Green heart of Hawick

Jonathan Dawson makes a trip to an environmental fair in Hawick and explains a recent paradigm shift

Green Heart of Hawick
I spent the weekend down at Hawick, a picturesque town in the Scottish Borders. The event was an environmental fair and conference called Green Heart of Hawick, put on by the irrepressibly enthusiastic Michael Shallis and his team.

The fair had everything, from films (including Al Gore’s "An Convenient Truth" and the wonderful "Power of Community" about Cuba’s response to its peak oil crisis), talks from a variety of speakers and exhibitions of local initiatives such as eco-schools, tree-planting programmes, compost making, local food schemes, allotments and the like.

It is tempting at times to despair at how few basic skills we have retained in our communities as the economy has globalised, but in reality, fairs like this demonstrate that the great British art of amateur tinkering has kept alive many older and more traditional ways of doing things. As if to reinforce the point, towards the end of Saturday afternoon, the town’s streets filled with an army of mounted riders, tracing the boundaries of the town’s lands on horseback in an annual practice that dates back to the 15th century.

I was there by kind invitation to talk about how to build and nurture local economies and how Hawick might go about creating its own transition town initiative. I have referred to transition towns in several previous blogs; these are community-led initiatives that embrace the reality of energy descent as fossil fuels run down as an opportunity to create more convivial and resilient communities.

So why, you might ask, was I advocating on behalf of transition towns rather than ecovillages? Why was I not trying to persuade the citizens of Hawick to model themselves on Findhorn?

Track back to February of this year, the most recent Board meeting of GEN – the Global Ecovillage Network – at the Los Angeles Ecovillage. There, a coin that has been wobbling on the edge for some time fell finally and firmly into the slot of our collective understanding.

This new understanding is reflected in the GEN Manifesto that emerged from that meeting. One section of the manifesto concludes: ‘…it may be of value for us to see today’s ecovillages less as ends in themselves and more as research, demonstration and training centres for sustainable community initiatives in conventional towns and villages worldwide’.

This is a substantial and significant shift in perspective. No longer, it suggests, is the good society that we promote to be created primarily by way of replication of the ecovillage model. Rather, the core purpose of these distinctive, charming, but somewhat artificial communities is to act as laboratories for the development of sustainability models of all kinds that can be scaled up into more conventional communities.

This insight comes to me as a breath of relief. The extent of Findhorn’s distinctiveness cannot be overstated. How on earth would one go about replicating such a unique model – especially given the growth in land prices and tightening of planning regulations over recent decades?

Just as we are coming to recognise that greening Britain’s housing stock will be primarily about intelligent retrofitting rather than new-build, so the building of a more healthy and resilient society needs to happen in existing communities like Hawick.

Jonathan Dawson is a sustainability educator based at the Findhorn Foundation in Scotland. He is seeking to weave some of the wisdom accrued in 20 years of working in Africa into more sustainable and joyful ways of living here in Europe. Jonathan is also a gardener and a story-teller and is President of the Global Ecovillage Network.
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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