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Downing Street stepped up pressure on the banks this afternoon to give struggling industry a lifeline of cheaper loans.
As chief executives of the leading banks faced a dressing down at the Treasury, the Prime Minister's office warned they had not lived up to pledges given when they needed bailing out by the taxpayer.
Business Secretary Lord Mandelson announced that he would be joining Chancellor Alistair Darling at the talks. He said that pledges to lend more had been “an integral part” of the deal to recapitalise the banks.
“Those agreements have got to perform better in the future and that is what we will be discussing with the banks' representatives this afternoon,” added Lord Mandelson.
The Business Secretary said he expected banks to say the problem was a lack of demand for lending. But he made clear that was not a good enough excuse.
“The Chancellor and I are not satisfied that lending is as it should be,” he said. “We are also concerned about the cost of lending and that is what we will be focusing on this afternoon.”
Mr Darling said yesterday he was “extremely concerned” that firms were paying too much for credit when base rates are 0.5 per cent. He warned that government bail-outs were not made “out of some charitable act” and called on banks to play their part in reviving the economy.
Chairmen and chief executives from the major banks, such as HSBC and Barclays, who have not needed bailing out, and Lloyds and Royal Bank of Scotland, who have been given billions in emergency funding, were at the meeting.
Angela Knight, chief executive of the British Bankers' Association, insisted lenders were “meeting their part of the bargain”.
But Stephen Alambritis, chief spokesman for the Federation of Small Businesses, said the Chancellor was “quite right to haul in the banks”.
Reader views (6)
And democracy is in danger here in Italy!!!first you had Brown the unelected prime minister and now you have Mandelson (who I don't think has ever been voted for by the british people) running the country
- Linda, italy
This political vulture will not be going away after the next election. He is currently feeding of the carcase of this Labour government. A carcase that is barely holding out for the EU Constitution to be ratified. A disgusting cynical move by profoundly corrupt socialists, hell bent on destroying democracy in Europe. At which point his best friend Blair becomes unelected President of Europe, and there will be a job for him back on the EU gravy train.
- Frank, Home Counties, England.
"Business Secretary Lord Mandelson announced that he would be joining Chancellor Alistair Darling at the talks"
So, confirmation at last, Meddlesom is the one really running the country. I bet Darling was 'delighted' when Meddlesom invited himself to the meeting with Bankers. Once upon a time, the post of Chancellor of the Exchequer meant something (one of the most senior and important posts in the Government), under Brown's disfunctional leadership, Alistair Darling must wonder who he actually reports to. First, despite his statement that VAT will rise to it's original 17.5% on 1st January as announced in the budget, Harriet Harperson crops up and sdays that the proposed increase in VAT is "under review", followed by another statement from Darling saying "no it's not. Then, to cap it all, Darling announces that he's meeting the senior Bankers, only to find that he's not trusted to do it without "25 Committee" Meddlesom sticking his oar in.
What a way to run a Government and a country. As somebody has already said - you couldn't make it up if you tried.
- Malcolm, London
So the government calls the bankers in for a good telling off and then behind closed doors lies down and exposes both cheeks? That's a day's work done, then.
- Bloke, London
If a haulage company was told its self employed owner driver would not deliver the goods to the destination, he would load his own truck and take the delivery himself.Why are brown/darling not loading the taxpayer owned banks and delivering our loans at reasonable rates.
- Kev Reavy, doncaster/england
Maybe you should have actually made sure you had some form of control as the majority shareholder Mr.Darling. Or am I expecting too much from this shanbles of a Government again.....?
- Mark, London
