“Red Ed”? Not quite.

Where is the radical candidate who came from behind to win the crown?

Of all the slogans, catchphrases, soundbites and propaganda lines emanating from this Conservative-led coalition government, nothing grates more than George Osborne's High School Musical-inspired "We're all in this together". We're not. The Treasury's own table makes that clear. So, too, does the Institute for Fiscal Studies.

As we approach the end of the year, a time of soothsaying and prophesying, let me make one simple prediction: at the end of this parliament, and as a direct result of this government's policies, the gap between rich and poor will have widened; the rich will be richer and the poor will be poorer. The housing benefit "reforms" are just the tip of the iceberg.

And a new report revealing how FTSE-100 executives received a 55 per cent jump in pay over the past year makes me wonder how they are in this with the rest of us. "Austerity, what austerity?" is the headline over at politics.co.uk. Remember: these are the kinds of people who write letters to the Telegraph urging cuts to public services and fear-mongering about public-sector pensions. Shocking, eh?

But as Jim Pickard notes over at the FT Westminster Blog:

This is why I was frantically seeking political reaction yesterday to the report by Incomes Data Services, which is on our front page today. Criticism came obligingly from Vince Cable, union leaders and from Labour figures including John Denham (Kelvin Hopkins said it was a "moral outrage"). Although it's not quite clear that any of them have a magic bullet to solve the issue.

Ed Miliband's reaction? No comment whatsoever.

It's not as if this isn't a subject close to his heart, supposedly. During the summer he said salary differentials were far too wide – and called for Will Hutton's official review to be extended to the private sector.

So, Ed, where are you? Still running from the "Red" tag? Let's be clear. There is nothing "red" about objecting to reckless, irresponsible and unfair pay rises and telephone-number salaries. In fact, the public would be on your side if you did – polls show voters support a high pay commission and higher taxes on bonuses and object to the growing gap between rich and poor in modern Britain.

Saint Vince of Cable, the Business Secretary, became spectacularly popular in opposition not just because he could dance, but because he relentlessly attacked the excesses and greed of our financial elites. In government too, the sage of Twickenham has been quick to condemn the FTSE fat cats, describing the IDS report as "further evidence that it is time for executive pay to come back down to earth".

I'm amazed – and annoyed! – that Barack Obama over in the United States failed, in the words of Drew Westen, to stake out a "left populist" position on bonuses, pay and corporate excesses in the wake of the financial crisis. And now, the Republicans, fuelled by the popularity of the anti-establishment, right-populism of the Tea Party movement, are expected to retake the House of Representatives from the Democrats in next week's midterm elections.

So I do hope Ed Mili, who ran as an outsider, and to the left of the neoliberal "centre ground" where New Labour had camped out, will learn the lessons of Obama's counterproductive caution and conservatism about finance, bonuses and bailout-related issues. And, as Pickard concludes:

You can understand his determination to shed the Red Ed tag and try to position Labour as close to the centre ground as possible. But those who heard him during scores of summer hustings may now be confused about what he does stand for.

UPDATE:

Given some of the debate and disagreement on Twitter over this blog post, let me clarify a few points:

1) I am still a strong supporter Ed Miliband, who is by far the best, most progressive and inspiring of the three main party leaders. But – shock, horror! – I remain to the left of of "Not So Red" Ed.

2) I do think the left should hold centre-left leaders like Obama, Brown, Miliband, whoever, to account and not give them a pass. See the example of the right/centre right.

3) It is indeed rather boring to see lefties always cry "betrayal" when their leaders disappoint them, but, on the other hand, legitimate criticism of those leaders shouldn't instantly be dismissed, or misdescribed and/or ridiculed as screams of "betrayal". Geddit?

4) I am starting slightly to worry that Ed Mili may have made a rather cautious start to his leadership on the subject of cuts and high pay/bonuses/etc. I suspect that the coalition's fiscal policies will backfire on it and Labour will not be able to exploit the fallout if its own policies/approach/rhetoric are seen as not dissimilar by the public at large. (See Tories and Iraq; see Darling's cuts v Osborne's cuts during election campaign.)

5) Unlike Sunny Hundal and others, I don't think it is unreasonable to expect Ed Mili to come out loudly and passionately on FTSE pay rises today, given the centrality and importance of the High Pay Commission proposal to his victorious Labour leadership campaign only a few weeks ago.

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