Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.
Let’s hope, as the chancellor prepares his Mansion House speech on Wednesday evening, that he has already included brave words about the banks along the lines of “I know that the cuts I am announcing are in part the result of banking folly and greed. And so I am entirely with my colleague Vince Cable, who is even now preparing root-and-branch banking reform. We cannot have a public service cuts programme without the banks being equally painfully reformed.”
To help him in this decision, let’s also hope that some brave Treasury official slides across to him the following info from Britain’s small businesses.
Around a quarter of them are deeply fed up with the banks’ lack of business support, particularly credit availability. Nearly half of them don’t even have a local bank manager. Thousands of them have had to deal with not one, two or even three business managers at their bank in the past two years, but four or more.
Since the height of the crisis last year, the 213,000-strong Federation of Small Businesses has been polling its members monthly and collecting this kind of information. These are the people on whom local economies, and the national economy, depend. And the banking system treats them appallingly.
They are joined of course by the poor and the unbanked – its reckoned that 2 million people have no access to a bank account. The numbers of people falling into the hands of loan sharks (1,800% interest, threats thrown in for free) are already increasing.
Now, as George Osborne prepares to throw raw meat to the deficit hawks at the Mansion House, he cannot ignore the banks’ failure. He should not be contemplating cuts that will hurt the economy and individuals without announcing banking reform at the same time. Does he, or does he not, agree with his colleague Cable, who said in his first public speech in government two weeks ago that we have “a seriously dysfunctional banking system”?
Taking on the banks is absolutely crucial and there is a movement growing around it. The Future of Banking Commission yesterday called for regulation and separation of functions and – most importantly – transparency, so that we can see where and to whom banks lend. The Better Banking Coalition is powerfully arguing for real and fair help from banks – who will have to be forced to do it – for the unbanked and the less well off. The Post Bank Coalition, of which the new economics foundation is a member, wants a publicly owned local banking network based on the Post Office. It’s a popular and ingenious idea and bedrock small businesses want it.
The chancellor will be surrounded by the City, literally and metaphorically, at Mansion House tonight. That food on those exquisite plates will be hard to swallow if he does not announce painful banking and reform along with the cuts for the rest of us.