25 March 2010

What does yesterday’s budget mean for BME communities? As Runnymede’s recent report on asset inequality found, 60% of Black and Asian people have no savings, and recommended that the government should therefore do more to build up assets for everyone. In light of this, the scrapping of stamp duty for homes costing below £250,000 is a welcome move as it will to some degree encourage home ownership among all communities, particularly first time buyers. In addition, as BME people are more likely to live in deprived areas with low cost housing they will be more likely to buy homes costing under £250,000.

The government’s headline “financial inclusion” policy in yesterday’s budget was the guarantee of bank accounts for all. This is a positive move as it makes concerns around identity requirements (such as having a British passport) less relevant. However more could be done to improve money advice for BME communities. Research by Runnymede to be published next week found that BME communities are at risk of exclusion from the government’s new money advice service despite the fact that given the prevalence of serious money issues in these communities they are in more need of the service.

Finally, increased support for small businesses (SMEs) will help benefit BME communities as most BME entrepreneurs run SMEs. In addition, given past evidence of there being discrimination against BME Small and Medium Enterprises' (SME) access to credit in the UK (see Runnymede’s Financial Inclusion and Ethnicity report) the government announcement that RBS and the Lloyds Bank Group will be compelled to provide £94bn in small business loans is a welcome move.