Labour voters should care about keeping sterling down

John Mills


Since the late 1970s, UK manufacturing has been in terminal decline. Successive governments, including Labour, have ignored our industrial base in favour of the service sector – especial financial services. In many cases, our leaders have washed their hands of the situation; watched while thousands of quality blue-collar jobs have disappeared and our industrial heartlands have become wastelands.

Ignoring manufacturing and industry in the UK has led to a situation whereby this country now has some of highest income inequality rates in the entire world. Households in the bottom 10 per cent of the population have on average a net income of £9,277. The top 10 per cent have average net incomes of £83,897 – that’s nine times higher. This is an unconscionable and appalling gap.

The situation has been made all the worse by a deliberate policy of ensuring we have the most overvalued currency in the world; a currency level that effectively prices this country out of the market. As foreign investors have flocked into the City of London to buy shares and properties – many of which stand empty – the value of Sterling has soared on the back of our dying industrial heritage.

The value of Sterling matters. And it should matter even more to Labour supporters. As it stands today, even with recent falls in the value of the pound, British-made goods are too expensive for overseas buyers. Everything from consumer electronics to clothes, machinery, vehicles, toys and home furnishings are all more expensive than equivalent products made abroad, especially in Asia. This means that there is little incentive – or available money – for current manufacturers to invest in new equipment and machinery; and even more worryingly, no profitable reason for young entrepreneurs to start the industrial businesses of the future.

The result of the EU Referendum was brought about largely by those Labour voters who could see very well the decline in their own communities brought about by government neglect. The recent falls in the pound have been one of the added positive benefits of leaving the EU. It means that it is now more competitive to start and build a manufacturing business. But we must do more.

The Labour Party is currently facing huge challenges of its own, but as a loyal member for more than 50 years, I know that the Party will weather this storm and survive, just as it has through many, many others.

But while it’s so easy to focus on internal matters, we must remember that there are people in the industrial areas of the UK that are depending on the Party to stand up for them and their interests. That means having a coherent economic policy; one that protects the most vulnerable in our society but is also seen by all as competent. In all this sound and fury, we must remember that it’s very hard to see Labour winning power again without a viable, powerful alternative economic vision – one that includes managing our exchange rate for the benefit of the many, not just the few.

I have been campaigning for a lower pound via The Pound Campaign for many years. We believe that we need an exchange rate about one third lower than it is right now and if we could achieve that, manufacturing would revive, the number of jobs would soar upwards, businesses and individuals would pay more taxes, the government would stop running up debts and living standards would rise again for everyone.

The Pound Campaign is planning to play a part in informing the future debate on how to optimise our exchange rate. There are many people out there, just like me, who believe that if we keep Sterling down to a realistic level today, we would all be much better off tomorrow.

John Mills is chairman of JML, a Labour donor and was chair of the Labour Leave campaign

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