Harry Palmer reads the New Statesman

A quiz, your verdicts on the departure of Tony 'where did those weapons go' Blair plus news from the

Will you miss him? We'd like to hear your verdict on Blair. We've asked for the thoughts of people from the worlds of health, diplomacy, politics and much more to assess the past decade. Why not have a read and then add your comment?

We've also compiled a hilarious quiz entirely for your benefit so you can discover what sort of Blairite you are. Try it out by clicking here

Now a rather embarrassing confession. I'm reading a book by Len Deighton.

I've always rather liked the Harry Palmer films starring Michael Caine, particularly Funeral in Berlin. Anyway I came across a rather nice hardback edition of the Ipcress File at a National Trust house. Don't worry it was legally acquired, not snatched while my pregnant wife distracted an elderly steward...

Anyway I digress. At the start of Chapter 2 Palmer is walking down London's Charlotte Street towards Soho when he purchased "two packets of Gauloises, sank a quick grappa with Mario and Franco at the Terrazza, bought a Statesman, some Normandy butter and garlic sausage".

Now this got us thinking. The Ipcress File was first published in 1962 - easy to find out if you've got a first edition - so just what could HP have been reading about?

A quick email to walking New Statesman archive, rain expert and media guru Professor Brian Cathcart and we thought we'd worked it out...

To a spy the Vassall affair would have been particularly interesting. John Vassall was a gay civil servant who got photographed in some rather compromising situations with a Soviet citizen enabling the Russians to recruit him as a spy.

He then became a secretary to Tory minister Tam Galbraith which gave him access to all sorts of classified documents which he passed over to the USSR.

Eventually someone realised that Vassall had a rather high standard of living for his salary and it was a top news item for most of autumn 1962.

In a thundering editorial, Paul Johnson wrote about it in the 16 November edition of the NS.

In it Harold Macmillan is castigated by our former editor for regarding the "security chaos in the Admiralty as purely secondary to the political aspects of the affair".

But it can't have been the Vassall piece Palmer was reading. Nor could it have been the review of Ian Fleming's The Spy Who Loved me from the 11 May edition.

We know this because Deighton refers to Palmer's stroll down Charlotte Street taking place on "that sort of January morning that has enough sunshine to point up the dirt without raising the temperature".

So what could our spy have been reading? Was it Bertrand Russell's defence of unilateral disarmament in the letter pages? Or Johnson's profile of the Cold War Earl - foreign secretary Alexander Douglas-Home? A review of such titles as Lenin's Collected Works and Philosophy and Myth in Karl Marx? All were in the 5 January edition. Or perhaps an item on Soviet ideology in the 12 January edition?

Personally I think the clue is in some of the other items Palmer bought.

Deighton wants us to know Palmer is a sophisticate and the reference to the NS indicates that just as surely as the normandy butter shows he is a gourmet.

Ben Davies trained as a journalist after taking most of the 1990s off. Prior to joining the New Statesman he spent five years working as a politics reporter for the BBC News website. He lives in North London.
Getty
Show Hide image

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