Imagine if, after obtaining a care package from social services, you discover that an ailing parent isn't being bathed because the carer feels her superior social origins preclude her from doing so. Or colleagues suddenly stop eating at a table with you and then undermine you professionally because they have discovered that you come from housemaid stock. Or, as one couple alleged to an employment tribunal in the first case of its kind, you are harassed and then end up losing your job for marrying above or below your presumed station.

Should you be protected by law from a form of discrimination that combines the most insidious and humiliating elements of class snobbery and racism? Yes, was the answer given by the Lords last month when they amended the enterprise and regulatory reform bill to treat caste as a protected characteristic by making it an aspect of racial equality. Caste discrimination can affect over half a million Britons, mainly Asians and largely, though not exclusively, Hindus and Sikhs.

The government is opposing this cross-party amendment to equality law and the bill will be discussed by the House of Commons on Tuesday. Advancing the familiar Conservative doctrine that more equalities legislation inflicts red tape and cost burdens on businesses, it also insists that caste discrimination affects only a small number of Britons and that education can adequately address the problem. In taking this stance, it backs powerful interests within the Hindu community who claim representative status, deny that there is a serious problem and – no surprises here – happen to be mainly "upper caste" themselves. This view also flies in the face of government-commissioned independent research that found clear evidence of caste discrimination in the UK in relation to employment and the provision of services; that caste can be the basis for bullying in schools, and that legislation is the most effective way to address the problem, particularly in the private sector. The UN also calls for caste equality to be protected by legislation. As a form of structured inequality that also affects social relations, caste discrimination certainly has much in common with racism although it is more invisible – appearance has no part to play, and both perpetrators and victims typically share geographical or national origins.

Isn't this an internal matter for Asian communities rather than one that should concern parliament and wider British society? After all, discrimination against "lower castes'" in Britain does not take the horrific and violent forms it often does against Dalits in India where, as in Bangladesh and Nepal, despite poor enforcement, caste discrimination is illegal. The numbers affected in Britain are no smaller than pertain to other protected characteristics such as gender reassignment or particular religions. Regardless, the significance of a protected category should rest on a principle of equality, not the numbers affected.

Legislation has both deterrent and educational value, the latter of particular importance for non-Asians in schools and workplaces. Community groups hostile to caste discrimination laws have argued that such legislation would be bad both for community cohesion and for relations between Asian and white communities, providing cultural ammunition to attack Hindus and Sikhs with. But where stratification already exists, calling for cohesion over criticism seeks to impose a false unity and perpetuates an oppressive silence. There are, after all, minorities within minority communities. Power relations within communities cannot intrinsically matter less than power relations between communities.

The more difficult point about cultural ammunition is especially familiar to feminist campaigners from minority communities: how do you address problems such as gender, sexuality and caste discrimination within minority communities without these being misappropriated by xenophobes, racists or even just "muscular" liberals who assert that the west is more evolved and enlightened? It is certainly unhelpful to cast the problem as simply one of un-British immigrant values, as one Conservative peer has, given that there are also centuries-old dissident traditions of challenging caste hierarchies on the Indian subcontinent.

As equalities legislation itself indicates, no community or culture has a lock on equality and fairness. All have sorry histories of discrimination to account for and remedy. Minority communities should not be treated as especially culpable of criminality, as they so often are, but they are also not exempt from addressing their own styles of exclusion and exploitation.

Britain still has plenty to remedy in terms of its indigenous social stratification and class exclusions but that need not preclude extending legal protection to categories of people who are vulnerable to imported prejudices – often in addition to facing white racism. A robust multiculturalism must foster conditions where minority communities can undertake necessary transformations without being condescended to as culturally inferior or told sternly to assimilate. In this instance, it is persistent Dalit campaigners and allies, not benevolent outsiders, who have called for legal recourse to assist the process. Parliament must waste no more time in making it available.