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Money borrowing made easier
Prime minister Gordon Brown has suggested that new measures to make it easier for small firms and homeowners to borrow from banks will be in this week’s budget.
He announced that the measures would be applicable to all banks despite their history during the current crisis.
Mr Brown said: “The issue now is how the banks will resume funding to small businesses and homeowners.
“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,” he added.
Whilst Mr Brown’s ideas sound good in theory, they have been attacked by Conservative 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 £1 billion lifeline to help Britain's 4.7 million small businesses survive the current climate.
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