The Lib Dems have replaced the Tories as Britain's least favourite party

New polling shows that 49% would not consider voting Lib Dem, compared to 43% who would not consider voting Conservative.

If you glanced at today's Sun you could be forgiven for thinking that UKIP had become not just Eastleigh but Britain's second party. "PM feels heat as UKIP support hits 38 per cent" reads the paper's attention-grabbing headline. But the stat turns out refer to the party's potential level of support, not its current level (12 per cent in today's YouGov poll). Asked whether they would consider voting for UKIP if it had "a realistic chance of actually winning in your local area", 38 per cent say they would, 10 per cent say they would "probably not" and 43 per cent say they would "definitely not". A separate question which asks whether people would consider voting for the party, regardless of its chances of success, found that 36 per cent would and 44 would not. 

The level of "considerers" is viewed by all parties as an important measure of their potential to expand their support, so how do the rest compare? It's Labour that comes out on top, with 46 per cent saying they would consider voting for the party and 35 per cent saying they would not. The party's large pool of potential voters is one reason why some Labour MPs (see Peter Hain's Staggers piece yesterday) are confident their party will be the largest after 2015. 

The Conservatives are in second place, with 40 per cent saying they would consider voting for the party. But worryingly for David Cameron, 43 per cent of all respondents say they would "definitely not" vote for the party. For a large section of the electorate, the Tories remain too toxic to touch. 

But it's the Lib Dems who are now Britain's least favourite party. Only 30 per cent would consider voting for them and 49 per cent would "definitely not". The finding contrasts with an earlier YouGov poll in September 2011 which found that 36 per cent would not consider voting Lib Dem, compared to 42 per cent who would not consider voting Tory. While the Lib Dems are often accused of retoxifying the Conservative brand, the poll reminds us that coalition government has been most toxic for them. 

Here are those figures in full. 

Labour

Actual support: 40%

Potential support: 46%

35% would "definitely not" vote for the party

Conservatives

Actual support: 31%

Potential support: 40%

43% would "definitely not" vote for the party

Liberal Democrats

Actual support: 12%

Potential support: 30%

49% would "definitely not" vote for the party

UKIP

Actual support: 12%

Potential support: 36%

44% would "definitely not" vote for the party

 

David Cameron and Nick Clegg attend a press conference at 10 Downing Street to mark the halfway point of the coalition government on January 7, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

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