The passing of Tony Benn a few months ago has lent itself to a retrospective look at the former MP’s life, work and views.
Back in the 1970s he had a very different persona compared to the ‘Conscience of the Nation’ father figure he turned into in his later years. Back then he was a left-wing firebrand who passionately believed in the nationalisation of industry, views which became highly unfashionable during the Thatcher and Blair years.
Most interestingly, he believed in the nationalisation of the banks, not on ideological grounds, but because he understood the importance of money and access to finance for the workings of society and for business in particular.
Benn recognised that money is like any other utility, a vital commodity which oils the wheels of industry in the same way as electricity, gas and water are vital parts of an industrial process.
If access to capital is denied it is equally as big a threat to production as when a water company shuts off the mains water supply to an abattoir or an electricity company switches off its supply to a car manufacturing plant. Which is, of course, exactly what happened during the recent recession when the banks stopped lending.
Since then, Project Merlin targets, the scheme whereby four of our biggest banks receive government money to lend on to business, have been consistently missed.
The Funding for Lending Scheme remains tragically under-used by business, probably because most don’t even know it exists and it is not in our bank’s interests to sell the benefits to business whilst they rebuild their balance sheets. Loan rejection rates for business in the UK are typically twice those of France and Germany.
This article is not promoting further nationalisation of the banking system (I think we have enough on ourplates owning 80% of RBS thank you very much) but new and innovative ways must be found to release funds for business, in particular small businesses.
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