In a time of shrinking budgets and austerity, David Blunkett advocates... microfinance. But why?

Our diarist notes the former Home Secretary retains a sense of irony

Related Topics

A scheme originally devised to help Bangladeshi peasants escape from poverty could be put to use reducing the number of unemployed in the UK, the former Home Secretary David Blunkett reckons. Microfinance makes small, low-interest loans available to people who are too poor to provide the kind of collateral that banks require, to help them set up businesses.

It was pioneered in Bangladesh by the Nobel Peace Prize winner Muhammad Yunus and spread across the world, attracting rave reviews as the key to giving the poor what Tony Blair used to call “a hand up, not a handout”.

Then around 2010, it hit a wall of scepticism, as questions were asked about the kind of people getting these loans. Only this week, the Massachusetts-based National Bureau of Economic Research reported that a sudden rise in child labour in Bosnia had a lot to do with the availability of microloans. Last year, the UK Government sponsored a comprehensive review of the somewhat scanty evidence. The conclusion, published in August, was that “it remains unclear under what circumstances, and for whom, microfinance has been and could be of real, rather than imagined, benefit to poor people”.

But Blunkett is still a believer. He argues that microfinance is an economic way to get people off welfare and into self-employment. “Yes, a lot of it would be fairly menial and basic work; but if people need ironing doing, meals preparing and delivering, basic repair and gardening work, then why not?” he argues. His essay goes on line at 10am today on Labour’s Policy Portal.

Can Clegg brush off three small deposits?

Four years ago, a Labour candidate came a humiliating fifth in a by-election in Boris Johnson’s old bailiwick, Henley-on-Thames. In Nick Clegg’s view, the lesson was clear. “After one year in the job Gordon Brown cannot even get enough support to save his deposit!’’ he said. “Labour’s days are well and truly over.”

After two years in the job, Nick Clegg was unable to get enough support to save two of the three Lib Dem deposits in Thursday’s by-elections, nor even to beat the Reverend Simon Copley of the Herringthorpe United Reformed Church, standing as an independent, in the race for seventh place in the Rotherham by election.

Tatchell’s spectacular loss marked with a win

Monday will mark the 30th anniversary of the day when Peter Tatchell was suddenly propelled to national fame, after the then Labour leader, Michael Foot, vouchsafed that Tatchell would never be Labour’s candidate in an impending south London by-election. Tatchell went on to be Labour candidate in the Bermondsey by election, but was persuaded to draw a veil of silence over his sexuality, which managed  to convert what should have been an irrelevance into a dirty, open secret, and Labour lost in a campaign with nasty homophobic overtones. For years afterwards, it was assumed that the wisest course for any party hoping to win a parliamentary by-election was to put up a married heterosexual. This week, Steve Reed, who is openly gay, held Croydon North for Labour with almost 65 per cent of votes cast. He was the first.

Johnsons keeping up with the Johnsons

I see that Rachel Johnson, the editor-in-chief of The Lady, and Leo Johnson, of PricewaterhouseCoopers, have made it into the latest edition of Who’s Who. They are siblings of Boris Johnson and Joe Johnson MP, and children of Stanley Johnson, who already have Who’s Who entries. Five Johnsons in one tome – spare us any more!

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Read Next
David Cameron faces the press as he arrives in Brussels for the EU leaders summit on Thursday reuters  

On the Tusk of a dilemma: Cameron's latest EU renegotiation foe

Andrew Grice
John Profumo and his wife Valerie Robson in 1959  

Stephen Ward’s trial was disgraceful. There can be no justification for it

Geoffrey Robertson QC
Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas