Where does the European impasse now leave Britain?

One month on, Cameron's veto looks an even greater folly.

There is another side to David Cameron's eurozone veto that hasn't been told. Staying out of the euro was not a cunning example of British sagacity but rather a potent symbol of the weakness of the British economy. What was not admitted was that, though still the sixth largest economy in the world, Britain was judged not fit to compete in an open European economy where a single currency was underpinned by fixed exchange rate and interest rates.

That judgement has been amply confirmed by events. In 1982 Britain had a surplus on its trading account in goods of £1.9bn. Since then it has steadily deteriorated to the point where UK deficit on traded goods reached an unprecedented £100bn, no less than 6.8 per cent of our GDP. What makes this decline so staggering is that it occurred despite a 23 per cent devaluation of sterling over the last three years.

Such a precipitate decline is simply unsustainable. We cannot continue to enjoy our standard of living when it is dependent on such a huge loss of competitiveness.

In that context to try to preserve the City of London untouched -- when it is a major cause of that competitive breakdown as well as largely responsible for the £850bn increase in Britain's indebtedness following the financial crash -- is utterly perverse.

Instead the number one objective for Britain should now be a single-minded concentration on a renascence of British manufacturing as the only means to regain the competitiveness on which our future depends. That should be accompanied by a radical reform of UK banking so that its prime role becomes the promotion and enhancement of British industry. This approach should then determine our policy towards the euro and any future EU directive on financial services regulation.

Hitherto Britain has attracted foreign direct investment largely as a base for export to the EU market and because costs are lower through low pay and de-regulated working conditions. R&D is generally centred abroad and profits generally repatriated to the foreign country. This is not an adequate platform on which to build a dynamic, competitive and sustainable manufacturing base as the core of UK economic growth.

Instead a successful national manufacturing system requires indigenous supply chains which profitably connect the different competences of a diverse population of small-medium-giant enterprises within powerful cluster networks. British manufacturing at present has few large corporate players with UK headquarters that have a global reach, broad capabilities and a large workforce over 50,000. Yet critically these are the companies that boost cost recovery by selling branded finished goods, sustain civil R&D, build high-tech capabilities, as well as connect backwards to domestic suppliers.

Britain lacks these crucial chain-supporting enterprises because short-termism always trumps long-term market share. Giant manufacturing firms like GEC, ICI, Lucas and TI were broken up when assessed as inadequately profitable, and privatisations (for example, rail and electric power) were carried through without regard to a domestic supplying industry.

As a result Britain is now an economy of small workshops, with less than 2,000 factories employing over 200 compared with 107,000 employing less than 10. The UK propensity to import is therefore much higher largely because of reliance on foreign-owned assembly within global systems, and UK balance of trade prospects project an unsustainable increase in the deficit which will require permanent deflation to damp down import demand.

All these entrenched problems point to the need for systematic prioritising on capacity building and investment right across the whole spectrum in manufacturing, as indeed has been advocated by the CBI 20-year export recovery plan. Central to achieving that is radical banking reform. The City of London remains heavily focused on mortgage lending, derivatives and offshore speculation. Worse still, many banks lend on a one-off basis for a specific project on a limited timescale and expect high annual returns on investments to meet their loan repayments which often appear too risky in uncertain market conditions.

By contrast, relational banking is a central factor underpinning German manufacturing success, linked with the clustering concept of the Mittelstand offering a strong local or regional network uniting major manufacturing companies with their suppliers, ancillaries and customers as well as their banks. This is a business model in Baden Wurttenburg, Aemilia Romagna and other European regions which the UK should develop in manufacturing arcs round Birmingham, Manchester-Liverpool, Newcastle as well as the South-East.

But the key banking reform needed is the restoration of public control over the money supply. As a result of the Competition and Credit Control measures in 1971, the lifting of exchange controls in 1979 and the abolition of all controls over consumer credit and the de-regulation of housing finance in the 1986 Big Bang, the commercial banks have now become responsible for the issuance of over 97% of domestic credit creation.

They have used that power to become the major generator of unsustainable asset bubbles and thus of great economic instability. Through the shadow banking system, proliferation of derivatives and securitisation they have gone to great lengths to evade public controls and to pursue their private interests at the expense of the national interest. They have used their control over the money supply largely to feed the property boom and foreign speculation whilst allocating as little as 8 per cent to productive investment.

For all these reasons control over the money supply should be brought back into the public domain. This was the mechanism used by many of the most successful countries in this last century, especially Japan, Korea and Taiwan after the Second World War.

Under this "window guidance" the central bank would determine the desired nominal GDP growth and then estimate the amount of credit creation necessary to achieve this. Then in consultation with the main financial and industrial sectors, but in accordance with strict criteria, it would spread this credit across the range of various types of banks and industrial sectors.

Speculative transactions like today's lending to hedge funds was firmly suppressed. Consumer loans on any significant scale which would trigger inflationary demand for consumer goods and draw in increased imports were discouraged and hard to get. Priority was given to productive investment - plant and equipment, key services, and enhanced productivity via new technologies and R&D.

By contrast, rejection of the eurozone and keeping the City untouched and unregulated is a tunnel vision leading to economic unviability and ultimately self-destruction. Only a sustained revitalisation of UK manufacturing, the real lifeblood of the economy, together with fundamental banking reform, can now save Britain.

Michael Meacher is Labour MP for Oldham West and Royton.

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Misogynoir: How social media abuse exposes longstanding prejudices against black women

After decades as an MP, Diane Abbott finally spoke out about the racist and sexist abuse she faces. But she's not alone. 

“Which STD will end your miserable life?” “This is why monkeys don’t belong here.” “I hope you get lynched”. These are just some of the many messages Seyi Akiwowo, a Labour councillor in Newham, told me she has been sent over the past three weeks. Akiwowo has received reams of violent and racist abuse after a video of her suggesting former empires pay reparations to countries they once colonised (and whose resources they still continue to plunder) went viral. She doesn’t expect everyone to agree with her, she said, but people seem to think they’re entitled to hurl abuse at her because she’s a black woman.

The particular intensity of misogyny directed at black women is so commonplace that it was given a name by academic Moya Bailey: misogynoir. This was highlighted recently when Diane Abbott, the country’s first and most-well known black woman MP and current shadow Home secretary, spoke out about the violent messages she’s received and continues to receive. The messages are so serious that Abbott’s staff often fear for her safety. There is an implicit point in abuse like this: women of colour, in particular black women, should know their place. If they dare to share their opinions, they’ll be attacked for it.

There is no shortage of evidence to show women of colour are sent racist and sexist messages for simply having an opinion or being in the public eye, but there is a dearth of meaningful responses. “I don’t see social media companies or government leaders doing enough to rectify the issue,” said Akiwowo, who has reported some of the abuse she’s received. Chi Onwurah, shadow minister for Business, Innovation and Skills, agreed. “The advice from social media experts is not to feed the trolls, but that vacates the public space for them," she said. But ignoring abuse is a non-solution. Although Onwurah notes the police and media giants are beginning to take this abuse seriously, not enough is being done.

Akiwowo has conversations with young women of colour who become less sure they want to go into politics after seeing the way people like Abbott have been treated. It’s an unsurprising reaction. Kate Osamor, shadow secretary of state for International Development, argued no one should have to deal with the kind of vitriol Abbott does. It’s well documented that the ease and anonymity of social media platforms like Twitter and Facebook have changed the nature of communication – and for politicians, this means more abuse, at a faster pace and at all hours of the day. Social media, Onwurah said, has given abuse a “new lease of life”. There needs to be a concerted effort to stop people from using these platforms to spout their odious views.

But there is another layer to understanding misogyny and racism in public life. The rapid and anonymous, yet public, nature of social media has shone a light on what women of colour already know to be a reality. Dawn Butler MP, who has previously described racism as the House of Commons’ “dirty little secret”, told me “of course” she has experienced racism and sexism in Parliament: “What surprises me is when other people are surprised”. Perhaps that’s because there’s an unwillingness to realise or really grapple the pervasiveness of misogynoir.

“Sometimes it takes a lot of effort to get someone to understand the discriminatory nature of peoples’ actions,” Butler explained. “That itself is demoralising and exhausting.” After 30 years of racist and sexist treatment, it was only when Abbott highlighted the visceral abuse she experiences that politicians and commentators were willing to speak out in her support. Even then, there seemed to be little recognition of how deep this ran. In recent years, the Labour leader Jeremy Corbyn has been ridiculed for having a relationship with her in the 70s, as if a black woman’s sexuality is both intriguing and laughable; people regularly imply she’s incompetent, despite having been in Parliament for three decades and at the last general election increasing her majority by a staggering amount; she has even been derided by her own colleagues. Those Labour MPs who began the hashtag #PrayforDiane when she was off work because of illness spoke to a form of bullying that wouldn’t be acceptable in most workplaces.

These supposedly less obvious forms of racism and sexism are largely downplayed or seen as unrelated to discrimination. They might be understood through what influential scholar Stuart Hall called the “grammar of race”. Different from overtly racist comments, Hall says there’s a form of racism that’s “inferential”; naturalised representations of people - whether factual or fictional - have “racist premises and propositions inscribed in them as a set of unquestioned assumptions”. Alongside the racist insults hurled at black women politicians like Abbott, there’s a set of racialised tropes that rely on sexualisation or derision to undermine these women.

The streams of abuse on social media aren’t the only barrier people of colour – and women in particular – face when they think about getting into politics. “I don’t think there’s a shortage of people in the black community who put themselves forward to stand for office, you only have to look at when positions come up the list of people that go for the position,” Claudia Webbe, a councillor and member of Labour's ruling body the National Executive Committee told me. As one of the few black women to hold such a position in the history of the Labour party, she knows from her extensive career how the system works. “I think there is both a problem of unfair selection and a problem of BME [black and minority ethnic] people sustaining the course." Conscious and unconscious racial and gender bias means politics are, like other areas of work in the UK, more difficult to get into if you’re a woman of colour.

“The way white women respond to the way black women are treated is integral,” Osamor says, “They are part of the solution”. White women also face venomous and low-lying forms of sexism that are often overlooked, but at times the solidarity given to them is conditional for women of colour. In a leaked letter to The Guardian, Abbott’s staff criticised the police for not acting on death threats, while similar messages sent to Anna Soubry MP resulted in arrest. When the mainstream left talks about women, it usually means white women. This implicitly turns the experiences of women of colour into an afterthought.

The systematic discrimination against women of colour, and its erasure or addendum-like quality, stems from the colonial racial order. In the days of the British empire, white women were ranked as superior to colonised Asian and African women who were at different times seen as overly sexualised or unfeminine. Black women were at the bottom of this hierarchy. Women of colour were essentially discounted as real women. Recognising this does not equate to pitting white women and women of colour against each other. It is simply a case of recognising the fact that there is a distinct issue of racial abuse.

The online abuse women of colour, and black women specifically, is an issue that needs to be highlighted and dealt with. But there are other more insidious ways that racism and sexism manifest themselves in everyday political life, which should not be overlooked. “Thirty years ago I entered parliament to try and be the change I wanted to see,” Abbott wrote. “Despite the personal attacks and the online abuse, that struggle continues.” That struggle must be a collective one.

Maya Goodfellow researches race and racism in Britain. She is a staff writer at LabourList.