Osborne thinks we're a Mac. We're a PC

Our banks don't have a reset button.

I had a Mac well before they were cool. It was fine when it worked, but occasionally it would throw a hissy fit and leave me utterly helpless. Apple clearly knew full-well their machines were prone to problems. Their universal solution was to include a reset button, accessible by forcing a paperclip into a tiny hole on the side of the machine, which would override everything and restart the machine, wiping all your work in the process.

The problems with my Mac were so persistent that I used to keep a paperclip permanently blu-tacked to it.

But of course, Macs are perfect these days, and Apple is unassailable – the kind of business most companies could only dream of becoming.

And at the other end of the scale are the banks. They keep stalling. Every now and then they make worrying noises, and after five years on hold, the Help Desk (John Vickers), says it’s really about time we got a new one.

When George Osborne told us that 2013 would be the year “we reset our banking system”, I couldn’t help but imagine him walking around the impenetrable edifice of the Bank of England wielding a giant paperclip, trying to find the hole. Horrified city workers looking on, saying “I hope I’m not going to lose all my work”.

Yesterday he announced that he wanted to open up the UK banking market to increased competition. No doubt he sees Virgin Money and Metro Bank leading a charge of bright young banks, who will hit the high street with branches that look like the set of Big Brother and staff who look like the cast of Hollyoaks… All very “I’m a Mac”.

I’m sure, or at least I hope, that Osborne knows there is no easy-reach reset button, and no “turn-it-off-and-on-again” fix. I know it’s boring (don’t fall asleep), but the decision to increase competition in the UK banking system is not political or regulatory… It is about IT – it’s about enabling new companies to plug into the payments system.

And trust me, the payments system is not a shiny Mac with handy firewire ports. Our payments infrastructure makes Windows XP look cool. It’s a tangled, home-made mess that looks like the inside of Jackson Pollock’s brain. What forward-thinking, tieless entrepreneur would want to plug into that? Even in these straightened times, there are easier ways of making money, let’s be honest.

The fact is that Metro Bank, which provides customers with free dog biscuits in their branches, is the first new entrant into the UK retail banking industry for over 150 years. They have less than 20 branches, none north of Watford, and there aren’t many behind them in the queue for banking licences. Mobile phone companies are moving into financial services, for sure. But most of them struggle to keep our voicemails secure, and I’m not sure people are ready to let them look after their hard-earned cash.

Has he tried turning it off then turning it on again? Photograph:Getty Images

James Ratcliff is Group Editor of  Cards and Payments at VRL Financial News.

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Beware Tory Brexiteers trying to wreck EU negotiations

It is not in the interests of either moderate Tories or the opposition to let them. 

Our government has promised the United Kingdom the exact same benefits when it leaves the European Union that we have enjoyed while in. 

In the words of David Davis, Brexit secretary, the government’s plan is “a comprehensive free-trade agreement and a comprehensive customs agreement that will deliver the exact same benefits as we have".

The negotiations that lie ahead are unprecedented and will be difficult and complex. It’s unlikely a deal will be reached in two years that can guarantee what Davis has promised - and what Labour holds the government to account on, as outlined this week by my colleague Sir Keir Stamer. But reaching a deal we must. It would be economic and political idiocy not to.

We know that those on the EU’s side of negotiations are not willing to negotiate on trade or customs without first making a deal on the Irish border, treatment of EU nationals in the UK and UK nationals in the EU, and money owed. If these are not agreed to, we will have no deal at all.

In precise terms, a leaked letter from the European Parliament said the UK should pay all its liabilities “arising from outstanding commitments as well as make provision for off-balance sheet items, contingent liabilities and other financial costs that arise directly as a result of its withdrawal”.

It added that without a withdrawal agreement on citizens’ rights, the financial settlement and the border in Ireland, the UK “would exit automatically the union on 30 March 2019 and this in a disorderly manner”.

Brussels estimates the bill to be around €60bn. Aside from the fact we will need to pay (or be open to negotiating some of the bill) as a prerequisite for future negotiations, it is the right approach to take. These are liabilities stemming from obligations that our country has made. It would not be right to renege on them simply because we do not want to pay. And, if we want a co-operative relationship in the future, we must be reasonable and willing to negotiate now.

Yet there is a small cohort of Conservative MPs that are saying just that.

Tory MP Bernard Jenkin's response on the potential of failing to reach a trade deal? “If they want us to pay too much for that, we say no, that’s okay, we’ll pay the tariffs." He laster added that we “won’t have to pay a penny if we don’t want to”. Earlier this month, when asked about the prospect of paying our bills, Foreign secretary Boris Johnson responded: “I think we have illustrious precedent in this matter: I think you can recall the 1984 Fontainebleau summit in which Mrs Thatcher said she wanted her money back and I think that is exactly what we will get.”

This is not a party political matter. Former Tory frontbencher Nicky Morgan  has said there are some members of her party who seem to want to pick a fight with the EU and not strike a very positive tone.

This negative tone is the least of our worries. There are legitimate fears in many corners of Westminster that a small group of Conservative MPs are trying to highjack the EU negotiations, get a number of newspapers on side, and refuse to pay a penny with the specified goal of crashing of the negotiations and bouncing Britain onto World Trade Organisation rules.

We know this would be devastating for our economy, for jobs, and for investment. Failing to reach a deal would be bad for everyone, but particularly for the UK.

True enough, Davis has acknowledged that the UK should pay something, but that the amount is open to negotiation.

The Prime Minister must stand up strongly to a small group of her own party’s backbenchers, who are actively trying to disrupt her efforts to negotiate with the EU.

Catherine West is the Labour MP for Hornsey and Wood Green.