Labour MPs divide over whether to boycott the Thatcher tribute or hijack it

Former minister John Healey says "this will not be the occasion or opportunity" to criticise Thatcher's record but David Winnick says it would be "absolutely hypocritical" not to.

Ahead of today's special Parliamentary tribute to Margaret Thatcher, Ed Miliband has been encouraging Labour MPs to return from their constituencies in order to ensure the party is well represented at the occasion. There is, however, no formal requirement for backbenchers to attend and several have publicly announced that they intend to stay away.

In an article for PoliticsHome, former minister John Healey writes that David Cameron is "wrong to recall Parliament" and that Thatcher's death "could and should have been marked when the Commons returns next week." Healey, like other Labour MPs, is angered at the attempt by Thatcher's supporters to present her as a figure above and beyond party politics. He notes that Parliament has only been recalled 25 times since the Second World War and only once to pay tribute "to a truly national figure, the Queen Mother". Thatcher's legacy, he writes, is "too bitter" to merit such treatement. "I will play no part and I will stay away, with other things to do at home in the constituency."

Other Labour MPs who intend to remain on holiday or in their constituencies, include Ronnie Campbell, a former miner and MP for Blyth Valley, and John Mann, who has said he doesn't understand why "taxpayers' money" should be wasted on an additional session when it could be "properly done on Monday". Campbell said: "I have got better things to do in the office here, looking after the interests of the people of Blyth Valley than listening to people singing her praises. Some MPs might think it is their duty to be there — I certainly do not. Her legacy here was the destruction of thousands of jobs."

But while the Labour leadership wants as many as MPs as possible to attend (the site of empty opposition benches would be uncomfortable for Miliband) , it has made it clear that it would rather they stay away than use the occasion to attack Thatcher's time in office. As Healey rightly notes in his piece, the event is officially described as a "special session in which tributes will be paid"; it is not a debate on her record.  He adds: 

This will not be the occasion or opportunity to debate the closure of the coal industry, the squandering of North Sea oil revenues to cover the cost of tax cuts, the ‘big bang’ deregulation of banking, the £17 billion privatisation of public housing or the deep social divisions as a legacy of her period as Prime Minister.

For the same reason, George Galloway, who tweeted "may she burn in the hellfires" following the news of Thatcher's death, will boycott the occasion. Asked if he would be attending, Galloway said: "I understand it is not a debate, so no. If it were a debate about the legacy of Margaret Thatcher I would be first in the queue for prayers. It is a state-organised eulogy."

However, at least one Labour MP has announced that, if called by the Speaker, he will criticise Thatcher's record. David Winnick told the Guardian: "It would be absolutely hypocritical if those of us who were opposed at the time to what occurred – the mass unemployment, the poverty – were to remain silent when the house is debating her life. This will be an opportunity to speak frankly." Miliband, who is wary of Labour being seen to attack Thatcher just 48 hours after the news of her death, will hope that few choose to follow his lead. 

Margaret Thatcher attends the State Opening of Parliament in 2010. Photograph: Getty Images.

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