Since the beginning of the recession the banking industry has been hit by very hard and stern criticism. Scandal after scandal has followed - bankers’ bonuses; selling of toxic debt to aid betting on the markets; and the recent fixing of libor rates. And today, Lib Dem deputy leader Simon Hughes accused them of making “racist decisions”.
He told the Liberal Democrat conference:
“I have seen clearly banks, and heard clearly banks, who make racist decisions.
“They will say yes to a well established white individual who’s been in the community, but somebody with a better financial reputation who comes to them from the minority communities or is a black business person gets turned down.”
It is very hard for Mr Hughes to prove inconclusively the banks are in fact racist, however it is another stain upon their reputation. It is another stinging indictment of the culture of banking that has grown for so long now. The ruthless, careless detachment in the way they go about their business.
Hughes fits his original claim into a wider, and a much more common one, that the bankers of this country have “tarnished the reputation of Britain”, starved local economies of investment and stunted growth. For many it is this that holds the key to economic growth and recovery - that banks must loosen their purse strings to stimulate growth once more.
It is this that may have prompted Hughes’s accusations and attack on the banks.
Hughes said new rules are needed to force banks to publish details of requests for investment and the reasons why someone was successful in gaining a loan or why they failed. A continuation of calls for banks to be more open and honest organisations - organisations people feel they can trust once more.
Nick Clegg raised the issue in 2011 at the Scarman memorial lecture where he claimed black people are being held back from breaking the “last frontier” of racial and economic equality by the banking system.
“Britain’s banks, bailed out by the British people, have just as much responsibility as everyone else, arguably more responsibility, to help Britain build a strong and dynamic economy. Unleashing black and ethnic minority talent is their duty too.”
In response to that statement, Wilfred Emmanuel-Jones, the Conservative candidate who attracted much attention through the documentary ‘Cameron’s Black Tory’ and made his living as a businessman stated for many first generation immigrants public sector work was all they could find and their attempts to start business were more often than not more met with disdain; he said:
“UK banks have little understanding of black enterprise.”
Emmanuel-Jones proposes the dramatic measures of creating a bank levy which would create capital only black entrepreneurs can apply for. He describes such measures as not ’positive discrimination’ but in fact “positive action”. Emmanuel-Jones’s is an extreme measure which will probably not come to pass, however a successful black businessman, and a Conservative, promoting such a policy suggest there are problems with the banks.
This was a curve ball today at the Lib Dem conference, an issue that has gone quiet since being raised a year ago and one it seems clear the Lib Dems want to keep on the agenda. It appears Simon Hughes has some validity to his argument, from the experience of those in his constituency and the experience of Mr Emmanuel-Jones.
To inject an ounce of scepticism we mustn’t forget Mr Hughes is one of the favourites to succeed Nick Clegg and although this conference has been about highlighting the good the Lib Dems have done in government, it also is a time for political manoeuvring for those eying the leader’s job. By tapping into the call for an open and transparent banking system does his standing in the party no harm.