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Government should explore other banking options

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Chancellor Alistair Darling announced banking shake-up this week

The Government should create community banks rather than just adding to the number of existing high street outlets, according to green campaigners.

Chancellor Alistair Darling this week announced plans to sell off the profitable parts of banks it nationalised last year during the credit crunch.

The assets of the Royal Bank of Scotland, Northern Rock and Lloyds Banking Group will be offered as three new-look high street banks to increase competition and choice in the industry.

This will see the resurrection of the TSB after a 15 year absence from our high streets since being bought by Lloyds, the return of Williams & Glyn, which operated in the 1970s and 1980s before being swallowed by RBS, and a new Bank & Co created out of the good parts of Northern Rock.

Existing banking groups will be barred from buying the new outlets as part of the move to encourage competition and bring in foreign investors.

Mr Darling presented this in the House of Commons on Tuesday as Prime Minister Gordon Brown fulfilling his promise to pay back the billions of pounds of taxpayers’ money used to bail out banks facing collapse last year.

But the Kent Green Party wants the Government to create community banks instead of simply adding to the existing options on our high streets.

They see non profit-making trusts as the best way of providing low-cost finance under strict Government control to stabilise the banking industry, which would also allow more loans to be made to families struggling during the recession.

Dr Hazel Dawe, chair of the Kent Green Party and Tonbridge resident, said: “Banks should be regulated to get rid of bonuses.

“The Government sell-off of parts of its stake in RBS, Northern Rock, and Lloyds, should be used as an opportunity to create community banks.

“These should be democratically accountable non profit-making trusts which would be able to provide low-cost finance at both district and regional levels.

“Any operating surplus arising from these community banks would be re-invested in their local communities.

“Promoting and supporting credit unions and micro-credit schemes in which small groups of people co-operate to provide guaranteed small loans to each other would increase access to loans as well.”

*The award-winning Charity Bank, based in Tonbridge, uses the savings of people and organisations to give affordable loans to charities and social enterprises across Britain, but particularly in Kent.

Founded in 2002 this has grown rapidly with a balance sheet now in excess of £60 million and is the world’s first registered general charity as well as an authorised bank.

It has invested in the arts, sustainable development and recycling, drug and alcohol rehabilitation, as well as faith projects.

The Charity Bank was recently named Employer and Innovation awards at the KOS Media £1 million Business Challenge, and will benefit from more than £100,000 of marketing next year.

The bank, based in Tonbridge High Street, this week launched a new ethical savings account to support recession-hit charities and social enterprises.

The Community Bond has been created to encourage people to invest their money in charities, as this sector has faced a slow-down in grant funding and a drop in income from legacies and donations.

Malcolm Hayday, chief executive of the Charity Bank, said: “The Community Bond offers savers a safe, secure and transparent way to use their money to invest for good.

“It’s a great alternative for people who might need to tighten their belts but who don’t want to reduce their support for charity.

“And unlike a donation which once spent, is gone, we can loan the money out again and again while it remains with us.”

POSTED: 08/11/2009 15:00:00

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