Memo to Fleet Street: it isn't just the BBC that makes mistakes

Before excoriating the BBC, the papers should recall their own recent errors.

As the feeding frenzy against the BBC continues, it’s worth remembering the UK’s public broadcaster isn’t the only organisation to sometimes make editorial mistakes. There isn’t a major national newspaper that hasn’t made serious false allegations against someone or other. Indeed, unlike in some of the examples below, the BBC at least had the good sense not to name the person it wrongly suspected of a crime, though it was naïve to think the name would not get out eventually.

Yet the BBC is attracting far more venom than any other news organisation would if it had made similar mistakes. Before Fleet Street gets too carried away with attacks on the corporation, it might want to remind itself of its similar screw-ups. As far as I know, there were no calls for "radical structural change" at any of the papers as a result of any of the following mistakes:

The Sun pins the Norwegian mass shooting on ‘Islamists’

Before we knew who had shot 77 Norwegian young people on 22 July 2011, the Sun had a guess: Islamists. Its front page referred to an ‘"al Qaeda’ massacre" while its editorial used the attacks to have a go at asylum seekers and human rights law. The paper quietly changed the editorial on its web edition when it emerged the massacre had been carried out by right-wing fanatic Anders Breivik.

The Telegraph accuses Labour conference of heckling an 11-year-old child

During this year’s Labour conference a delegate interrupted a 16-year-old explaining to the hall what she liked about the academy school she attended. The delegate had shouted out of turn: “you can do that in a comprehensive too”. On the Telegraph’s site this somehow became the Labour conference ’heckling’ an ‘11-year-old’ ‘child’, an accusation which grew into a Twitter-storm, only ending after Ed Miliband issued a statement. The paper later toned down the inaccuracies in the piece on its website but the web address for the article still reads "it-is-disgusting-for-a-labour-delegate-to-heckle-an-11-year-old-girl/" and refers to a "child".

The Guardian jumps to conclusions during the phone hacking scandal

One shocking detail of the Guardian’s investigation into phone-hacking that captured the public’s imagination was the allegation that someone working for the News of the World had deleted murdered schoolgirl Milly Dowler’s voicemails. The voicemails’ disappearance had given "hope" she was alive, the parents said. But police investigations later found no evidence to support this claim, which arguably had propelled the story to new heights. The police said the messages were "most likely" deleted automatically by the phone network after 72 hours.

The Independent wrongly accuses a politician of taking $150m from a foreign autocrat

Accusing a politician of illegally accepting $150m from a foreign autocrat to fund a political campaign is a serious claim, and the Independent accused Rachid Ghannouchi, the leader of a Tunisian political party, of doing just this. Had the allegation been made against a UK politician it would have been one of the biggest political scandals in the UK’s history, but the story passed relatively unnoticed here. Last month the paper admitted that what it said had happened had not happened, and published a small apology.

The Daily Mirror wrongly accuses Chris Jefferies of associating with paedophiles and being linked to a murder

Searching for a suspect in the murder of Joanna Yeates, the Daily Mirror and other papers settled on retired schoolmaster Christopher Jefferies. The paper accused Jefferies, who was Yeates’ landlord, of "behaving inappropriately" to schoolchildren, associating with paedophiles and being linked to a previous murder. None of this turned out to be true.

The Daily Mail wrongly accuses teacher of leading a riot which trashed Tory HQ

In the aftermath of a riot at Conservative party headquarters the Daily Mail fingered Luke Cooper, a university tutor from Brighton, as a "hardcore" organiser of the riot, which led to over 50 arrests and tens of thousands of pounds worth of damage. The Mail’s sister paper, the Evening Standard, splashed the allegations on its front page. Nearly two years later, the papers’ publisher was ordered by the High Court to pay £450,000 in costs and £60,000 in damages to Cooper, who says his reputation in education was "trashed".

The Times invents radical Islamist “control” of a North London mosque

The Queen’s Road mosque in Walthamstow is under “control” of the “ultra-Orthodox” Islamist sect Tablighi Jamaat, making it "easy prey for terrorist recruiters", the Times alleged in 2009, casting suspicion over an entire community. After being contacted by the leader of the Mosque, and some lawyers, the paper later conceded that this was not true, but not after suggesting the Mosque was a "breeding ground" for "extremists".

Billboards outside the News International buildings in Wapping advertise the Sun. Photograph: Getty Images.

Jon Stone is a political journalist. He tweets as @joncstone.

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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