Perfect arse

Life offers joys to appreciate. For instance, only the other day, a gentleman wearing a Star Wars St

Dear readers, allow me to announce that I have actually finished a short story. After weeks of nonsense, distractions, train trips and psychotic breaks I really, truly did manage to cobble together enough minutes to put one word after another for 22 of your earth pages and there it is – probably ugly and deeply flawed, but a story nonetheless.

In many ways, in fact, quite a dandy fortnight has just passed. I now have so much work to do that I can no longer consider considering any of it and have passed into a state of Zen-like calm - unless I’m running on caffeine, in which case, all my twitches and ticks kick in and I may also weep without noticing which adversely affects my hydration. (And it may be significant that the words “psychotic break” immediately suggest a delightful type of holiday, rather than something mentally catastrophic.)

Be that as it may, life offers joys to appreciate. For instance, only the other day, a gentleman wearing a Star Wars Storm trooper mask showed me his bottom. He had mentioned it was exceptional and, in response to what may have been my mildly quizzical expression, took it upon himself to prove that indeed it was – pert, witty, unblemished, debonair and hairless – all one could ask of an arse. So a pleasant 68 seconds there and a chance to reflect on the fact that meeting the public is always enriching.

More comedy last week – had a grand time testing out new material for the Edinburgh Fringe show in August – and enjoyed again the relatively new Wicked Wenches tradition of taking tea backstage at The Stand in Edinburgh. Once a month, comics and staff gather together around a table furnished with an embroidered cloth, china, varieties of tea, home-made and hypoallergenic cakes, dainties and wildflowers. Every now and then someone leaves to go onstage and talk about genitals, dysfunction, relationships, hellmouths and so forth – before returning to nibble a fairy cake or straighten a doily. A great idea there from Julia Cloughley-Sousa and I cannot emphasise enough how delightful it is to experience a few hours of civilisation in one’s workplace. I would heartily recommend that you try your own variation on the theme – perhaps with a tasteful display of quality buttocks added on public holidays. Or whatever works for you.

My final meetings with this year’s students at Warwick University have also now passed. And what do you say to young people who are trotting (or just ambling, in some cases) off in hopes of becoming professional writers ? Obviously, a part of you does want to simply scream, “DEAR GOD NO ! TURN BACK NOW ! BECOME A POLE DANCER ! SELL YOUR ORGANS ! ANYTHING ! IT’S HIDEOUS ! NO ONE WILL RESPECT YOU FOR IT – STRANGERS WON’T EVEN BELIEVE YOU WHEN YOU TELL THEM WHAT YOU DO ! AND WORKING FOR THE THEATRE, OR TV, OR FILM…? THAT’S LIKE RIPPING YOUR OWN HEART OUT, PARING IT INTO FLAKES WITH A HOT CHISEL AND THEN THROWING THE RESULTANT MESS DOWN A WELL. YOU’LL END UP BOSS-EYED, TWISTED, TICKING, SURROUNDED BY PALS YOU MADE UP EARLIER, SHATTERED RELATIONSHIPS AND CRUDE DRAWINGS OF THINGS YOU’D LIKE TO DO WHEN THE NURSES REMOVE YOUR RESTRAINTS.

But instead you smile, perhaps mention eating more fruit, self-maintenance, plans, hope – because the only thing worse than doing the thing you really love would be not doing it. And when it’s good it really is about as good as it gets – making dreams and wonders – not the worst job in the world.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation