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Jennette Arnold AM urges Boris to put his money where his mouth is, and only use responsible banks

Posted by David Hughes on November 29, 2012 at 2:20 PM Comments comments (0)

Jennette Arnold AM 

The London Assembly last week urged the Mayor to ensure that the Greater London Authority only uses banks with a strong record of lending to small business and a commitment to corporate responsibility. Labour & Co-operative Assembly Member Jennette Arnold describes why the GLA should move its money.

 

The motion, agreed unanimously by London Assembly Members, called for the Greater London Authority (GLA), Transport for London, the London Fire and Emergency Planning Authority and the Mayor’s Office for Policing and Crime to take a close look at where they buy banking services.

 

In the four years from 2008-12 the GLA group spent almost £35 million on charges and other costs for a variety of services including card processing, foreign exchange, bonds and securities.

 

In seconding the motion I highlighted how Londoners, many from my constituency of North East London (Hackney, Islington and Waltham Forest), are struggling with financial exclusion, forced into the debilitating clutches of loan sharks and because of a lack of affordable finance caused by the failure of the big banks find themselves unable to provide for their needs.

 

I believe it’s time the GLA joined other cities like New York, Seattle and Buffalo and move our business to banks that share a commitment to responsible banking. As the most senior tier of local government in London, the GLA could give a clear moral lead to other local authorities in moving the management of public funds over to banks and building societies that do not engage in “casino-style” banking operations.

 

By supporting alternative finance and increasing the size of the sector the GLA can directly boost the amount of affordable credit available to Londoners. In my own constituency, Hackney Council now banks exclusively with the Co-operative Bank. Co-operatives and building societies recognise that Co-operation – as opposed to Competition – can create a financial sector that is run in the interest of the wider public as opposed to a narrow group of shareholders.

 

As a strong and committed supporter of a number of campaigns around banking reform including: the Co-op movement’s The Feeling’s Mutual Campaign which called for Northern Rock to be re-mutualised and for an end to the de-mutualisation of the sector and also the Move Your Money Campaign, I felt proud to be seconding this motion and to receive the unanimous cross party support from London Assembly Members.

 

Given the scale of economic hardship being experienced across our capital, particularly within my constituency, Londoners rightly expect that their representatives procure services from institutions that contribute positively to their city and pay close attention to those who suffer financial exclusion and the isolation and poverty that it leads to.

 

It therefore really is not too much to urge Mayor Boris Johnson to put his money where his mouth is, and only do business with banks who have a strong track record of lending to small businesses in the capital.

 

The full text of the motion agreed at the meeting (14/11/2012) reads as follows:

 

“This Assembly notes that the GLA group procures a variety of banking services, from card processing and foreign exchange to bond and securities services. In the four years from 2008-12 the GLA group paid almost £35m in charges and other costs for these services, representing a significant combined procurement budget.

 

“This Assembly calls on the Mayor of London, the GLA Head of Paid Service, the Mayor’s Office for Policing and Crime, the Fire and Emergency Planning Authority and the Board of Transport for London to explore opportunities to move taxpayers’ money to banks with a better track record in lending to small businesses and with a track record that is a better fit with the group’s Responsible Procurement policy.

 

“As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.”