By Ben Hughes
With the three main national parties having an evident commitment to at least some aspects of the work of CDFIs, can we look forward to a time of new hope and opportunity? Well yes….and no
Labour’s commitment to legislation in reforming the banking sector, along with creation of a ‘proper’ British Investment Bank to lend money to small- and medium-sized businesses and to support a network of regional banks must be good news, as is their rumoured interest in a new Small Business Service; all good news for CDFIs – and enterprise lenders in particular.
The Conservatives’ explicit endorsement of devolution, a Cities strategy and Small Business support, plus vague words on financial inclusion suggest support for below the radar financing across all markets, and the Lib Dems – most explicit in their endorsements – have flagged the pending British Business Bank research which was of course announced last month by Danny Alexander himself, and have pledged to support a new community banking sector
So, definitely some good hooks – irrespective of which rainbow of colours pervade on May 8th – on which to hang our autumn campaign, profiling the ‘new’ CDFA (which incidentally we’ll be launching this July) and pushing hard on key policy asks of our new government, to raise the bar for CDFIs. But are these hooks enough to ensure the long term political engagement that have been so key in other nations that have strong local finance industries, notably USA and Germany. I doubt it; we are still short on what many see as the moral imperative to really tackle the alarming problem of thousands of individuals, business and home owners who remain simply unable to access the finance they need, and that’s key to engaging meaningfully in both economic and civil society.
It’s interesting to look back at previous new governments, and those that have grabbed the moment – whatever your take on their politics. Atlee comes to mind, in both creating, and riding on, post war euphoria to establish ground breaking public policy initiatives on welfare and health. Thatcher, fundamentally changing the face of industry in the interests of the then pervading force of free market economic thinking. Blair, carving out a middle ground between neo-liberalism and traditional socialist roots on which his party was built. Very different individuals, with different politics but in many ways they all had evident ideologies that shaped their moral beliefs, and so those policies that continue to frame our government of today.
So what’s the moral imperative in 2015? Do any of those hooks above relate to a belief in the need for greater market equality, and so to government using public policy levers to gap fill? In a nation beset with inequality – with growing disparities in wealth, education and health, a few policies here and there will do little to change a system that is leaving increasing numbers underserved by the mainstream, and who are falling further and further behind. And with finance – or at least lack of – being one of the indicators, is it now more of a moral rather than ‘just’ economic or social, issue that needs an urgent response if we are to see the work of CDFIs properly valued in the corridors of power.
Ben Hughes is Chief Executive of the CDFA.