Lord Ahmed accused of blaming Jewish media owners for his prison sentence

Labour suspends peer after he is alleged to have blamed Jews "who own newspapers and TV channels" for his conviction for dangerous driving.

 

Update 2: Ed Miliband has now responded to the story. Interviewed by ITV News, he said: "The comments reported by Lord Ahmed are disgraceful comments, there's no place for anti-Semitism in the Labour Party and frankly anybody who makes those kind of comments cannot be a Labour lord or a Labour member of parliament." 

That last point ("a Labour member of parliament") could be read as a reference to the Lib Dems' handling of David Ward. Ward accused "the Jews" of "inflicting atrocities on Palestinians … on a daily basis" but was not suspended from the party. 

Update: Labour has now suspended Ahmed pending an investigation. A party spokesman said: "The Labour Party deplores and does not tolerate any sort of racism or anti-semitism. Following reports in the Times today we are suspending Lord Ahmed pending an investigation."

At the time of writing, Lord Ahmed is still a Labour peer but, if today's reports are accurate, it is hard to see him remaining one. The Times writes that Ahmed blamed his prison sentence for dangerous driving on pressure placed on the courts by Jews "who own newspapers and TV channels". He said: 

My case became more critical because I went to Gaza to support Palestinians. My Jewish friends who own newspapers and TV channels opposed this. 

Ahmed is also accused of claiming that the judge who jailed him for 12 weeks was appointed to the High Court after helping a "Jewish colleague" of Tony Blair's during an "important case". The quotes are taken from an Urdu-language TV interview Ahmed gave in Pakistan in April last year. The peer, who was ennobled by Blair in 1998, has said that he has "no recollection" of giving the interview. "I've done a lot of interviews. If you're saying that you have seen this footage then it may be so but I need to see the footage and I need to consult with my solicitors before I make any comments in relation to this

Labour has responded to the story by stating that it "deplores and does not tolerate any sort of racism or anti-Semitism" and that "it will be seeking to clarify these remarks as soon as possible". It previously suspended Ahmed from the party after he was alleged to have offered a £10m bounty for the capture of Barack Obama and George Bush. It later revoked the suspension after the peer's actual comments emerged. He said: "Even if I have to beg I am willing to raise and offer £10m so that George W Bush and Tony Blair can be brought to the International Court of Justice on war crimes charges".

It is notable that Ahmed has denied the latest allegations less vociferously than on that occasion. In response to the "bounty" claims, he said that he was "shocked and horrified that this whole story could be just made up of lies". With Ed Miliband already under pressure to withdraw the whip from Ahmed, the party is likely to act swiftly to establish the facts. 

 

Labour peer Lord Ahmed, who became Britain's first male Muslim peer when he was ennobled by Tony Blair in 1998.

George Eaton is political editor of the New Statesman.

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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