Laurie Penny: I’ve turned 25, but the world won’t let me be a grown-up

We are old enough and ugly enough to build a better future for ourselves.

It happens without warning. At some point between the first time you hear an ironic remix of the cartoon theme tunes of your childhood and the expiration of your Young Person's Railcard, you wake up one morning and something has changed. Under the puppy fat and pimples, your face has begun to emerge, and so has your future. You have become, however inadvertently, an adult.

By the time I finish this column, I will be 25 years old. Growing up is always an odd process, but since I graduated from university, it has become more convoluted than usual. For many people my age -- including most of my friends -- secure, meaningful employment, marriage and home ownership all seem as distant and unimaginable as they were when we sat our GCSEs.

While we've been finding our first wrinkles and filling out our first dole forms, all the normal things that were supposed to make up for theuncomfortable position of suddenly having to take care of oneself have been confiscated by the forces of world finance. Little lifelines like the Future Jobs Fund and the Education Maintenance Allowance have been cut to save costs, just as university fees have been trebled by an administration happy to hand billions in subsidies to the investment banks that created the crisis.

The impetus behind this year's uprisings in Egypt has been partly ascribed to the frustration of young adults unable to afford the transition into work, marriage and independence.

It's tempting to frame all this as a generation war, an immense and predictable kick-off between the baby boomers, who enjoyed every benefit that the postwar consensus brought its fortunate children, and Generation Y, the ragtag, loosely defined group of late-cold-war babies who are old enough to have been promised a future of permanent growth and young enough to have been shafted when that future failed to emerge. This interpretation is madly convenient for many who would prefer not to engage with the realities of geopolitics. It is also wrong.

It is wrong because it allows the enormous crisis of capital and democracy sweeping Europe, the US and the Middle East to be reconfigured as an intercontinental temper tantrum. With a bit of imagination, it's easy to see all the strikes, protests, riots and revolutions accompanying the disintegration of late capitalism as merely the international equivalent of a bedroom door slammed in fury -- a worldwide whine of: "It's not fair!"

In fact, it's a little more complicated than that. Property, privilege and profit are not the sole preserve of the "power generation" now easing its way into precarious retirement.

Disaster capitalism

There are baby boomers who have lived all their lives in poverty, and baby boomers who were marching, striking and fighting against the numbing tide of disaster capitalism when today's activists were still in nappies; just as there are members of Generation Y who'd take a Jack Wills hoodie and a job at Goldman Sachs over global revolution any day.

Something larger and far more frightening is going on. The struggle going on across the world is not between old and young, but between the possessed and the dispossessed -- most of whom just happen, like 52 per cent of the world's population, to be under the age of 30.

Three years ago, I turned 22 just as the world's stock markets were tumbling. Watching the news, I realised, like so many other middle-class young people in the west, that the future we had been promised would not be delivered after all, at least not without a fight that would finish far too late.

For many of us, it is already too late. Denied the trappings of adulthood, we grew up anyway, into unemployment, anger and disillusion, into a world that didn't want us.

When I was 22, I was angry. Now that I've been 25 for a whole ten minutes, I'm still angry, but I'm also hopeful. All around me, and across the world, people are organising, educating themselves, building new, alternative communities, joining resistance movements, and starting to talk about the possibility of a future that our parents never expected.

Fed up with waiting for a better future to be delivered, we have realised that we are old enough and ugly enough to build one for ourselves. It's not a generation war -- but the power generation has every reason to be frightened.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

This article first appeared in the 03 October 2011 issue of the New Statesman, Which Tories is it ok to love?

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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