25 March 2010
Barclays financial inclusion research launch event
Check against delivery
Thank you for the opportunity to speak here today and to Barclays for hosting the event [and to Deanna for that kind introduction].
I would like to keep my comments short, but would briefly like to cover some of the ongoing work this Government is taking to promote Financial Inclusion.
The role of banks has been questioned after the recent turmoil in the banking system, but it is crucial in the modern economy that we have a strong banking sector, that serves consumers within the country effectively.
In the modern economy it is also vital that people have access to these services.
For this reason, we have endeavoured to continue to increase financial inclusion in the UK, and our programme to achieve this does so with the objectives that banks should serve their communities.
And I am proud of the significant results that our programme has delivered in recent years. These achievements include:
The number of adults without access to a bank account has fallen from 3.57 million in 2003 to 1.75 million in 2007. This meant that we met our shared goal of halving the number of adults without access to a bank account.
- Banks have also delivered 697 free ATMs in deprived areas, which exceeded the target we set in 2006 by 49.
- The Financial Inclusion Growth Fund has provided over 240,000 affordable loans, worth over £104 million, to poorer households since 2006; and
- Financial Inclusion Face-to-face money advice project has also helped almost 300,000 people since 2006.
Our objectives could never be made without the contribution of banks themselves, so I should like to reserve my praise for the contribution that Barclays continues to make towards our financial inclusion objectives.
They continue to demonstrate the resolve by setting the pace in the banking industry when it comes to identifying and meeting the financial services needs of vulnerable consumers.
As you will hear in greater detail shortly, they have taken further action to research access to banking. I welcome the findings of this research and shall look forward to working with the Taskforce and Barclays to apply this learning to our next steps for financial inclusion.
I should also like to briefly cover the package of measures we announced at Budget yesterday to put retail banking at the service of communities.
The first of these is an agreement between Government and the Financial Services Authority (FSA) to work with the banks to improve disclosure of data on bank services.
This will mean that both the Government and the FSA will seek geographic information on bank lending and current account services.
And it will show how the banks serve different local areas, help Government to understand patterns of investment and identify unexplained gaps in service.
We also made a commitment to halve the number of adults without access to a current account, and intend to deliver this through a new obligation on the banks that would create a consumer right to an account.
We want everyone to know they can access essential financial services, and it will mean that, over the next five years, up to a million more people will have access to bank accounts – an essential in the modern economy.
And we will continue to rely on Taskforce analysis and advice, to deliver this in the most effective way possible.
Back in 2007, major retail banks committed to support community lenders providing affordable credit.
Clearly, they have been through a tumultuous time since then, but it is our view that banks should take greater responsibility for supporting consumers they do not serve themselves.
And once again I have to commend Barclays, which has been one of the few banks to make a substantial commitment to third-sector lending, through its Community Finance Fund.
But we have not observed all banks following suit.
Budget therefore announced our intention to ensure that there is an increased contribution made by the banks to the community-lending sector and a commitment to consult on ways to do so. These will include regulatory and levy options.
And we will explore options to ensure that all of the banks make an appropriate contribution to the community-lending sector, so that we continue to improve the supply of affordable credit for low-income households.
These announcements demonstrate our continued commitment to increasing financial inclusion in the UK, but we recognise there will be more to do.
But through understanding the problems that people face, through research and through connecting with the hard-to-reach people in the economy, Government and the sector can overcome this together.
I appreciate the commitment made by those here today, and I hope that it persists.
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