Public opinion: Your blogs

Pre Budget Report - short-term fix or wholesale reform?

It's the Pre-Budget Report tomorrow where Alistair Darling is expected to crack down on bankers' bonuses with a one-off supertax.

Now, this move might appease taxpayers angry that the people who helped to cause a crisis that led to a £200bn bail-out of the banking sector are being rewarded so soon afterwards.

But for many within the community sector, more wholesale reform is needed – the kind of reforms that can create a more equitable system, rather than a headline-grabbing, short-term fix.

These issues were explored at length during Urban Forum's annual conference entitled, It's the Stupid Economy. And who better for keynote speaker than Vince Cable, the politician who has persistently raised concerns about the health of the British economy throughout the financial crisis.

Speaking to delegates, the Liberal Democrat Treasury spokesperson described the UK economy as having had 'a massive heart attack', he said that no-one could yet tell whether the crisis was passing and that the economy was now 'in intensive care'.

He said the banking sector was too large in the UK, compared with other countries, such as Germany and France, and needed 'a more diverse, competitive, banking sector, which includes stronger mutuals, local community banks and credit unions'.

But he stopped short of supporting the reforms promoted by Urban Forum in its community reinvestment banking campaign, including the introduction of a Community Reinvestment Act (CRA) similar to legislation in the USA, which seeks to ensure fairness in banking.

While he is in favour of a Post Office Bank, to help create a fair and secure banking system, he is cautious about the CRA concept and its potential to prevent 'redlining'.

He told me afterwards that in principle, he was in favour of 'as much transparency as possible'. But he was concerned that the level of disclosure involved in a CRA would have unintended consequences, and could 'create blight' in local communities.

Mr Cable was also not totally convinced by the idea of a Community Allowance, which allows people claiming benefits to earn money to supplement their income, suggesting raising the tax threshold could be a simpler way of achieving the same thing.

It seems that Vince Cable is open to ideas from the community sector, but CRA campaigners and supporters of a Community Allowance will have to work harder to win him over. They also have a challenge promoting their ideas to a public fixated on headline grabbing issues like bankers' bonuses.

The announcement of a series of round table events to highlight the importance of banking reforms to members of black and minority ethnic communities, by fellow speaker, Karen Chouhan of Equanomics, will help.

The event provided a useful update on where we are and what the community and voluntary sector will experience in the future.

It's a tribute to the Urban Forum that it went so smoothly considering that their office was broken into and ransacked less than 48 hours previously, with the printer put out of action following the police investigation.