Will the Ecuadorian embassy be stormed?

Litigation, and not broken glass, is the more likely consequence.

Last night the foreign minister of Ecuador warned that its London embassy was facing being “stormed” by the United Kingdom government. There had even been a threat in writing, it was claimed. This was a rather dramatic announcement, and it evoked images of SAS soldiers crashing through embassy windows to capture their cornered prey.

The reality seems to be more mundane. The UK government appears to have pointed out that it has the legal power to revoke the embassy status of the premises currently being used by the Ecuadorian embassy. (See Carl Gardner’s excellent post on the applicable law.) As such, this is merely a statement of what the law says. The UK government added that it does not want to use that power and hopes for an eventual compromise. Any threat is at best implicit, but it is hardly a brutal ultimatum.

And what would happen next is even less exciting.  As the UK government will be purporting to be exercising a statutory provision – in this case a power under the Diplomatic and Consular Premises Act 1987 – then any executive action is in principle amenable to the jurisdiction of the High Court for judicial review.  Here it would be Ecuador challenging the UK government in a case that would raise complex points of domestic and international public law.

Accordingly, there will not be breaking glass in Kensington but the prospect of months (or perhaps years) of highly expensive litigation, which will probably reach the Supreme Court. In reality, Ecuador should now be more concerned about lawyers’ bills than any special forces “storming” its embassy.  

All the same, it does appear to be unwise for the UK government to even suggest that the embassy status is at risk. Whilst it is correct that a premises not actually being properly used as an embassy should not have the same legal protection as premises that are being used for such a purpose, it is difficult to see how giving refuge even to someone facing allegations of rape and sexual assault and a valid arrest warrant (and who is also in breach of bail conditions) is by itself sufficient to say the embassy is being so entirely misused that the UK government can invoke the 1987 Act.  And, as a matter of Realpolitik, what the UK government does to embassies in London can also be done to its embassies abroad. 

Of course, this is just one aspect of a mutual exercise in smoke and mirrors by the UK and Ecuadorian governments.  The claim by the Ecuadorian foreign minister may be spin to cover an eventual backing-down, or a signal of a more defiant approach. There may already be a deal between the two countries.   There may be the granting of asylum status, or not.  But there is little new of substance behind the strident assertions of the Ecuadorian foreign minister: the UK government has always had a residual power which it can exercise subject to the High Court, and the Ecuador government has presumably always known this.

International law is important: embassies should be safe and only have their status revoked in exceptional circumstances. But valid European arrest warrants are also part of international law, and they bind the UK if not Ecuador.  The UK is currently in breach of its obligation to extradite Julian Assange to Sweden, just as Assange is in breach of his bail conditions.  In seeking to facilitate the extradition of Assange, the UK government is trying to uphold the law and not break it.

And so due process continues to be evaded, and the rights of the complainants of rape and sexual assault still remain frustrated. However, complainants of rape and sexual assault have rights too.  And the longer this matter drags out, the less chance of any justice in respect of the original allegations.  That is the real scandal.

 

David Allen Green is legal correspondent of the New Statesman

Metropolitan Police Officers not storming the Ecuadorian embassy. Photograph: Getty Images

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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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