Anti-Englishness and the SNP

The nationalists have strong civic credentials. Why do unionists continue to accuse them of ethnic c

Over the course of the last few months, a number of high profile figures in Scottish and British public life have accused the SNP of ethnic chauvinism. First of all, in January, composer James MacMillan claimed the party drew on a "reservoir of anti-Englishness to power (its) secessionist agenda". Then, a few weeks later in an interview with the New Statesman, Scottish Labour leader Johann Lamont suggested Alex Salmond had a "problem" with David Cameron because he was English. And finally, the Sunday before last veteran Tory Eurosceptic John Redwood said he viewed nationalism in Scotland as an "anti-English movement (rather) than an independence movement".

The suspicion that Scottish nationalism harbours an ethnocentric tendency - or is in some sense fuelled by resentment of the English - has been a feature of mainstream British politics for a long time. This is largely due to the efforts of the Labour Party, which for years has enthusiastically promoted the idea that separatism is a form of extremism. For instance, in the mid-1990s, against a backdrop of ethnic conflict in the Balkans, George Robertson charged the SNP leadership with fomenting a "dangerous, crazy nationalist fringe" and warned against "the dark side of nationalism". More recently, following the election of the first nationalist government at Holyrood, a slew of senior Scottish Labour! politicians, including Ian Davidson, Jim McGovern and Anne Moffat, have tried to link the SNP, directly and indirectly, to "neo-fascism", anti-English "hatred" and Nazism.

However, according to Professor James Mitchell of Strathclyde University, these attacks are odds with the reality of contemporary nationalism. In his recent study, The Scottish National Party: Transition to Power, Mitchell argues that the party's understanding of national identity is perfectly consistent with the standards of 21st Century liberalism. He writes,the SNP is civic in the sense that its policies are among the most liberal of any party in the United Kingdom on citizenship, emigration and multiculturalism. Additionally, very few of its members would define Scottishness in exclusive ethnic terms. The SNP membership accep! ts a plurality of ways (being Scottish)." In other words, for the majority of SNP members, Scottishness is something an individual chooses, rather than something he or she has foisted on them by birth or through the bloodline.

So why do so many unionists persist in trying to tie the SNP to chauvinism? One explanation is that the concentration of the UK's media in the south-east of England means that many political journalists assume that any rejection of London is, as a matter of course, an expression of parochialism and insularity. This attitude is particularly prevalent among commentators associated with the Labour Party (see David Aaronovitch of the Times and John Lloyd of the Financial Times). But what they fail to grasp is that 'Celtic fringe' nationalism is not a rejection of London as such, but rather a rejection of a constitutional system which, until the advent of devolution, was far too heavily centralised. Indeed, viewed from this angle, the SNP, in its opposition to an unelected upper chamber and advocacy of popular conceptions of sovereignty, is among the most aggressively modern of all the UK's political parties.

Another explanation relates to the ferociously tribal nature of Scottish Labour. Almost as soon as the SNP emerged as a significant force in Scottish politics in the late 1960s and early 70s, Labour understood that its electoral dominance, which in the immediate post-war period had seemed insurmountable, faced a serious challenge. In particular, party chiefs recognised the potential appeal of the nationalists - who campaigned at the time on a platform of bringing the oil industry partly into public ownership, defending the upper Clyde ship yards and promoting workers cooperatives - to its working class base. This terrified them and, in an attempt to drive left leaning voters away from independence, they began to issue apocalyptic warnings about the dangers of separatism. These warnings grew increasingly stark in line with the collapse of Scottish conservatism, a pivotal event in Scottish political history which saw Labour transfer its traditional class lo! athing of the Tories to its new power rivals, the SNP.

Of course, the truly depressing thing about all this, not just for nationalists but for the Scottish people at large, is that now, with the SNP well into its second term of government and an independence referendum less than three years away, the chances of Scottish public debate becoming more civilised in the near future are pretty slim.

Scottish First Minister and SNP leader Alex Salmond. Photograph: Getty Images.

James Maxwell is a Scottish political journalist. He is based between Scotland and London.

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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