Can every Twitter user be expected to factcheck Newsnight?

As the Lord McAlpine case shows, at some point we have to trust news organisations to tell us the truth.

I’m sure everyone has reached saturation point on the Lord McAlpine affair – I know I have. However, the dozens of articles and opinions I have read seem to have missed a rather central point. It is this: the person talked about on Twitter as the subject of that Newsnight report, actually, was the person that was the subject of that Newsnight report.

Lord McAlpine’s lawyers make no distinction between people commenting on Twitter before or after the Newsnight report. This is crucial. Because from that point on, we are not talking about speculation. We are not talking about a celebrity or a journalist getting the wrong end of the stick and naming the wrong person.

We are talking about people accurately putting together the easy puzzle that Newsnight aired. To my mind, this relegates Lord McAlpine’s extraordinary attack on tens of thousands of ordinary social media users to the realm of ludicrous. Because what it says, very directly, is that one cannot comment on the news without independently verified sources of one’s own.

If I, as the man on the Clapham omnibus, cannot reasonably assume that the information passed to me by one of the most respected news programmes of one of the most respected news outlets is accurate, I am effectively gagged from commenting on it. Or anything reported anywhere.

The alternative is that each one of us is required to seek out and interview witnesses and make a personal assessment of whether we believe a story or not. This is a ridiculous notion. How do I find out about MPs' expenses (remember at the time of the expenses scandal they were not published). How do I confirm a Times report which says, “a document leaked to us says X”?

The BBC may have had unreliable sources and got their investigation wrong. But the thousands of people who commented on the matter had a source hitherto believed to be one of the most unimpeachable; the BBC.

There is such a thing as "a proportionate reaction". If there was any doubt that McAlpine had been accused in error, I would fully support his attempt to clear his name. But that is not the case here. The fact that he was unfairly accused has now been registered and publicised much more widely than the original accusation.

In the absence of any such denial, of any persisting rumour, of any permanent damage to his reputation, to threaten to sue tens of thousands of people for discussing an accusation made by the state broadcaster, seems to me to be either a nonsense or the continuation of a distateful historical trend; the law of defamation being used by those with vast resources in order to silence those with no such resources.

The law on this issue is not a settled matter, as many quasi-experts would have you believe. It is a constantly evolving precedent – especially when it comes to new technologies. Common sense plays a huge part in assessing where lines ought to be drawn.

By the time Phillip Schofield presented David Cameron with his infamous list on ITV the next morning, people commenting on the matter were supported by two sources; the BBC and ITV. At what point would Lord McAlpine’s lawyers suggest that it is acceptable for ordinary folks to discuss the news? In their search for lucrative settlements, they would, no doubt, suggest “never”.

I disagree. When a story is put out as news by an organisation holding itself out to be a reliable news source, the buck must stop there. Otherwise public debate is forever stifled.

The buck has to stop with the "trusted" news source. Photograph: Getty Images

Greek-born, Alex Andreou has a background in law and economics. He runs the Sturdy Beggars Theatre Company and blogs here You can find him on twitter @sturdyalex

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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