Ukip MEPs are failing to engage with the political process. Photo: Getty
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The frustrating reality of having Ukip represent the UK’s interests in Europe

I’m afraid to say we made the wrong choice as Ukip are beginning to prove time and time again their insignificance in Europe. 

The European Parliament took a vote of confidence today on the newly appointed Commission of Jean Claude Juncker. The vote, triggered by the Luxleaks tax avoidance revelations, was called by the EFDD group in the Parliament of which Ukip makes up a majority. The vote failed by 461 votes to 101 and Nigel Farage didn’t even turn up.

The Luxleaks scandal is very worrying – under Juncker's watch as Prime Minister, it looks like Luxembourg arranged at least 300 secret deals with multi-national companies to help them avoid tax – and he must be held to account for this. But Ukip’s moves should be seen for what they really are: another futile heckling tactic which is more about grabbing the headlines than real action

May 22 2014, the day that Ukip won the European elections, I’m afraid to say we made the wrong choice as Ukip are beginning to prove time and time again their insignificance in Europe. I understand the frustration with the traditional three main parties who offer little more than different shades of business as usual, but a vote for Ukip is a vote for empty gesture politics.

As revealed earlier this year, Ukip MEPs are failing to engage with the political process as usually they don’t bother to show up and, when they do, they can often be found heckling and shouting abuse across the chamber.

This may not be such a scandal if they weren't gaining such huge benefits from being our main representation in Europe – but the scary part is that they receive millions of pounds each year in salaries and funding for their group in the parliament. That was why Ukip were so panicked last month when their EFDD group nearly collapsed; they would have lost an estimated £1m. They did manage to save their group in the end – but only by welcoming an MEP into their group who has been labelled a racist and a holocaust denier.

It is becoming increasingly clear that Ukip MEPs aren’t the right people to represent our interests in Europe. On most key issues you would be hard pushed to quote any Ukip achievements. For example, 80 per cent of environmental legislation in the UK comes from the EU – most of it providing many benefits to the environment, but more often than not Ukip MEPs have opposed such moves. Many of our workplace and social protections also come from Europe, again, no thanks to work done by Ukip.

The vote of confidence in team Juncker may be a successful attempt by Ukip to position themselves as the anti-establishment party in the media, but as Owen Jones pointed out this week, this couldn’t be further from the truth. Ukip are the embodiment of corporate interests and they really don’t care about cracking down on tax avoidance.

Are Ukip prepared to take on the powerful vested interests in the City? And are they prepared to consider supporting Green proposals on tackling the scourge of tax evasion including enforcement of existing tax legislation and increased transparency including a minimum rate for corporation tax.

Based on their behaviour so far in Europe, I wouldn’t hold my breath in waiting for them.

On these issues, my Green colleagues and I have been leading the way. And in response to the Luxleaks issue we have developed a proposal to take concrete action. We are calling for the establishment of a committee to carry out a robust inquiry into tax evasion and dumping, not just related to Juncker, but across the EU and beyond.

Sacking the entire Commission irrespective of each individuals’ involvement in the scandal may hit the headlines, but it would do nothing to tackle the deeper issue of tax avoidance which has plagued the EU for far too long.

Keith Taylor is the Green MEP for South East England

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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