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close this bookThe Courier N° 158 - July - August 1996 - Dossier: Communication and the Media - Country Report: Cape Verde (EC Courier, 1996, 96 p.)
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Minority businesses in the UK

In no country in Europe are ethnic minorities more organised than in the United Kingdom - though they are still not adequately organised, in the opinion of many, to pool their considerable resources together and overcome stereotypes, racism and unenployment. But this may change if the morale engendered by a recent exhibition of minority businesses in the UK is anything to go by.

The statistics speak for themselves. There are 3.3 million Asians, Africans and Afro-Caribbeans in Britain, about 5% of the population (and the figure is projected to double in the next 25 years). They have six elected Members of Parliament - five Labour and one Conservative - as well as numerous personalities in the world of sports and the media. According to the 1994 Labour Force Survey, 48% of ethnic minorities are graduates or are in full time studies and 55% earn salaries well over &15 000 (ECU 18 000) annually. They have a combined gross annual income estimated at f42 billion and an annual spending power of at least f26 ten.

Over the past 15 years, ethnic minority-owned businesses have grown considerably. In the last two years alone, they were responsible for more than 30 000 new business concerns throughout the country, according to the Commission for Racial Equality (CRE). Although many are in the retail trade, the 10% or so involved in production or manufacturing are extremely dynamic, particularly those connected with the clothing industry or operating franchises.

There are considerable differences between Asians on the one hand and Africans and Afro-Caribbeans on the other. The former are more business oriented and account for well over 80% of all ethnic enterprises. This success in business is often attributed to Asians' industriousness, but there is another crucial and often neglected factor: Asians have a stronger sense of group solidarity and patronage than Africans and Afro-Caribbeans. Whereas the former spend virtually all their earnings within their community, the latter (who are mainly Christians and are known to make greater efforts at integration into the British society) spend theirs in the society at large.

Unemployment among the black population in general is 19% compared to 8% for whites (in London it is three times higher). They are much more likely to be turned down by employers even when they have better qualifications than their white counterparts. Often self-employment is the only way out. This explains why there has been a boom in business start-ups by ethnic minorities over the past two years.

Although several black profffsional associations have come into being in recent years, it has been clear for some time to black leaders that the community's energies are dispersed and that these needed to be harnessed for the benefit of ethnic minorities as a whole. Blacks clearly have political and business clout to be exploited.

The idea for an exhibition of black businesses in the United Kingdom was mooted by a black business couple who, were influenced by a similar event held annually in the United States called 'Black Expo USA'. But the impetus came from the 'Race for Opportunity Campaign' launched in October last year by the Conservative Government through the Department of Trade and Industry. The campaign has so far seen more than 20 big British companies pledge to do business with ethnic minority enterprises. These include British Airways, British Gas, British Telecom, British Aerospace and several high-street banks and finance houses.

Held at the Barbican Centre in London on 4 and 5 May, the exhibition was aimed at creating awareness among ethnic minorities of their potentialities, showing the opportunities available to them not only in the UK but also in Europe, and at promoting networking amongst their businessmen and women.

Cross-party support

The exhibition, which had a cross-party support, could not have come at a more favourable time. Both the Tory government and opposition Labour Party have expressed support for policies favourable to small and medium-sized enterprises, which means that there should be continuity in this area if Labour comes to power in the next general election.

This was borne out by the enthusiasm with which the shadow minister for small business, Mrs Barbara Roche greeted the exhibition. To her, the event should be seen in the context of Labour's overall policy on small businesses. Speaking at one of the seminars which was run alongside the exhibition to discuss various aspects of minority business problems, Mrs Roche explained that there were three important reasons why her party was promoting small enterprises, especially those involved in exports.

The first was that large companies were downsizing, and job-creation towards the end of this century and into the next would be largely by small and medium-sized enterprises. The second was that small businesses were efficient distributors of wealth and the third was that they were good at innovation and using new technologies.

Because a large number of small businesses are folding, or are struggling to survive in the UK today (often as a result of late payment of bills by large companies), Mrs Roche said a Labour government would introduce a statutory limit of 30 days for the settlement of bills by large companies. The latter would then have to pay interest to small businesses for any late payments. Ethnic minority businesses, she also said, were part and parcel of Labour's strategy for economic growth and jobs in Britain.

The Barbican exhibition attracted more than 80 exhibitors mainly in retailing, finance, telecommunications, consultancy, arts and crafts, publishing, electronics and education. There were very few exhibitors from the manufacturing sector (a disappointment considering the number of Asians in the clothing industry) and virtually none in engineering. Some of the big companies connected with the 'Race for Opportunity Campaign' like British Airways and British Gas, as well as the newly created government-backed Business Link, the Customs and Excise department, the Inland Revenue, the Army and the Metropolitan Police were there. Also present was Louis Farrakan's 'Nations of Islam', (not necessarily on a recruitment drive, though that must have been part of the game), but as a reminder of its campaign for greater self-reliance by the black community which culminated late last year in the 'Million-Man' march on Washington DC. Video tapes of the march and speeches by Farrakan and other black leaders in the United States were on sale.

Difficulties

The seminar run concurrently with the exhibition attracted many notable speakers, among them Members of Parliament, Keith Vaz, Bernie Grant and Barbara Roche and Commissioner Dr Zaka Khan of the Commission for Racial Equality. Jessie Boseman, vice-president of 'Black Expo USA, who was also scheduled to speak, did not turn up.

There was general agreement on the main factors inhibiting the growth of ethnic minority businesses, the most obvious being racism and discimination. Ethnic businesspeople not only have difficulties obtaining public contracts, but they are often denied access to finance, market and even premises. Furthermore, they suffer from lack of management skills, networks and feedback. Dr Khan of the Commission for Racial Equality highlighted mounting racist attacks, mostly against Asianowned shops, which have claimed a number of lives in recent years.

Integration into mainstream economy

It is no longer a hidden fact that banks discriminate against black businesses. Surveys carried out by the NatWest and Midland banks have confirmed that fact. The latter though, it must be acknowledged, has a laudable Fellowship Programme, designed to encourage ethnic minority university students to take up careers in the Midland Bank on graduation. Lack of access to the market has effectively meant that black businesses have been left out of the mainstream of the British economy. Everyone agreed that it makes good economic sense to see them integrated into it. This was particularly the position of both Barbara Roche and Zaka Khan. The question was: would it be possible?

Some of the issues raised on the floor by businesspeople revealed that many were sceptical that racism and discrimination could be overcome in multiracial Britain. The Commission for Racial Equality symbolises the fight against these two evils and Dr Khan had a hard time defending its role. The CRE was criticised for constantly quoting statistics on improvements in the living conditions of ethnic minorities which, it was argued, were totally removed from reality. Despite this, Dr Khan remained upbeat. To him the future promises great things for ethnic minorities. He promised to look into the grievances aired by some businespeopie during the seminar. Barbara Roche, for her part, promised that a Labour government would encourage the banks to offer packages of assistance to small enterprises, in particular, black-owned ones. They would also ensure that local councils offered minority enterprises a share of local government contracts.

Greater self-reliance and global trade

In view of the problems black businesspeople have had to contend with over the years, Bernie Grant, the Member of Parliament for Tottenham in North London, did not devote much time to the idea of integrating them into mainstream British economy. He felt that racism and discrimination were so prevalent that there was little chance of that happening. For him, the future for black businesspeople in Britain lay in greater self-reliance and entry into international trade.

In a speech entitled 'political responsibility, and black import and export business', the M.P. set the Barbican exhibition in the context of the global economic situation - one where he said, 'the countries of the North are exploiting those of the South, in particular African countries.' Africa's heavy debts to the West should in fact be the other way round. He argued that the new world trade agreement, which opens up the developing countries to competition, was unfair. 'This means that countries where minorities in the UK came from are going to have problems, and it is the duty of thee minorities to ensure that their countries have a fair deal,' he said. Mr Grant cited, by way of example, the EU's banana protocol under the Lomonvention which gives preferential treatment to small Caribbean island producers and which is currently being 'unfairly' challenged by South American producers under the WTO rules. The role of multinationals, which are effectively acting es 'middleman', was, he believed, pernicious for developing countries. There was a need for black businessmen to step in.

Minority enterprises in the UK do not exist in isolation from the rest of the world, he elaborated. They should seek to engage in international trade and take advantage of their connection with their countries of origin. To facilitate this, Mr Grant said that a group under his chairmanship had set up a Global Trade Centre in his constituency in North London with the aim of helping black and minority enterprises establish direct trade links with Africa, the Caribbean and black America. The Centre was already in contact with a number of African countries which have expressed interest in the idea. Such a link would not only ensure a better deal for African producers but also favour the growth of minority businesses across the world. This was, he confessed, 'a political agenda' designed to reduce the excessive profits of multinationals, if not put an end to their 'outright exploitation' of Africa and the Caribbean. Mrs Roche expressed support for the Centre for the role it could play in boosting British exports.

UK minorities and the
European Union

A self-confessed Eurosceptic, who would have preferred the UK to strengthen economic ties with the Commonwealth rather than with Europe, Mr Grant displayed an extraordinary understanding of the European

Union's affairs. What worried him most about greater European integration, he said, was racism and the fact the UK job market, where black and ethnic minorities are already heavily disadvantaged, will be exposed to further competition from other Europeans most of whom speak several languages. However, he had no alternative but to support the Labour Party's line on Europe and work to secure the best advantage of British membership for ethnic minorities. He contrasted Tory 'divisions' on Europe with Labour's 'united' policy and condemned the British Government's attitude generally towards the Union.

The development of the Union, Mr Grant said, was of great significance to black people. He was sure the Government's Immigration and Asylum bill, which had come up against strong opposition in the House of Lords, was aimed at harmonising immigration laws with other countries in the Union. The bill, if passed, will change the UK's visa regime and have serious implications for ethnic minorities and their businesses in Britain. He revealed that, with the support of ethnic minority members of the British Parliament, Bill Morris, the black General Secretary of the Transport and General Workers Union (the second biggest trade union in the UK) and other European trade union leaders, the Intergovernmental Conference was being lobbied for the inclusion of a stronger clause against racism in the Treaty of Rome. The aim, ultimately, is to see measures in line with the UK's laws against racism and discrimination enacted at the Union level. This would include the establishment of a European equivalent of the Commission for Racial Equality - with similar powers - so as to establish a level-playing field for ethnic minorities in competition for jobs and in business throughout Europe.

Augustin Oyowe