David Boyle

No localism without local banks and local credit

Speech to the Liberal Democrat conference, Liverpool, 21 September 2010.


We’re all localists now.

From Eric Pickles to Ed Miliband, they are all of them gargling with the idea of devolving power.

And it’s a funny feeling.  We seemed to be nursing our commitment to localism almost alone all the time that Labour and Conservative were centralising power.

Now suddenly, they turn out to have been localists all along. 

Why didn’t I notice it at the time?

So let’s call it what it really was.  The best efforts of New Labour, built on the foundations of Thatcherism, transformed us from citizens into supplicants.

Pleading hopelessly at the doors of the quangos. 

Or their monstrous call centres.

If we wanted to change the opening hours of our local hospital cafe, we had to overthrow the government.

The point that this motion makes is that, unless we do something about economics as well – unless we devolve economic levers as well as political ones – we will stay supplicants.

We will run our local committees about waste collection, but we will still be supplicants to Tesco.

We will decide when our libraries open, but we will stay supplicants to Barclays or Lloyds or Natwest.

And when Tesco drives out our local businesses and Barclays fails to lend the money for any more, all that localism will mean nothing, because then we’ll be dependent on central government handouts in other ways.

So let’s be bold about this.  There’s no localism, and no chance of localism, unless we split up monopolistic corporates. 

No localism without tackling clone towns.

No localism if all the economic decisions about our towns are taken in boardrooms in the USA.

Most of all, there’s no localism without local credit. 

We now have only 170 local banks per million people in this country.  There are 520 in Germany.  There are 960 in France. 

Over 40 per cent of UK bank lending before the crash went on fuelling the property bubble.  Now it’s 70 per cent on property.

Real local independence is quite impossible like this. 

So we have to end this pretence, which is there in the next motion as well, that we can somehow lean on the banks to lend more locally. 

It isn’t that our banking oligopoly won't lend to small business.  It is that they can't. 

They’re no longer structured to do so.  Their attention is still focused on the speculative economy. 

They haven’t got any systems capable of lending locally.  They have no local infrastructure or managers that can help them decide.  They can lend on property but no longer on equity.

They’re too big.

This seems to me to be an absolute test of the coalition and our involvement in it.

If we can finally build ourselves an effective local lending infrastructure, after decades where the banks have failed local innovation and enterprise – have corroded our local economies…

If we can do that, then everything else about the coalition will be worthwhile.  If we can’t, well then nothing is.

Because local enterprise and local lending is absolutely crucial to local life.

Yes, we could just forget about local recovery and leave it all to the big corporates again.  Let them decide everything.  Give them even more privileges that their small competitors don’t have.

But I don’t want to live in that kind of nation.  I don’t want to live in It’s a Wonderful Life where everything is run by Mr Potter.  Or Potter plc.

It isn’t Liberal and it isn’t localism either

We are politicians.  Politicians are naturally most interested in taking decisions, maybe it actually is the highest human endeavour.  I don’t know. 

But we mustn’t blind ourselves to the economic side of localism

Localism without politics is a contradiction in terms.  But localism without economics is just a pretence. 


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title: books by David Boyle
Broke Voyages of Discovery Money Matters Blondel's Song Leaves World to Darkness The Little Money Book Funny Money The Tyranny of Numbers