A TREASURY minister has warned that the North East economy is being held back by a “computer says no” banking system in London.
In an attack on the big banks and their lending record North East-born Greg Clark made a clear link yesterday between a lack of regional decision makers and the distant lenders concentrated in London.
Mr Clark, financial secretary to the Treasury, told delegates gathered for a regional banking conference held at Newcastle’s Baltic art gallery that the coalition was eager to help new banks set up to ease the economic pressure.
He told the audience regional banks would have to play a role in providing the billions of pounds-worth of capital the North East will need to continue growing in the coming decades.
Mr Clark hit out at London-based decision makers at the event organised by Hexham MP Guy Opperman, a leading advocate of regional banking.
The Treasury minister said: “It is no coincidence that problems in the banking system have come hand in hand with more centralisation.
“It was almost forgotten for some time by some people that banks exist to make the lives of their customers easier. yet community facilities have been replaced all too often by a system in which the computer says no.
“And yet there is no substitute for being a part of your community.
“The North East is an area that is growing but it will need large amounts of capital to do that and possibly from a bank based here. The fact that this conference is being held here, the first in the country, is though a great sign for the North East.”
Mr Clark drew on his Teesside roots to set out the historic damage caused by bank centralisation.
“I grow up in Middlesbrough in the 1970s and 80s and you can clearly see in that era power slipping away from the region and elsewhere.
“That was industrial power, financial power and political power and was by no means a phenomenon unique to the North East.
“There was a time when Middlesbrough was described by Gladstone as an infant Hercules, and the industrialists who made it that way were indivisible from the community leadership.
“But as time changed and Dorman Long became British Steel and the financial decisions that affected jobs there started being made not by the banks of the Tees but of the Thames.”
He said that the time had come to reverse that situation for places such as the North East where there was a clear interest in regional banking.
Mr Clark added: “The North East is really on the move, you just have to look at its export record to see that. If we as a country are to return to prosperity we need to be exporting more and this is the only region with the only positive balance of trade.
“And the region has an enormous role to play in the UK economy and access to finance has a role to play in that.”
Among others speaking at the event was Anthony Thomson, the Newcastle-born millionaire who helped found new London lender Metro Bank.
He said new banks would need at least £100m in capital to start up, but that there were good signs that new local banks were coming.
“I think if you do it for the right reason, that profit is a by-product, I see no reason why we can’t see a revival in regional banking.”
There is no substitute for being a part of your community