We all know that there is racial tension in Oldham and in other parts of the country. Some of it relates to genuine racism from both whites and Asians and this is why there is the tension. It works both ways.
As a result, some white English people wish to re-affirm their Englishness in a similar way to the way that some Asian people wish to re-affirm their heritage.
As this is a country where there is supposed to be freedom of speech, so what if people wish to have a flag that says what it says. If they then go round finding the nearest non-white and start putting the boot in, then these people are idiots and action would need to be taken.
The overtly PC attitude that is taken up in this country, in my opinion, will cause more damage in the long-run, as it harbours feelings of resentment, and the PC attitude, in my opinion, has led to examples of reverse discrimination which perpetuates the resentment. Outright racism is, thankfully, still on the decrease and outright racists are often caricatured in a manner that makes light of their opinion. However, the same is happening, if not increasingly so, to the PC attitude, and their overtly PC attitude is rapidly being caricatured (see League of Gentlemen, Little Britain) and it may only be a matter of time before extremism comes back into fashion. If the British economy does sink into depression, then extremism may well be on the increase and we could see a return to the archaic attitudes that the absolute majority want to avoid.
The good aspect about this country is that you can say things like "I'm proud to be English/British" but this is rapidly becoming a bit of a swear word these days. I find this incredibly sad. As a British person who has Korean roots, I know a very large number of people who are patriotic and are openly so. This says, in my experience, nothing about their attitudes towards other races, or I would not be friends with them. I have been accused of pandering to the far-right attitude, but that's simply not true. I feel strongly about it, which is why I comment on it. I feel I have a fair attitude towards racism, and I understand that human nature dictates that we are nationalistic (to an extent). We are all fundamentally tribal, hence our affinity for being associated with Brentford Football Club. We are are proud to come from West London. We are proud to be Londoners. We are proud to be southerners. We are proud to be English. We are proud to be British. We are proud to be European. And so on. It just depends on the situation.