The Commission for Racial Equality has advised small businesses of the dangers of falling foul of the law on racial equality

The Commission said that being positive about racial equality makes good business sense.

Trevor Phillips, CRE Chair, addressed the annual Federation of Small Businesses conference in Blackpool, and stressed the CRE's desire to help small businesses all over Britain become more competitive and prosperous.

He said: "We understand that, despite good intentions, racial equality often comes a long way down the list of priorities for smaller businesses. But in today's increasingly competitive global market customers are expecting and demanding more, and good racial equality practices can give you that all-important competitive edge.

"Thousands of public bodies regularly award contracts to small businesses. Now, by law, they have to ensure that their contractors take racial equality seriously. So whether you're a small catering, domestic services or building and maintenance company, getting it right on racial equality really does pay off."

Mr Phillips announced a new CRE guide on CD-Rom, sponsored by HSBC and Post Office Ltd, to help smaller businesses weed out racial discrimination and promote equality of opportunity. The CD-ROM is available free on request from any HSBC branch or by calling The Stationery Office (TSO) on 0870 240 3697.