LABOUR WELFARE RED TAPE HINDERS PIONEERING BANK PLAN

LABOUR WELFARE RED TAPE HINDERS PIONEERING BANK PLAN

The UK Government is being urged to make changes to benefits rules which would allow a radical form of banking pioneered in Bangladesh to be brought to Scotland to help people out of poverty.

Proposals by Nobel Peace Prize-winning economist Professor Muhammad Yunus to offer small business loans to people without collateral are in doubt because the Department of Work and Pensions has been unable to say what would happen to claimants' welfare payments if they took out a loan. Under current legislation, if someone takes out a business loan, they forfeit their benefits.

SNP Work and Pensions spokesperson John Mason MP has written to Work and Pensions Secretary Yvette Cooper over fears that the benefits system could stop the Grameen Bank coming to Glasgow. A documentary, Scotland's Brand New Bank, is to be screened on BBC One tonight (Tuesday) at 2235 BST.

Mr Mason, the MP for Glasgow East, said:

“The Grameen Bank is a revolutionary idea which has lifted millions out of poverty around the world but hit the buffers here because of UK Government bureaucracy.

“If this bank can work in Bangladesh, there is absolutely no good reason why it cannot work here too.

“Under current rules, if someone takes out a business loan, they would forfeit their benefits, and that would clearly discourage many people from starting up their own business.

“This is a plain example of how the benefits system can trap people in the cycle of poverty.

“There is no reason why these rules cannot be changed, and the Department for Work and Pensions must be made to remove these barriers.”