Chuka Umunna made a speech about ethnic diversity in business. Photo: Getty
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Chuka Umunna announces a review into ethnic diversity in British business leadership

If Labour gets in, Lord Davies will lead a review into ethnic diversity in British business leadership, as he did for gender diversity.

During a speech at the KPMG Asian Festival Dinner tonight, the shadow business secretary Chuka Umunna announced that, if Labour makes it to government in 2015, the peer Mervyn Davies will lead a review into ethnic diversity in British business leadership, as he did for gender diversity.

Here's the full text:

The British Dream: Making aspiration a reality

Can I thank KPMG for hosting us tonight and for inviting me to speak. I know that, in this room tonight, there are some amazing stories that could be told – of business success against the odds, of supportive families and communities, of hard graft, of grit and determination. It is great to be celebrating the success of Asian business and Asian businesspeople in Britain.

I myself draw on the inspiration of my own father and his story.  He arrived at Liverpool docks from Nigeria – as a young man with only the suitcase he was carrying.

He borrowed the train fare from a complete stranger to make it here to London where he was to lodge with friends. But his head was full of dreams and his heart full of ambition.

He worked all the hours, he trained, did his business qualifications at night school, and eventually built a successful import-export business, creating a comfortable life for his wife and children.

His story, the stories in this room – these are powerful examples. But they are more than stories of individual success. They are part of the folk memory that proves what is possible – examples that can drive our communities to future success.

We are living in a world of profound and rapid change, driven by technology and the reshaping of the global economy as power moves south and east to India, China, Africa and beyond.

To succeed as a country, we need to harness the opportunities this brings and keep alive for all our people what I call the “British Dream” - the idea that if you work hard, play by the rules and do the right thing, you can make it. 

Because when we waste talent and ideas, we deny opportunity. But we also damage ourselves. We are - quite literally – poorer for it as a nation.

Of course it takes personal ambition, fortitude and perseverance to succeed. But when I look around my communities in Streatham, Brixton and Clapham, it is not a lack of these personal qualities I see.

The problem is that the starting line is not drawn straight, the hurdles are not all the same height, the road for some is rough and steep shaped by the circumstances into which they were born, not their underlying potential.

There’s a lot of talk about ‘aspiration’. But you know as well as I do that such talk can be cheap. For the talk to mean anything, it needs to have some grit: it needs to challenge the power of those who are standing in the way of aspiration. 

It has to make a difference to the barriers that are holding people back. Otherwise it’s just talk. To stand aside is to stand on the side of those who are already winning. If we want to see more high-growth companies like those in this room, then we have to open up closed circles of power which prevent them from succeeding.

Take finance. When the banks won’t lend to small businesses - that is a barrier to aspiration.

That is why we have promised to end the cosy cartel where all banks give you the same answer and tell you: “the computer says no”. Here I make no apology for standing on the side of aspiration.

We need more competition in banking. We need more competition to banking.

We need more – and more diverse – sources of patient, counter-cyclical finance.

This is behind our plans for a proper British Investment Bank and a network of regional banks.

These are problems that predate the financial crisis – structural problems that need structural solutions. 

Politicians have a tendency to disagree too vehemently and agree too reluctantly, so I want to say tonight that I am pleased this government followed on from the work of the previous Labour government and recognised the significant opportunity the expansion of the UK’s Islamic finance market represents to UK firms.

Another barrier to aspiration is blue tape – the administrative burdens large firms place on their supply chains. When a big firm doesn’t pay a supplier on time, that’s not fair. It makes the business environment that bit harder. It is a barrier to aspiration.

This is not about big firms versus small – our success is mutually dependent and the relationship between the two is symbiotic.

But in business, as in life, we all succeed when we all succeed – to do this means fair rules, fair markets and fair play.

That’s why we’re pushing through a change to the law which would ensure that any business paid late would automatically be paid interest.

This shifts the burden away from the supplier and removes the incentive for the customer to pay late.

Bigger firms would also have to report and publish quarterly, like a VAT return, when they’ve paid late which will bring greater transparency and pressure to bear.

It’s not just about money. It’s about skills too. Real support for aspiration means ensuring every young person has a pathway to success, whatever route they choose.

The last Labour Government focused on getting 50 per cent of young people into university.

This transformed opportunities for young people in my constituency, where the numbers going into higher education increased by 81 per cent. 

Now the priority for the next Labour Government will be to do the same for vocational education.

It will be to create a clear route – from gold standard vocational education in schools and colleges to apprenticeships and new Technical Degrees. 

We must end the snobbery that says that the vocational and technical is not as important as the academic. 

For this, we must change the situation in which fewer than one in ten employers offer apprenticeships.

It must become the new normal. So the goal – as Ed Miliband set out – is that by 2025 there will be as many young people doing high-quality apprenticeships as go to university.

This is how we help people to meet their aspirations and dreams.

By building an economy of well-paid jobs, and training people so that they can seize the opportunities.

A high-wage, high-skill economy, where we win in global markets because of the quality of our goods and services. 

But to do this, we must remain open for business.

And that means being outward looking to the world.

Engaged in Europe, working to make it more growth focused, not heading to the exit door – which would be disastrous. Europe is our largest market, but it is also the gateway to emerging market economies, where demand is set to explode.

We have a four-decade long trade deficit we need to reverse. I am clear we are best placed to do this being part of the EU. 

Trading also means making more of our diaspora communities – think about the amazing links here in this room to growing Asian markets.

As a nation, I am clear our diversity is a huge source of strength that we should do more to develop, support and celebrate in the current political climate.

But it is a shame that under this government, the obstinacy of the Home Office on visas has done huge damage to our growing businesses – and to our seventh largest export industry: our world class universities.

When we give the impression we are closed for business, we close our minds to a world of possibility.

Finally, realising aspiration means boardrooms in Britain that look like Britain.

We cannot carry on with the situation where half of all FTSE 100 companies do not have a single non-white director and just one in 15 management positions is filled by people of colour.

This is not just a problem for large corporations, it is a problem for British business as a whole.

When they tell me it’s a problem of the talent pipeline, I’ll tell them about the people in this room.

It’s a fixable problem, and it is a problem we will fix. 

That’s why I’m pleased to announce tonight that if we win in May next year, Lord Mervyn Davies has agreed to lead a review into ethnic diversity in British business leadership – to do the same for ethnic diversity as he did for gender diversity because we need the same scale of change.   

There’s so much to celebrate here in this room tonight, and we do.

But I also feel the sense that, for all the success, there is so much more that needs to be done and which we could all do.

So I want to conclude with an ask: many business people tell me of their dismay at the lack of understanding amongst young people of what it is you do, what it is like to run a business, to be an engineer. 

So my ask to all of you is, to the extent you are not already, get into our schools and tell your story. 

That is one way you can make a difference and we are looking at how to strengthen the links between all our schools and our businesses, with that purpose in mind. 

It is only, after all, by working together that we can realise opportunity for everyone.

Thank you.

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The Autumn Statement proved it – we need a real alternative to austerity, now

Theresa May’s Tories have missed their chance to rescue the British economy.

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

 

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

 

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

 

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

 

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump