A major national bank is closing its branch in my village. No doubt they will say there wasn’t enough business. Perhaps that’s because a couple of years ago it decided to close my branch on Wednesdays and Thursdays. Traders who need to deposit cash every day took their business away and the downward spiral was achieved.
The people responsible for this decision have probably never heard of my village. On a wider scale, what do the big national banks know of small and medium sized businesses (SMEs) in the north asking for loans? It’s unlikely they have the knowledge about the regional economy to make good judgments. The huge central and international banks are not fit for the purpose of helping our SMEs. Net lending by banks participating in the government’s Funding for Lending Scheme, fell by £2.4bn in the last quarter of 2012.
So in this week when the Chancellor has grabbed the headlines with his Budget, let’s give a cheer to Ed Miliband’s proposal for regional banks. Labour would give their backing to regional banks in Yorkshire and the North West. The model would be based on the German system where local banks performed far better in the recession than the country’s large banks. The Sparkassen (regional banks) ran up less debt and avoided ruinous high risk investment. As a result, while lending by big German banks fell by 10% between 2006 and 2011, the Sparkassen increased lending by 17%.
The purpose of this policy proposal is to rebalance the British economy and the concept of basing it on a regional footprint is a sound one. Labour has yet to be persuaded to restore regional development agencies or a council of the North but at least this provides financial backing over a larger footprint than the Local Enterprise Partnerships that many feel cover areas that are too small to be effective.
The Hannah Mitchell Society which is campaigning for Northern Regional government welcomed Mr Miliband’s move calling it creative and radical.
LEEDS AND MANCHESTER STAR AT MIPIM
Both cities used their time well at MIPIM. The international property market held in Cannes is an important gathering for local councils whatever the Taxpayers Alliance might say.
Leeds told delegates about the increased co-operation with Bradford and Wakefield, learning some of the lessons of the Greater Manchester Combined Authority. The city region is reported to be worth £54bn.
Despite shrinking workforces and cuts in budgets, councils like Leeds are often the largest landowner, biggest capital spender and the highways and planning authority. MIPIM was told about the Trinity Leeds shopping development opening this year and work getting underway in June on the Sovereign Street office block. Bruce Springsteen is to be the first major band to play the Leeds Arena in July. Considering what the MEN Arena did for Manchester, and the ACC Arena being acknowledged as one of the major legacy benefits of Liverpool’s Capital of Culture; this should be a major boost for the West Yorkshire economy.
Meanwhile there was much interest at MIPIM about Manchester’s acquisition of Stansted Airport. The conference was told of ambitions to get passenger flow through the twenty million mark. Manchester Airport is approaching that now and its all still owned by the ten local authorities of Greater Manchester.