Copies of the Leveson report. Photo: Getty Images
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Laurie Penny on phone hacking: the British press must not be allowed to be unchanged by the hacking scandal

In the aftermath of the Leveson report, journalism has changed forever - but it's not because of the inquiry.

The British press is about to change for ever but that’s no thanks to the Leveson report. After another round of back-room, minute-less meetings between ministers and managing editors, it has become clear that the bland tome of equivocation and suggestion that was the ultimate result of a media and parliamentary corruption scandal that nearly brought down the UK government is going to make almost no difference. An alternative draft bill has been published by Hacked Off, a pressure group representing “victims of press abuse”. The term describes a group distinct from the vast majority of us who have to live in a country where “shirker” has become a political cLaurieategory.

Hacked Off’s report is hardly a radical document. It merely suggests that the recommendations of the Leveson inquiry be implemented in full, rather than politely ignored. In 2013, the Murdoch media empire continues to profit from the muckraking, misogyny and celebrity-gossip dross that it uses to buy and sell electoral influence to the highest bidder; Jeremy Hunt is still in the cabinet and David Cameron remains Prime Minister. Meanwhile, Jonnie Marbles went to jail for throwing a plate of shaving foam at an aged media baron and I’m beginning to suspect that he might have had the right idea all along. This was our Watergate and the political establishment has been allowed to wipe its hands on its trousers and walk away.

Revolving door

That’s how privilege works in Britain – privilege in the true sense of the word, meaning “private law”. The poor get exemplary sentences and riot police smash their skulls in Parliament Square for daring to question austerity; the rich get inquiries and polite suggestions that need not be heeded. One law for them, another for the rest of us. The Leveson report focuses its attention on the failures of the press but the problem was never that the press had too much power. The problem was that it had the wrong sort of power, concentrated in too few hands.

The problem wasn’t just phone-hacking, nor simply a plague of shark-eyed, underfed tabloid hacks going through celebrities’ bins for gossip and half-eaten sandwiches. Phonehacking simply provided a focus for challen - ging a media corporatocracy that has forgotten that the first rule of news journalism is to speak truth to power, not to offer power a free pony ride and a weekend in the country.

The problem was and remains a political class that sees itself as the patron and occasional confidant of a media industry whose services can be bought with cash and favours; the problem was and remains the revolving door of access and privilege between the press, the police and the upper echelons of government. Corruption, in other words. Corruption in plain sight, circumventing the mechanisms of democracy, of law and order and of journalism and thereby making a mockery of all three. The political class has decided to solve this problem by allowing the Prime Minister – a man whose integrity and career are at the centre of the scandal – to decide unilaterally what changes to the law should be made, if any. If anyone else sees a problem with this, please shout now.

Cameron has said that he won’t implement any part of Lord Justice Leveson’s recommendations that he deems “bonkers”. He has explicitly rejected a suggestion that the report deems “essential”: that of writing press regulation into law, or “statutory underpinning”. It is bonkers, of course – you’d have to be a fruit loop or a government shill to believe that placing more restrictions on the press will do anything to cure a political culture already poisoned by overfamiliarity between the media and the mechanisms of state. It’s bonkers, but Cameron – Rebekah Brooks’s riding partner and Andy Coulson’s former boss – is the last person who should get to say so.

Good journalism is as necessary as ever. In the current crises of capitalism and civil society, we need more press freedom, not less. We need journalists, both professionals and citizen amateurs, to inform, to analyse and to explain; to investigate corruption and to articulate political trends. The newspaper industry is losing the capacity or volition to provide this service, as celebrity fluff and cheap comment fill the dwindling space in between the advertising, revenue from which is predicted to drop by 9 per cent in 2013 alone. Fortunately, the end of newspapers does not mean the end of news. The Leveson inquiry may have devoted only a few lines to dismissing digital journalism but the unfolding history of cultural production already tells a different story.

The future is now

In a recent report published by the Tow Centre, Post-Industrial Journalism, C W Anderson, Clay Shirky and Emily Bell explain that the model of advertiser-subsidised print newspapers creating and delivering autho - ritative political information is defunct. Attempting to legislate on it – and on a halfhearted, parochial scale, at that – is rather like trying to legislate on the proper wheel size for horse-drawn carriages six months before the opening of the Ford factory.

The only good thing about the Leveson report is that it has had almost no impact on how the many committed, ethical journalists I know do their jobs. More and more are reaching beyond the mainstream, building networks that destroy the old hierarchies and opening new doors for publication, investigation and dialogue with what Anderson, Bell and Shirky call “the people formerly known as the audience”. The delicate ecosystem of the British press has become contaminated by corruption, poisoned by privilege and sterilised by a failure to adapt. Now, all the many-eyed mutant things that have grown up breathing this foul air are crawling out of the shallows – and they are hungry.

The failure of the Leveson report exposes the true irrelevance of the old mainstream media in speaking truth to power, but the future of journalism is already here. In the words of William Gibson, it’s just not evenly distributed yet.

 

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

This article first appeared in the 14 January 2013 issue of the New Statesman, Dinosaurs vs modernisers

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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