David Prosser: Bashing the banks all over again
Wednesday 24 March 2010
Outlook When the public finances are as shaky as they are now, a Chancellor looking for Budget giveaways has to think laterally. So you can see why Alistair Darling may be tempted to say today – as reports suggest he will – that banks are to be legally required to offer a current account to anyone who asks for one. It would cost the Treasury not a penny and has all the appearances of an attack on greedy, selfish banks that aren't interested in doing business with the less well-off in society.
There's just one problem with that analysis. The larger banks are already legally required to offer a basic account – which is all the Chancellor is talking about – to almost everyone who asks. There are but two exceptions. A bank can say no to such a request if you're an undischarged bankrupt (though several institutions are prepared to accept such people as customers) or if you're a convicted fraudster.
It seems unlikely that Mr Darling is planning to order the banks to waive those rules. What's more credible is that this is an announcement that suits the Chancellor because it's free and deliverable (in the sense that it is already being delivered). It's the sort of trick for which the Prime Minister was renowned in his days at No 11.
None of which is to say that it is wrong to make it a priority to get as many of the 1.75 million people without a bank account currently on to the books of the banks as quickly as possible.
In fact, the Government, together with the banking industry, already has a good story to tell on this issue, having halved the number of people without bank accounts in the past five years – and at current rates, the number will halve again in the next five years.
That's important. Not having a bank account is a significant contributory factor in social and financial inequality. It is, for example, one of the basic checks made by credit ratings agencies when they assess applications for anything involving an element of credit. That doesn't have to mean a debt-inflating credit card – it might just be an application to spread the cost of house insurance over a year.
Nor do those without bank accounts have access to the best deals from the big utility companies. Gas and energy suppliers offer cheaper prices to customers who pay their bills by direct debit – so do many phone companies. The bankless therefore pay more for the most basic services.
In other words, the Chancellor is quite right to insist that the banks keep up the good work on tackling financial exclusion. But to pretend this is somehow a new strategy – let alone another payback for the banking crisis on behalf of taxpayers – would be dishonest.
arts + entsThere were towering ideas, some scintillating performances and revelatory grooves... our writers pick out their personal highlights
elephant appealThe first 23 lots in our charity auction have now gone. But there are 22 more still up for grabs
elephant appealPrince William signs up for our charity appeal
peoplePrepare to be entranced by worms as the molecular biologist gets ready to give the Royal Institution science lectures
elephant appealSo says man jailed for cutting off dead elephant's tusks
booksWe examine the best titles for teens
voicesPeople moan that Christmas is too commercial, the spirit lost. But it is a time to over-indulge, and always has been, says DJ Taylor
scienceResearchers teach border collie to understand sentences using more than 1,000 words
booksA Christmas story in six parts
travelWill high-value tourism help the workshops of this Renaissance city?
food + drinkA trifle without custard? Surely not! Nonsense – and here’s three to finish your festive meal that prove it
Geoffrey Macnab does not like the comedian's big screen debut
Top PR exec Justine Sacco under fire for sending racist tweet before flying to Africa
French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
Ten best places to live in the UK: Hart in Hampshire takes top spot
'Untrue statements' anger over work to make H5N1 bird-flu virus MORE dangerous to humans
Paul Walker's daughter Meadow attends Justin Bieber Believe premiere
- 1 Top PR exec Justine Sacco under fire for sending racist tweet before flying to Africa
- 2 French pub fined €9,000 after customers returned empties to bar - because it's 'undeclared labour'
- 3 Sun will 'flip upside down' within weeks, says Nasa
- 4 The publisher who played with fire: the battle for control of Larsson's £30m legacy
- 5 Police seize possessions of rough sleepers in crackdown on homelessness
- < Previous
- Next >
iJobs Money & Business
£59999 - £80001 per annum + Benefits: Pro-Recruitment Group: A Top 10 firm in ...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Project Manage...
£60000 - £90000 per annum + benefits + bonus: Harrington Starr: Business Analy...
£Negotiable: Citifocus: High calibre individual with institutional client serv...