The enquiries into police action in the Stephen Lawrence murder, the Macpherson report and the subsequent race relations legislation have altered the political, professional and wider social climate of debate on equality issues, including inequalities in minority ethnic exclusions. The paper analyses the meanings given to racism and institutional racism, and the contested political territory which shapes and limits the possibilities of responses working towards equity. It considers the evidence on the extent to which the Race Relations (Amendment) Act 2000 (RRAA) has been implemented, reporting particularly on sustained disproportionality in exclusions experienced by some minority ethnic groups. Disproportionalities, in terms of exclusion and attainment, are deemed "institutionally racist" outcomes produced annually as a consequence of organisational practices, limited will and low levels of investment at national, local and school levels. Critical Race Theory and writings about "white supremacy" attempt to explain the normal and enduring character of racism, but the outcomes of "passive racism" are best comprehended as a product of neoliberal policy-making which limits interventions in aggregate performance for a group, giving primacy to individual effort and talent as explanatory concepts. The RRAA, in force since 2002, can, with hindsight, be seen as a legalistic, rhetorical step too far, unable to marshal governmental or institutional will and financial commitment to implement its requirements. (Contains 1 table and 1 figure.)