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What about a Bank of Herts?

The Issue: Should Hertfordshire County Council follow in the footsteps of Essex County Council and set up a Bank of Hertfordshire to support local businesses during the recession?

The Facts:  Essex County Council have set aside £50m for loans of up to £100,000 for small and medium sized businesses which have been trading for at least a year.  This is being created under powers that state Councils can promote the economic well being of their area.  The Bank of Essex could be set up within a year after going through all the necessary legal and regulatory work.  It signifies a shift away from a remote centralised system of banking to one more responsive to local need.  Essex's initiative will work in partnership with the Santander Bank to make it the first Council run bank for more than 30 years.  The Birmingham Municipal Bank, established during World War One survived until 1970. 

The case for:  Liberal Democrat MP Colin Breed thinks local banks could really work; "small institutions that would make local decisions for local communities".  The proposed Bank of Essex would channel Emergency funds being made available from the European Investment Bank directly to businesses in trouble - bypassing Britain's High Street Banks. It is important that we help local businesses during economic difficulties and cutting out the middle men so to speak, i.e. the large high street banks, would make it far more beneficial for the local economy.

The case against: Could be expensive.  Where would this extra £50 million come from?  What would you do if the business still went under following the loan?  Is there any guarantee that the County Council would get their money back?  Who regulates it? 

Have your say: What do you think of this idea? Do you think this could really benefit Hertfordshire businesses or would you rather see the money used on something else? Let us know: info@ehpeople.org

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