News Column

The Bank of Salford could start a revolution in local finance

January 19, 2014

Ian Stewart, theguardian.com

I have lived in Salford for 50 years. I raised my family here; this is where my roots are. Salford is a great city and we have a proud history. But there is a terrible and shameful secret that haunts our community, one that we have to be honest about and address. We have a problem with debt. In Britain , a third of people do not earn enough to cover their living costs . In Salford this is more like 50%. For many, the family budget is impossible to manage. Lots of people borrow out of necessity and they pay too high a price through astonishing levels of interest. As our city's first directly elected mayor I have made it part of my mission to use every power I have to try to lift living standards and tackle debt. Salford was the first local authority in Greater Manchester to implement a full living wage of 7.45 for every member of staff. Now 1,200 of our lowest paid staff including all our apprentices are guaranteed a wage that allows them to live with some dignity. We have established an employment standards charter for the public, private and third sectors which pushes for a full living wage, is tackling in-work poverty and is combating the odious practice of blacklisting . All of this is important. But in Salford , we know that we can't stop there. That's why we've decided to set up a bank. Working with colleagues in the trade union movement, local credit unions and partners from other sectors we are now in the process of creating a genuinely local bank to serve the people of Salford using Salford money to improve Salford people's lives. This is a radical agenda with a practical focus on lifting people out of the mire of debt pushed on them by unscrupulous lenders. People who can't afford to live day-to-day deserve the support of their communities. In Salford , we are trying to put our money where our mouth is. Setting up a bank isn't easy. It takes a huge amount of commitment, work and above all cash. That's why Salford local authority is exploring innovative ways to help create and sustain a local public interest bank for the common good of Salford people and organisations. We're looking at the potential of running our payments, payroll and reserves through a Bank of Salford to ensure that taxpayer's money is being used to improve the lives of our people. We are also working with employers, local communities, workers and other organisations to bring the resources we need into the city. In the same way that Salford is clear with our partners that we expect them to pay the living wage and treat their workers with decency, so we will ask them to look at the Bank of Salford as an affordable ethical alternative to unethical commercial banking and loan companies. To reduce the impact of dependency we must reform services and transform our own place as well as creating decent jobs, wages and growth. We want to succeed in breaking the stranglehold of predatory finance. And, I hope, we will set an example to other local authorities of what can be achieved through innovation and working in partnership. Of course we need reform at the centre. And the pioneering work of people like Maurice Glasman and Arnie Graf focused on fighting the dominance of financial fat-cats in Westminster and Whitehall is inspiring and important. But decent, caring local authorities cannot just sit on our hands and wait for a change to come. We need to be that change. A new Bank of Salford will use local money to help local people and local businesses. It should revolutionise the way Salford does business and liberate consumers from over-priced, irresponsible credit. Personal debt is the toxic legacy of the financial crisis and it has to be tackled before we can hope to get back on our feet as a country. My local authority is taking action; I hope others will soon join us.


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Source: Guardian Web


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