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Commons confidential: Anne McIntosh’s big gamble

The dumped Tory MP for Thirsk is hosting a party in September in London’s Hippodrome Casino.

Scotland is already a separate country in the eyes of Qataris. On a trip to the natural-gas-powered Gulf monarchy to report on the exploitation of migrant workers mainly from developing countries such as India and Nepal, I spied a workforce listed at a construction site in the capital, Doha. Next to 80 workers named as being from the UK were three from Scotland.

Should the 2022 World Cup kick off in the conservative state, I’d advise female footie fans to pack a wedding certificate. In the Building and Wood Workers’ International delegation was Ellie Reeves. The Labour NEC member was stopped by a police officer as she strolled along the Corniche in the group. The copper demanded to know if she was married to any of the men present: three officials from the Ucatt construction union and the Labour MPs Stephen Hepburn and Chris Williamson. The union’s chief politico, Jim Kennedy, stepped forward to play the role of the gallant Sir Walter Raleigh by pretending that Reeves was his wife for the duration of the walk. Reeves, married to the MP John Cryer, is a feminist but recognised that argument is futile in a dictatorship if you want to catch a flight home later in the day. 

Keeps nasty company, David Cameron. It was brought to my attention that the PM rubbed shoulders with a Nazi apologist during a Brussels gathering of his party’s far-right allies. With the chief Con at the meeting of the European Conservatives and Reformists Group was the MEP Roberts Zile of Latvia’s For Fatherland and Freedom party, an organisation that every year honours Nazi SS veterans. I bet Cameron kept quiet about the association on his recent flying visit to Israel.

A Liberal Democrat leaflet popped through your correspondent’s letter box. It positioned Clegg’s Yellow Peril as the champion of “ordinary working people”. With Cameron’s Conservatives posing as representatives of “hard-working people”, is there a gap in the market for Miliband’s Labour? I’ve long felt “reluctantly working people” are ignored politically.

Is Anne McIntosh under starter’s orders to save her Thirsk seat? The dumped MP, deselected by a North Yorkshire hunting set rallying behind another Old Etonian chap, is hosting a party in September. The “save the date” invitation misdirected my way reveals that the venue is the Hippodrome Casino in London. The choice is peculiar for someone the Public Whip website judges is “against permissiveness” on gambling after a study of her voting record. Intriguing.

I hear there was a kerfuffle at the TUC women’s conference. The Ucatt political officer Kate Purcell was unceremoniously bundled out of the room after holding up a large, home-made message requesting that the chair, Prospect’s Sue Ferns, persuade her lecturer other half not to do a Tristram Hunt by crossing university picket lines. Nothing sisterly in the strong-arm reaction to the doughty Ms Purcell’s protest.

 

Editor's note: This column mistakenly referred to Jeremy Hunt crossing picket lines, this has been corrected to Tristram Hunt. (7th April 2014).

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 10 April 2014 issue of the New Statesman, Tech Issue

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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