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I wanted to believe in Jeremy Corbyn. But I can't believe in Seumas Milne

The Labour leader's appointment of Seumas Milne is a disaster, argues Oliver Bullough. 

I wish Jeremy Corbyn well, I really do. I sincerely hope he shunts important issues – renationalisation, fairness, tax justice – onto the political mainline where they belong. I was even thinking of getting involved with his revitalised Labour Party. But then he appointed Seumas Milne to direct the party’s strategy and communications.

Milne is by all accounts lovely. As comment editor from 2001 until 2007, he oversaw a comment section that was vibrant to a fault. It’s not him, or his newspaper that’s the problem (full disclosure: I write for the Guardian from time to time myself, and am a paid-up “supporter”); it’s what he thinks.

I specialise in the ex-USSR, where I lived for six years. I’ve written two books about Russia, as well as articles and radio documentaries. I’ve travelled to all but four of the countries of the old Warsaw Pact. I know it pretty well, in short. And yet, when I read what Milne writes about it, I slip into a parallel universe.

Take Ukraine. Ukrainians overthrew President Viktor Yanukovich last year, after snipers killed dozens of protesters. When they broke into his palace, they found treasures upon treasures – icons, carved ivory, Picasso ceramics, ancient books – piled up in the garage. He’d had nowhere to put them.

It was pure people power: the street reclaiming democracy from a thuggish kleptocrat. There was plenty for the leftist Milne to cheer here, right? Wrong. And then Ukraine’s larger neighbour took advantage of the revolutionary government’s weakness to annex its southern province. That’s something for Milne to disapprove of, right? Wrong again.

“The crisis in Ukraine is a product of the disastrous Versailles-style break-up of the Soviet Union in the early 1990s,” he told his readers on March 5. “The US and its allies have since relentlessly expanded NATO up to Russia's borders… it is hardly surprising that Russia has acted to stop the more strategically sensitive and neuralgic Ukraine falling decisively into the western camp.”

 “Putin’s absorption of Crimea and support for the rebellion in eastern Ukraine is clearly defensive,” he wrote, a couple of months later.

Now, you can quibble with the facts. The destruction of the USSR was not some Versailles-style treaty imposed from outside. Russia, Ukraine and Belarus did it themselves, despite opposition from Washington. You can point out that NATO (thanks to Norway) had had a border with Russia for four decades by the early 1990s. And you can suggest that annexing part of a neighbouring country is not a “defensive” step by any conceivable definition.

But really, that’s not important. What’s important is something that’s missing altogether -- the recognition that this wasn’t anything to do with NATO or Vladimir Putin at all. This was an uprising by Ukrainians keen to improve their lives. If Milne wanted to criticise the West, there was plenty of material: Yanukovich’s palace, the one with a Picasso vase in the garage, was owned via a UK shell company, for starters. But Milne appears to have had no interest in the hopes, aspirations or dreams of individual Ukrainians, or in actual instances of Westerners enabling Yanukovich’s beastliness. This, you see, was all about us, and all about NATO.

Eastern Europeans think their countries voted as democracies to join NATO, as is their sovereign right, but that doesn’t wash with Seumas. He thinks this is an aggressive expansion, seemingly against the wishes of the countries involved. “NATO’s hawks have got the bit between their teeth.”

For Milne, geopolitics is more important than people. Whatever crisis strikes the world, the West’s to blame. Why did a group of psychopaths attack a magazine and a supermarket in Paris? “Without the war waged by western powers, including France, to bring to heel and reoccupy the Arab and Muslim world, last week’s attacks clearly couldn’t have taken place”.

Why did Anders Breivik slaughter 77 people? “What is most striking is how closely he mirrors the ideas and fixations of transatlantic conservatives.”

Why did two maniacs in London decapitate an off-duty soldier? “They are the predicted consequence of an avalanche of violence unleashed by the US, Britain and others.”

Milne’s geopolitics spared us having to read how the children of Beslan or the theatregoers of Moscow only had themselves to blame, but office workers in New York had no such luck. “Recognition of why people might have been driven to carry out such atrocities, sacrificing their own lives in the process - or why the United States is hated with such bitterness, not only in Arab and Muslim countries, but across the developing world - seems almost entirely absent.”

And this rampant victim blaming is not an approach confined to current affairs. His geopolitical preferences extend into history too, where he fiercely opposes any suggestion that Stalin’s Soviet Union was as bad as Hitler’s Germany. He has been caricatured as a Stalinist as a result, something that appears to irritate some of his once-and-future Guardian colleagues (he is on leave from the paper). I got into a Twitter debate with Zoe Williams yesterday, in which she pointed out: “he's written reams about the crimes of Stalin”.

He has indeed, but he has written about them in the manner of a Brit acknowledging the Amritsar massacre, before pointing out how much worse off India would be without trains. A particularly telling Milne moment came in 2006, when the Council of Europe’s parliamentary assembly voted to condemn “the massive human rights violations committed by totalitarian communist regimes”. In the article he wrote in response, Milne admitted the USSR executed 799,455 people, then moved on.

“For all its brutalities and failures, communism in the Soviet Union, eastern Europe and elsewhere delivered rapid industrialisation, mass education, job security and huge advances in social and gender equality,” he insisted.

Now, you can quibble with the facts. Focussing only on the USSR’s executions ignores the millions it starved to death in Ukraine, or in the mass deportations from the Caucasus and Crimea, the way it used rape as a weapon, or that fact it invaded without provocation half a dozen countries. You can also question those “huge advances” considering the fact that life expectancy in the USSR peaked in 1962, then declined steadily as chronic alcoholism took hold. But more important for me was the fact that this sentence reminded me of something I’d read before.

In Politics and the English Language, Orwell conjured up a “comfortable English professor” who wants to defend totalitarianism, but can’t bring himself to admit killing people gets results. “While freely conceding that the Soviet regime exhibits certain features which the humanitarian may be inclined to deplore… the rigours which the Russian people have been called upon to undergo have been amply justified in the sphere of concrete achievement,” Orwell’s fictional professor writes.

Almost exactly 60 years had passed between Orwell’s essay and Milne’s humbug but, in the world of supposed leftists who think politics is more important than people, not much appears to have changed.

I wanted to believe in Jeremy Corbyn’s Labour Party, I really did. But, with the elevation of this man, that chance has gone.

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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