Preview: Julian Barnes on Christopher Hitchens, David Cameron and Rupert Murdoch

The novelist gives a rare interview to Soumya Bhattacharya for the New Statesman Centenary Issue.

The Booker prize-winning author Julian Barnes has given a rare interview to Soumya Bhattacharya for the New Statesman centenary issue, out today, in which he shares his views on contemporary British politics and culture, recalls his time as a young literary editor on the New Statesman in the mid-to-late 1970s, and talks life, love and loss.

 

On Christopher Hitchens:

“He was the most brilliant talker I’ve met and the best argufier. At the Statesman he was largely gay, idly anti-Semitic and very left-wing. Then ripple-dissolve to someone who was twice married and had discovered himself to be Jewish and become a neocon. An odd progress, though he didn’t do the traditional shuffle to the right; he kept one left, liberal leg planted where it always had been and made a huge, corkscrewing leap with his right leg. I enjoyed his company but never entirely trusted him.”

On David Cameron and the Coalition Government:

“It seems perfectly possible that David Cameron will be remembered as the prime minister who ‘lost’ Scotland and took Britain out of Europe. But then, this is a government with rare powers: who thought you could manage to produce a fall in unemployment combined with a triple-dip recession?”

On culture in England:

“This has always been a comparatively philistine country [...] this has made the arts – and many artists – resilient and ingenious in the face of poverty.”

On Rupert Murdoch:

“Murdoch once sacked me when I was on the Sunday Times [...] I do believe in grudge-bearing [...] I think his effect on public life in this country has been malign.”

On death and euthanasia:

“I don’t want to be a nonagenarian waking up with broken ribs because I have been artificially resuscitated against my will.”

On the New Statesman, his first desk job in Fleet Street:

“I felt deep loyalty to the magazine and couldn’t believe my luck that I was working for it. There was even a ping-pong table in the basement.”

“They [Christopher Hitchens, James Fenton and Martin Amis] were very confident talkers. I was virtually mute in those days. I would sit through editorial conferences praying that Tony Howard [then editor] wouldn’t nod encouragingly in my direction.”

On Fleet Street in the 1970s:

“I found it a friendly and collegiate world, if over-male; and, yes, where you were going to drink was a daily subject of debate.”

To read the full interview, buy a copy of the New Statesman Centenary Issue, on sale now

Julian Barnes, photographed by Emma Hardy for the New Statesman.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

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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