It has been the commonly held view since at least the second world war that the way to bring about economic growth in the poorer parts of Britain was through government intervention; through negative measures such as industrial development certificates, and through positive measures such as subsidies, grants, and cheap loans. Equally, it has been commonly argued that the way to generate growth in general is through increased government spending, financed as often as not through inflation of the money supply. Both views have become progressively more difficult to sustain in the light of actual experience, of deprived areas remaining so despite the aid they receive (while the areas financing regional aid themsleves decline), and of periodic bouts of inflation creating transient growth at the cost of long-term depression and unemployment.

But, if failure is the predominant feature of post war policy the example of an earlier period might well indicate the way towards a more prosperous future. Between 1750 and 1844, Soctland raised its standard of living from half that of England to somewhere near parity and did it without government activity, interference, or control. The engine behind that remarkable record of growth was a banking system free of all but the most minimal restrictions and isolated from the activities of any central bank.

At a time when legislation is promised to complete the amalgamation of the Trustee Savings Bank Movement into a new national joint-stock bank, when the Royal Bank of Scotland is integrating its operations with its English affiliate, Williams and Glyns, and when non-banking financial institutions such as building societies are increasingly offering banking-type services, it would seem appropriate for a radical review of the regime within which British banks have to operate and the consequences that regime has created for their customers.

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