Very interested to hear Will Hutton, interviewed on This Week, say that the UK lacked banking capacity.It reminded me of the longstanding Green Party policy (quoted below) to establish a widespread and well supported community banking system.
In order to help bring about the democratisation of the banking system, and in pursuit of our policies to support the growth of local economies, a network of local Community Banks will be established. These will be democratically accountable non-profit-making trusts, which will be able to provide low-cost finance both at district and regional levels. Any operating surplus arising from these Community Banks will be reinvested in their local communities. Community Banks will be empowered to create credit in the same way that commercial banks currently do, and will be given favourable conditions for doing so by the central bank. They will also be able to create their own local currencies**, to operate alongside the national currency, where this is supported by the local community.
The Manifesto for a Sustainable Society continues...
In order to bring about a more socially equitable society, it is important that poorer citizens have access to affordable credit, which can give them an opportunity to increase their basic living standards. Alongside Community Banks, measures to help facilitate this will include the promotion and support of credit unions and micro-credit schemes in which small groups of people cooperate to provide guaranteed small loans to each other.
**As for the idea of local currencies, the advantages are very well expressed by the extract below from the Schumacher Society.
...local currencies are a legal, but underutilized tool for citizens to support local economies. Local currencies function on a regional scale the same way that national currencies have functioned on a national scale—building the regional economy by creating a protective “membrane” that is defined by the currency itself. Local businesses that accept the currency are distinguished from chain stores that do not, building greater affinity between citizens of the region and their local merchants. Individuals choosing to use the currency make a conscious commitment to buy locally first, taking personal responsibility for the health and wellbeing of their community, laying the foundation of a truly vibrant, thriving local economy.
Also see these sites describing examples of local currencies in the UK:
