Osborne should nationalise RBS, but he won't

Cabinet ministers are reportedly pushing for the full nationalisation of RBS.

Back in the halcyon days of May 2010, George Osborne probably hoped to use the government's RBS shares as the basis for a pre-election giveaway. Now, he'd be lucky not to make a loss. Based on current trading conditions, the Treasury has already conceded that the chances of a sale of taxpayers’ shares before 2015 are "virtually nil". Indeed, so much has changed that the government is now considering the reverse: buying more shares in RBS.

Today's FT reports that senior government figures are discussing the possibility of "fully nationalising" the bank amid frustration at the paucity of lending to British businesses. Acquiring the 18 per cent of RBS that it does not already own would allow the government to direct the bank to increase its lending to companies without fear of legal challenge from the remaining private shareholders. One official tells the paper: "This is a conversation that takes place all the time."

Though he is not named in the report, it's safe to assume that Vince Cable is one of those leading the charge. It was the Business Secretary who recently accused the banks of "throttling the recovery" by failing to lend to small businesses and who called for part of RBS to be converted into a National Investment Bank. But Osborne, the man who voted against the nationalisation of Northern Rock, is unsurprisingly opposed. In a statement, the Treasury said:

We are committed to repairing and returning RBS to full health so that it is able to support the UK economy in the future, and the current strategy is working to achieve that. The government’s policy has always been to return RBS to the private sector, but only when it delivers value for money for the taxpayer.

With the economy now in a deep recession, the nationalisation of RBS is exactly the sort of game-changer the government should pursue. But Osborne's ideological preference for the private sector will, one suspects, again prevent a necessary step towards recovery.

Update: My colleague Rafael Behr suggests another reason why Osborne is opposed to nationalisation: "Nowhere to hide in bonus season when it is 'state bank' paying out."

Cabinet ministers are discussing the possibility of taking full control of RBS. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why Barack Obama was right to release Chelsea Manning

A Presidential act of mercy is good for Manning, but also for the US.

In early 2010, a young US military intelligence analyst on an army base near Baghdad slipped a Lady Gaga CD into a computer and sang along to the music. In fact, the soldier's apparently upbeat mood hid two facts. 

First, the soldier later known as Chelsea Manning was completely alienated from army culture, and the callous way she believed it treated civilians in Iraq. And second, she was quietly erasing the music on her CDs and replacing it with files holding explosive military data, which she would release to the world via Wikileaks. 

To some, Manning is a free speech hero. To others, she is a traitor. President Barack Obama’s decision to commute her 35-year sentence before leaving office has been blasted as “outrageous” by leading Republican Paul Ryan. Other Republican critics argue Obama is rewarding an act that endangered the lives of soldiers and intelligence operatives while giving ammunition to Russia. 

They have a point. Liberals banging the drum against Russia’s leak offensive during the US election cannot simultaneously argue leaks are inherently good. 

But even if you think Manning was deeply misguided in her use of Lady Gaga CDs, there are strong reasons why we should celebrate her release. 

1. She was not judged on the public interest

Manning was motivated by what she believed to be human rights abuses in Iraq, but her public interest defence has never been tested. 

The leaks were undoubtedly of public interest. As Manning said in the podcast she recorded with Amnesty International: “When we made mistakes, planning operations, innocent people died.” 

Thanks to Manning’s leak, we also know about the Vatican hiding sex abuse scandals in Ireland, plus the UK promising to protect US interests during the Chilcot Inquiry. 

In countries such as Germany, Canada and Denmark, whistle blowers in sensitive areas can use a public interest defence. In the US, however, such a defence does not exist – meaning it is impossible for Manning to legally argue her actions were in the public good. 

2. She was deemed worse than rapists and murderers

Her sentence was out of proportion to her crime. Compare her 35-year sentence to that received by William Millay, a young police officer, also in 2013. Caught in the act of trying to sell classified documents to someone he believed was a Russian intelligence officer, he was given 16 years

According to Amnesty International: “Manning’s sentence was much longer than other members of the military convicted of charges such as murder, rape and war crimes, as well as any others who were convicted of leaking classified materials to the public.”

3. Her time in jail was particularly miserable 

Manning’s conditions in jail do nothing to dispel the idea she has been treated extraordinarily harshly. When initially placed in solitary confinement, she needed permission to do anything in her cell, even walking around to exercise. 

When she requested treatment for her gender dysphoria, the military prison’s initial response was a blanket refusal – despite the fact many civilian prisons accept the idea that trans inmates are entitled to hormones. Manning has attempted suicide several times. She finally received permission to receive gender transition surgery in 2016 after a hunger strike

4. Julian Assange can stop acting like a martyr

Internationally, Manning’s continued incarceration was likely to do more harm than good. She has said she is sorry “for hurting the US”. Her worldwide following has turned her into an icon of US hypocrisy on free speech.

Then there's the fact Wikileaks said its founder Julian Assange would agree to be extradited to the US if Manning was released. Now that Manning is months away from freedom, his excuses for staying in the Equadorian London Embassy to avoid Swedish rape allegations are somewhat feebler.  

As for the President - under whose watch Manning was prosecuted - he may be leaving his office with his legacy in peril, but with one stroke of his pen, he has changed a life. Manning, now 29, could have expected to leave prison in her late 50s. Instead, she'll be free before her 30th birthday. And perhaps the Equadorian ambassador will finally get his room back. 

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.