Is Andy Coulson a "Tory liability"?

David Cameron's right-hand man is not fit for high office.

From today's Commons culture, media and sport committee report on "press standards":

We have seen no evidence that Andy Coulson knew that phone-hacking was taking place. However, that such hacking took place reveals a serious management failure for which as editor he bore ultimate responsibility, and we believe that he was correct to accept this and resign . . .

The newspaper's enquiries were far from "full" or "rigorous", as we -- and the PCC -- had been assured. Throughout our inquiry, too, we have been struck by the collective amnesia afflicting witnesses from the News of the World . . .

In seeking to discover precisely who knew what among the staff of the News of the World we have questioned a number of present and former executives of News International. Throughout we have repeatedly encountered an unwillingness to provide the detailed information that we sought, claims of ignorance or lack of recall, and deliberate obfuscation. We strongly condemn this behaviour which reinforces the widely held impression that the press generally regard themselves as unaccountable and that News International in particular has sought to conceal the truth about what really occurred.

From an east London employment tribunal verdict in November 2009, via the Guardian:

The tribunal found in December 2008 that Driscoll had fallen victim to "a consistent pattern of bullying behaviour". "The original source of the hostility towards the claimant [Driscoll] was Mr Coulson, the editor; although other senior managers either took their lead from Mr Coulson and continued with his motivation after Mr Coulson's departure; or shared his views themselves. Mr Coulson did not attend the tribunal to explain why he wanted the claimant dismissed."

So has Andy Coulson become a "Tory liability", as Alastair Campbell argues over at the Guardian's Comment Is Free? I think so -- and I pity the "Garden Room Girls" at Downing Street who'll have to work under him if the Tories win on 6 May.

Meanwhile, the sanctimonious bloggers on the right, who moaned and complained about Campbell, New Labour "spin", Damian McBride, Derek Draper, "Bullygate", blah, blah, blah, have remained largely silent on Coulson and co. Shame on them all.

Does any doubt remain that the residents of the Tory blogosphere take their marching orders from CCHQ?

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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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