Bank of Torbay would be 'wonderful idea' says MP
A BANK of Torbay could be created under proposals aimed at kick-starting lending to businesses and householders.
It is also being mooted that the Heart of the South West Local Enterprise Partnership, which covers Torbay, Devon, Plymouth and Somerset, should be able to bid for a pot of Government cash which it could use to revitalise the area's economy.
They are among a range of measures being proposed by the Liberal Democrats at their upcoming conference in Brighton in an effort to get the nation's financial fortunes back on track and create jobs.
The party is currently in government with its Conservative coalition partner.
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One of the proposals to open access to finance is to pave the way for new lenders, and includes the turning parts of the state-owned Royal Bank of Scotland, which has a branch in Torquay, into local, community banks.
The party's policy paper, which will be voted on by delegates, states: "In the aftermath of the financial crisis, UK SMEs have regularly expressed concern about the limited availability and high cost of finance."
Pointing to the decline of 'relationship banking', it went on: "Lending decisions are increasingly taken on an automated or 'tick-box' basis by computer systems or individuals with little knowledge of the relevant business or local economic conditions."
Many successful economies such as Germany local banks that were better at lending to small and micro businesses during the economic downturn.
The document added: "The top heavy nature of the UK banking system makes it harder for SMEs and regional businesses to access credit reliably and this in turn undermines our long-term international competitiveness, as well as undermining many local economies."
Lib Dem MP for Torbay Adrian Sanders said: "It sounds a wonderful idea. To have decisions taken closer in the way they were in days gone by bank managers.
"The idea is one that will prove extremely popular with business and the public, having more fiscal autonomy within the local community, rather than being dictated to by people hundreds of miles away."
Ministers were recently pressed on the case for local community banking and the break-up of RBS, which is 83 per cent owned by taxpayers.
The Lib Dem policy document, to be debated at the Lib Dem conference in Brighton on September 24, also calls for a portion of future rounds of the Regional Growth Fund to be earmarked for Local Enterprise Partnerships.
These could bid for a pot of the cash and operate their own funds.