on gender during the pandemic.

The government needs to have the courage of its convictions and reject the policy outright as well as repeal gender pay gap reporting.

The problem

Both these examples are part of a much wider phenomenon. After the Second World War, government bureaucrats sought to create a planned economy, whereby they dictated how much was produced and consumed. This proved massively inefficient. The problem is always the same in that the knowledge to make these decisions is always more freely available to private individuals than state bureaucrats.

The idea fell out of favour with Mrs Thatcher, although perhaps is coming back in pandemic-times. Instead, we have latched onto the idea of a planned society, whereby elite individuals think they know best who should be employed in any given place of work. Note that both McGregor-Smith and Serota are highly decorated individuals who both believe that the workforce should resemble the community in which it is situated. Given the differences between groups, this is unrealistic. Moreover, the statistics are neither sufficient knowledge nor power to bring about what they envisage. It is folly.

Trying to force the issue above and beyond the free association of individuals will mean wrong appointments and waste, fostering resentment and ungrounded accusations of racism. The inability to bring about piecemeal change will only foster demands for more radical reform at the expense of a way of life that actually works for most; see the burgeoning minority middle class as evidence of this. On top of this is an ever-growing vested interest that profits from this, that never actually achieves its goals and only ever complains, demanding more regulation, from which it benefits as regulators.