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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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

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

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