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Brown: I'll get banks lending
Joe Murphy and Nicholas Cecil19 Nov 2008
NEW action to make it easier for small firms and homeowners to borrow from banks will be in the mini-budget next week, Gordon Brown indicated today.
He said there would be measures applying to all banks, not just those which were rescued with taxpayers' money.
"The issue now is how the banks will resume funding to small businesses and homeowners," he said at Prime Minister's Question Time this afternoon.
"We are in discussion with the banks about, first of all, how HBOS, Lloyds TSB and Royal Bank of Scotland can achieve their promise that they will have activity for lending and marketing of lending at the level of 2007.
"Secondly, how all the banks can resume funding. We will be bringing forward proposals very soon indeed."
His promise came under fire from Tory leader David Cameron, who had demanded action to make banks treat small firms better and to pass on interest rate cuts to homeowners.
Citing the cases of small firms hit with overdraft charges, he said: "Don't cases like this show that what's been done so far has not yet worked properly and we need to do more on the credit side to make sure that small businesses like this aren't strangled."
Mr Cameron's intervention came after business chiefs begged Chancellor Alistair Darling for a £1billion lifeline to stop hundreds of thousands of small firms going bust.
They appealed to the Government to set up a survival fund to help Britain's 4.7million small businesses get through the recession.
John Wright, national chairman of the Federation of Small Businesses, said: "One in three small businesses is unable to obtain finance. A similar number of businesses say that they are seriously considering closing should the current credit climate continue."
Reader views (10)
Crash Gordon should leave. That would do wonders for the pound sterling, the stockmarket and more importantly for our country and its economy.
- Georgie, Islington, London, 20/11/2008 12:12
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Either Gordon is pandering to the fiscal illiterate or he is a fiscal illiterate!
His entire ponzi credit boom has all the foundations of a house in quick sand, borrow spend and debt are the remit of this Labour government and the next 2 generations shall pay heavily for this complete mis-mangement and non productive credit boom & bust they have championed.
So please tell me Gordon Brown...how on earth are people going to be taking up 100% mortgages when there are job cuts & redundancies being announced at a rate never before known? It is frightening to think that this fool is running (and ruining) the country and even more frightening that there are more people in the UK who think he is doing a good job!
This Gordon is a UK problem NOT a US problem you have already bled the country resources dry and maxed out credit, the answer is hard work and produce, not borrow, credit, and yet more debt!
- Mark, London, 20/11/2008 08:56
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The priority, if he INSISTS on mortgaging the future of two or three generations, should be lending to business. When you read through these fatuous statements Brown and Darling make just focus on the word 'homeowners', not businesses. That's what they mean.
This bunch are so utterly short term in their thinking, with no grasp of basic economics, past present or future.
Some debt can be productive. Some can not. This whole fireworks show is for the benefit of the debt that is unproductive, divisive, rapacious and untenable.
Don't believe a word. Observe what they do, not what they say.
What they are doing is putting everything on Red 13.
- Dave Hall, Stafford, UK, 20/11/2008 00:40
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Gasbag Brown couldn't organise a Booze-up in a Brewery, let alone run a Whelk Stand at the end of Brighton Pier. So what makes him think that he can 'order' the Banks to start lending again!!
The Man is deluding himself.
- Uncle Vanya, Chelmsford England, 19/11/2008 17:52
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How's he going to do it? Ask them sweetly? Good luck.
- John Problem, Hackney Wick, London, UK, 19/11/2008 17:20
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Well done Gordon. Unlike the Tories, you clearly understand what is needed to solve the credit crisis - and not just in Britain, but worldwide.
- Keith Price, Luton, England, 19/11/2008 17:06
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Wow, I wish I had started a bussiness five years ago and racked up a huge amount of debt so I could get bailed out. What the goverment dont talk about or possibly dont relise is this is the natural course of things some companys with debt may not deserve to go down but the majourty are just dead wood and should go bust, it happens all the time, this has been a huge bubble and many companys have become fat and blotted on the last decade of boom. There are thousands of young profesionals ready to pick up the slack and have their chance at success, I feel the goverment have got this wrong. Its unfair for anyone with savings and FTB. There attempts to prop up the property market are sickening.
- Brian, Glasgow, 19/11/2008 15:27
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Mark - totally agree. Homes should be 3 to 4 times annual salary. My parents and grandparents bought at these rates yet they seem perplexed why I refuse to enter the market at a 7 times multiplier.
- Mark, Gloucestershire, 19/11/2008 15:19
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Encouraging more lending in the current market is like giving a drowning man a glass of water. He might be thirsty, but the last thing he needs right now is to take his mind off the ball.
More lending will lead to more repossessions.
Gordon could insist that developers hand over their empty unsold properties to housing associations at the same price as they buy them from councils. 1p!
Let's solve the housing crisis that exists - lower rents and more secure tenancies.
- Diane, Oldham UK, 19/11/2008 15:12
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If Crash Gordon manages to do this my dream of home ownership and millions of other prudent first time buyers dreams will be shattered, we all know housing is overpriced by approx 50% let it come down and you'll find the banks and building society's will lend again.
mind you he's got a election to win so he and labour will do everything in their power to fudge the economics for super short term agains...
unhappy prudent tax payer
- Mark, london, 19/11/2008 14:51
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