The phrase 'not a bad singer for an Englishman' says merely that there are Englishmen who are better at singing and there are those who are worse. That is a fact. Trying to make an issue of racism out of someone calling an Englishman an Englishman looks plain batty to me, or at worst, racist in itself. I'm quite sure if the lady had actually intended to be racist or insulting, she could have done a lot better than that.