A letter to the Editor of the Times which was published on 7th March 2009.

The Bank of England is using £75 billion to buy commercial banks’ bond liabilities in the hope that they will deploy the liquidity thereby created to increase lending.

At best this scatter gun approach is a very indirect way of restarting the economy.  Why not instead feed some of this money directly into business through the medium of an industrial bank, which would specialise in lending to industrial businesses, particularly for investment in new equipment?

If this equipment were built in Britain from primarily British components this would increase jobs and put more money directly into the hands of wage earners and thus increase demand.

In Northern Rock the Government has a ready-made vehicle for this role with an established network of branches that, with careful recruitment of business expertise, can gradually shift out of the oversupplied mortgage sector and give the Rock a distinctive future supplying this country with something it urgently needs.

Such a change of focus would also give the hard-hit North East something to cheer about.