Mr Brown must help the poor to help themselves

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Tony Marchant's two-part television drama
Never, Never, screened on Channel Four this week, powerfully illustrates the problems faced by those in debt in areas where ordinary bank and enterprise loans are impossible to find. We must hope that, in tomorrow's pre-Budget statement, Chancellor Gordon Brown will do something to chip away at this unhappy status quo.

Tony Marchant's two-part television drama Never, Never, screened on Channel Four this week, powerfully illustrates the problems faced by those in debt in areas where ordinary bank and enterprise loans are impossible to find. We must hope that, in tomorrow's pre-Budget statement, Chancellor Gordon Brown will do something to chip away at this unhappy status quo.

A vicious circle of poverty and exclusion has long meant that those in Britain's poorest areas find themselves locked into a pattern of financial misery, denied by the banks the possibility of obtaining the credit that might enable them to change their situation. For too long, this state of affairs has been accepted as inevitable. But this, above all, is an area in which the much-mocked joined-up thinking has a role to play: new finance can dramatically help with neighbourhood regeneration.

Locally-based credit unions - in effect, neighbourhood banks - can help neglected areas to drag themselves out of the slough of financial despond. Default rates are remarkably low, partly because of a community sense of responsibility. These enterprises deserve to be encouraged further.

Red-lining - the reluctance of banks to lend money to would-be customers with the wrong postcodes - is socially destructive. Banks are entitled to make commercial decisions; they should also show imagination, however, in their lending policy. Some banks are far too cautious, with enormously damaging knock-on effects.

Above all, the Government can make it easier for investment credits to be issued, for example through a community investment tax credit. This can be seen as a form of collective self-interest. Financial incentives for investment in small businesses in poorer areas pay for themselves, in social terms, many times over.

The New Economics Foundation, a think-tank that played a key role in formulating the proposals put to the Treasury by the Social Investment Task Force, calculates that, in Britain's poorest areas, 80 per cent of funds come from government in welfare benefits and other costs. In short: money that helps a community to stand on its own feet is money well spent.

Above all, movement in the system is needed. Even the most intractable problems can be addressed, if the will is there.

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