20 April 2006
Speech by the Chief Secretary to the Treasury, Des Browne MP, at the Financial Inclusion Taskforce Conference
Check against delivery
Opening comments
1. It is a pleasure to be invited here today to make a short contribution, and let me personally welcome you to the Treasury on behalf of my ministerial colleagues. I would like to take this opportunity in public to thank Brian Pomeroy and the Financial Inclusion Taskforce for all their outstanding work over the last year, and let me also thank the Treasury Team – Jessica and Aisling – for organising today’s event.
2. I apologise for not being here to welcome you earlier this morning, I will not be able to refer to those presentations that have already been given. As some of you may know Thursday’s in Whitehall are a three-line whip for cabinet ministers, but I did see the end of Nigel’s research presentation of the ongoing challenge in this critical area. Let me assure you we in Government are up for that challenge – there is much to do.
3. But I want to start with recognition of how well the Taskforce has pushed, prodded and galvanised the right people to deliver on this critical agenda – raising its profile and getting it into the mainstream, both in terms of thought and policy.
4. Let us be honest – there are those who are sceptical about what we’re trying to achieve. For me the objective, and our motivation, is very clear. Financial inclusion for me is a symbol of our philosophy of government – it is about the kind of society we want our people to live in in the 21st century – it’s about how we can enable people, and never ingore them.
5. As we seek to match economic success with improved social justice, it is not possible to sit idly by as people are excluded or marginalised on the fringes of our modern, global, electronic, flexible, diverse society.
6. In my constituency I have witnessed this challenge. The Post Office is a good example, providing a key service at the heart of communities, ensuring access to benefits and services. I have had some interesting experiences campaigning in crowds as they wait for such offices to open on a morning – not least when I was asked for the European convergence criteria in a local Scottish election campaign. People never fail to surprise.
7. But what is critical is that everyone must be included as part of this society – and it is only fair that they too can join in the success of Britain, both for themselves and for us all. It is good for us all if every boat rises on the same tide. Let us not forget, this country has experienced some 54 quarters of consecutive growth – the longest expansion in British history. We want everone to reap the rewards as the economy continues to grow.
8. But we cannot rest on our laurels. We cannot “do nothing” or return to earlier eras of indecision and unambitious policy making. We cannot ignore those who do not benefit from this growth, or from this global economy. We have a responsibility, we have a clear motivation, and we know what the objectives are.
9. And that’s why in the Budget, the Chancellor of the Exchequor clearly set out our vision for a modern Britain – focusing on enterprise and prosperity, and how we can all share in this opportunity.
Impact of Exclusion
10. But in this modern economy, as the research findings showed in the previous presentation, financial exclusion still remains, and even now it presents us with real challenges. With some 2.8 million adults in households without access to a bank account of any kind, it is our duty to tackle this issue.
11. I know this is an audience which doesn’t need to be preached to on financial inclusion – but it’s worth thinking about the real impact on the economy and our country – and of course on the individuals and families themselves.
12. Too many people on low incomes cannot access affordable sources of credit that meet their needs. And that means they often rely on expensive legal alternatives – or worse still, become vulnerable to illegal loan sharks, charging extortionate rates packaged with a nasty cocktail of intimidation and violence. This is unacceptable.
Action Taken
13. That’s why we have already acted to improve access – access to advice, access to banking and access to credit.
14. The Financial Inclusion Fund – a £120 million fund –demonstrates this Government’s commitment to such action. From that fund, £45 million is supporting a step-change in the availability of face-to-face debt advice – as my colleague Gerry Sutcliffe set out earlier.
15. The £36 million Growth Fund enhances the coverage, capacity and sustainability of lenders – such as credit unions and CDFIs. This provides capital for delivering personal lending services for those on low incomes, and in areas of high financial exclusion. And it provides revenue to ensure participating institutions are properly resourced.
16. Of course, these community lenders are extremely well placed to target people who are excluded from financial services. They are also pretty good at helping clients obtain money advice in the course of providing a loan. And they are very good at connecting people with more mainstream opportunities.
Campaign
17. So whatever else, bringing the financially excluded into our financial system is a vital step to take – and we’ve made some good progress already. I know the Economic Secretary, Ivan Lewis, will speak about this in more detail later, so I won’t go into it now. But we have done much already and he will explain further.
18. Of course, I’m sure Brian and the Taskforce would be the first to say – “there’s more to do” – and I agree. We need to do what we can to help drive up access to banking. We need to what we can to continue this fight for better financial inclusion.
19. So in support of the Taskforce’s work to date – and following it’s suggestion – I am delighted to announce that funding will be made available from the unallocated portion of the Financial Inclusion Fund.
20. This will underpin a campaign to encourage and to support intermediary organisations such as charities and housing associations to advise and to assist the financially excluded – not just in opening bank accounts, but as importantly, in identifying sources of affordable credit where that can help.
21. Communicating the support and the assistance available for those who have been cut out of the financial mainstream is vital if we are to progress this work – and I know the Taskforce will build on it’s track record of success in the months and indeed years to come. What this campaign will do is help us move to a new level in tackling such exclusion – but the Taskforce will go into greater detail about this later today.
Closing Remarks
22. So let me end on this. This is the right time to act. We are – and will remain – committed to the fight against financial exclusion. I want to again welcome the invaluable work of the Taskforce to make real progress towards our objective of tackling exclusion.
23. This is good work – work that we all must continue with, to reach those most in need of support. And this campaign as announced today will be an excellent next step.
24. Thank you.