Osborne's ring fence will be made of cheese wire

Power to break up the banks.

So Osborne is going to "reset the banking system". A difficult thing to do with trust between Westminster and the banks at an all time low. How is he going to do it?

Well, first there's going to be a ring-fence: but it's to be not so much electrified as made of cheese wire - if banks don't respect it, regulators will be able to break them up.

It's not just about the fence though - he also plans to make the banking sector more competitive by making it easier to switch bank accounts, and by introducing a new regulator who'll aim to help out new competitors who want to enter the game. There are also talks over how consumer power can be increased, to hold the banks in check.

There is a plus side for the banks: the leverage ratio won't be changed beyond 1:33, but as might be expected, they have not taken kindly to the news:

Anthony Browne, the head of the British Bankers' Association said:

This will create uncertainty for investors, making it more difficult for banks to raise capital which will ultimately mean that banks will have less money to lend to businesses.

"What banks and business need is regulatory certainty so that banks can get on with what they want to do, which is help the economy grow. This decision will damage London’s attractiveness as a global financial centre.

"Uncertainty" isn't really the issue though - banks have been under changing regulation since 2008. The main problem for the banks will now be flexibility, according to Credit Suisse analysts (via FT Alphaville):

Reducing options to transfer capital and funding – As we understand it, banks will be under tight scrutiny to implement strictly a ring-fence. This will clearly limit the flexibility for banks when setting-up their ring-fence plans and limit options to transfer capital and funding. Although this is hard to estimate at this stage, this could increase the overall costs of the reform for the industry. We currently do not have an impact in our estimates.

If ring-fence is to work, it needs to be enforced - but as banks make their money by finding their way around such restrictions, a truly impenetrable fence'll cost. Here is a summary of the estimated hits to the economy via FT Alphaville:

Estimates costs from implementation – The draft legislation published in October 2012 highlighted the following costs for the broader industry and economy: (i) on-going costs of £2-5bn per annum, which compares to our total profit £26.1bn for the five listed UK banks in 2014E; (ii) one-off transitional costs of £1.5-2.5bn; (iii) negative GDP impact of 0.04-0.1%; (iv) reduced tax receipts of £150-400mn (this assumes all bank costs are passed onto the consumer); and (v) a reduction in the value of the government’s shareholdings in RBS and Lloyds Banking Group in the range of £2bn to £5bn relative to a ‘do nothing’ baseline scenario (compares to current value of £45.1bn).

If banks don't respect the fence, regulators will be able to break them up. Photograph: Getty Images
Getty
Show Hide image

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.