Birmingham Municipal Bank - Birmingham's own Bank

After Mike Whitby single-handedly saved what is left of Birmingham's oldest motor car maker at Longbridge (albeit with some Chinese assistance), he turned his considerable talents to single-handedly rescuing the bankrupt British banking system with his then ‘latest idea’ - The Bank of Birmingham. 

This is nothing new………….

The city council leader followed in the political footsteps of another great Birmingham Conservative, one Neville Chamberlain, whose fate as Prime Minister all Birmingham people are familiar with after Munich and the appeasement of Adolf Hitler in 1938. 

He was the son of Joseph Chamberlain, creator of the modern municipal Birmingham. 

While Lord Mayor of Birmingham, Neville Chamberlain first had the idea in 1915 of creating a Birmingham Bank….the ‘Birmingham Municipal Bank’.

During his time as Chancellor of the Exchequer in the National Government of the early 1930s, the Birmingham Municipal Bank moved to a prominent site at 301 Broad Street.

This magnificent classical columned building, next to the former Warwickshire Masonic Temple Building before it moved to the Clarendon Suite in Sterling Road, Edgbaston, would have been the ideal place for the new Bank of Birmingham. It would have acted as the gateway to the proposed Arena Central development off Broad Street behind Alpha Tower, on the site of the former ATV Studios and opposite the new ‘Library of Birmingham’, another Whitby ‘dream’ which he has managed to turn into reality.

The new Library along with the shiny new New Street Station will be Mike Whitby’s gleaming legacy to the city he ruled for 8 years as head of the first prototype ‘ConDem Coalition’ 

The founding of the Birmingham Municipal Bank at 301 Broad Street is commemorated in the foundation stone which lies to the left of the grand pillared entrance near to the gilded statue of three other great men, founders all of modern Birmingham, Boulton, Watt and Murdoch at the bottom of Broad Street. 

Mike Whitby saw in his "new" idea for the Bank of Birmingham echoes of the great Birmingham Conservative and Liberal administrations of Birmingham's municipal heyday which put our great global city on the map in the late 19th and early 20th centuries, led by Birmingham's first family, the Chamberlains. 

Certainly in "Old Joe's" case, he was both a Conservative and a Liberal during his long political career, similar to the former 'Progressive Partnership' of Conservatives and Liberal Democrats which pre-dated the current Cameron/Clegg Coalition by several years in Birmingham Council House. 

Joseph Chamberlain left a great legacy of adequate, sanitary housing and clean water for Birmingham's artisans and created the ‘Workshop of the World’ out of that "City of a thousand trades" which supplied Britain and its Empire. 

Mike Whitby’s ambitious aspirations to leave a legacy like Chamberlain will have come to fruition in 2013 with the new Library of Birmingham.

Joseph Chamberlain left a legacy of his own with Chancellor’s Court at the then new Edwardian ‘redbrick’ University of Birmingham and its magnificent campanile dubbed ‘Old Joe’ after the university’s creator and benefactor.

Chamberlain’s vision for Chancellor’s Court as a ‘crescent of learning’ has finally been realised in 2012 with the completion of The Bramall Building in Chancellor’s Court. The Bramall houses the Elgar Concert Hall in tribute to another great Edwardian: Sir Edward Elgar, the new university’s first Professor of Music.

The main political difference between Mike Whitby and Joe Chamberlain was that Joe was both a Conservative and a Liberal in his career, like his political rival, the young Winston Churchill. 

To Mike Whitby, Neville Chamberlain’s idea of a ‘Bank of Birmingham’ at that time (pre banking crisis and recession) seemed like good policy. Mike Whitby saw the ‘Bank of Birmingham’ like the old Birmingham Municipal Bank as a possible solution to the city’s financial woes as the BMB had been when it was in Broad Street back in another time of financial and political crises, the 1930s. 

This great Birmingham financial institution was a grand idea for young aspirational Brummies like my mom and dad, who were building their homes and families after the deprivations of the Second World War. 

They obtained their first mortgage from the Birmingham Municipal Bank in the late 1950s. My mom then opened a savings account with the bank to help pay off their mortgage. 

Mom and dad had grown up in the urban squalor of the courts in the back-to-backs of Summer Lane in Aston and Dugdale Street in Winson Green. To them, being able to buy their own home was the stuff that dreams are made of considering their roots and where they came from. 

From memory, I think they borrowed GBP 2,500 to buy their first home in Bearwood, following marriage and living in ‘digs’ in Rotton Park and Edgbaston. 

The Birmingham Municipal Bank made the difference for my mom and dad. As the family grew with the arrival of my brother and sister in the early 1960s the values, business sense and financial acumen that such a Birmingham institution brought to people of my parents' generation was incalculable. 

My dad's parents, after being moved after slum clearance in Aston, went from the back-to-back courts around the Gun Quarter and Summer Lane to the fields and open spaces of Weoley Castle which was bliss compared with the dirty insanitary streets of Aston. 

My Dad’s family the Bracey’s were not prepared to get into debt, as my grandfather and uncle put it, and could now only afford to live in council housing in Weoley Castle which was a great improvement on Aston nonetheless. 

My dad, as an aspirational risk-taker, was prepared to take a chance on his skills as a ‘blue collar’ electrician and take out the Birmingham Municipal Bank mortgage and get into debt in order to buy his own home and better himself and his family. 

Both Chamberlain and Whitby came up with a fundamentally sound idea with the Bank of Birmingham, borrowing against the assets of a 3 billion GBP business in Birmingham City Council. The new bank had to be structured to appeal to ordinary Birmingham folk as the BMB had done to enable aspirational Brummies to own their own homes like it did for my mom and dad back in the 1950s. 

The problem now post banking crisis and into a severe recession is that to make a real difference Birmingham City Council would have to put in considerably higher sums of money than it could afford especially after the recent High Court equal pay decision which means that BCC could be liable to pay over 700m GBP to its former women employees. This would consequently expose the council and its ratepayers to considerably more risk than might be wise in the current economic climate. 

However as traditional banking practices over the last few years have proven to be unreliable with the ‘casino banking’ of the investment banks, the LIBOR rate fixing scandal and money laundering by HSBC being just three of many examples of unsound banking practices.

Perhaps it is a time for radical thinking and a return to the old values of thrift, prudence and not borrowing beyond one's means?

It may do no harm and could lead to solution to a banking crisis brought about by the banks not lending to one another through lack of trust. 

The UK is undergoing a chronic shortage of affordable housing which affects Birmingham just as much as other major cities. 

We have seen protests by housing activists in Stirchley and Kings Heath against Birmingham City Council's perceived inertia in bringing forward sites in its ownership for affordable housing. 

Sir Albert Bore, the current leader of Birmingham City Council and his deputy Ian Ward, have put forward the idea of developing affordable housing in the Green Belt at the former Peddimore inward investment site in Minworth north of Sutton Coldfield just off the A38.

In my opinion this is seriously misguided and will be vehemently opposed by the residents of Sutton Coldfield just as the Peddimore investment site was in the late 1990’s, when Dutch-based global company Philip’s were offered the Peddimore site as a location for a computer chip manufacturing facility just as the bottom fell out of the world semi-conductor market.

We cannot afford to jeopardise the future of the Green Belt with such short-term thinking, when vision is needed to solve the housing crisis by building on brownfield sites and looking at innovative ways of developing cities and urban areas.

The germ of the idea of the new Bank of Birmingham, could, if soundly financed and run properly once again enable proud Birmingham citizens to own their own homes at affordable interest rates, provided by council borrowing at preferential rates which only Birmingham City Council can obtain as a 3billion GBP business. 

Whether Birmingham council tax payers would wish the city council to take on the risk of setting up its own bank in the current economic situation is a difficult question to answer. Most council tax-payers would say: ‘get your own house in order first’! 

However, Mike Whitby should have been applauded for innovative thinking "outside the box" and putting forward the idea of recreating one of Birmingham's greatest and soundest financial institutions. 

The Birmingham Municipal Bank was subsumed into the Trustee Savings Bank in the 1970’s. It then became part of what is now the biggest UK bank, Lloyds TSB, or as it is now known: the Lloyds Banking Group. The TSB ceased to exist as a separate banking entity as late as 1976. Coincidentally, Lloyds Bank was founded in Birmingham in the late 18th century along with the Midland Bank, the forerunner of what is the now the world’s largest bank HSBC. 

My rallying cry to Birmingham City Council should it wish to consider setting up the Bank of Birmingham would be:

 "We did it once, we can certainly do it again; a Bank of Birmingham, founded on the principles of hard work, sound business practice, sensible borrowing within ones means, and prudence allied to thrift can succeed once more." 

Birmingham citizens could once again have the ‘People's Bank’ in Birmingham, whatever you wish to call it. 

Perhaps innovative Birmingham people could teach the bankers of the City of London a thing or two about sound banking practice…….?

They certainly can't do any worse.