Justin Tomlinson MP today welcomed the announcement by the Chancellor of two new policies to further boost lending to small businesses, enterprise and individuals.
The schemes have been launched by the Chancellor and supported by the Governor of the Bank of England, Mervyn King. Together, the schemes are worth tens of billions of pounds to our economy and will help businesses access loans in the face of eurozone instability.
The first builds on the existing National Loan Guarantee Scheme, which cuts the cost of credit for small businesses. Whilst a great success with thousands of businesses already benefitting from lower interest rates, the scheme does not cover larger companies or mortgage lending.
To build on the scheme therefore, the Government has announced the new Funding for Lending scheme, which will reach far more widely to supporting credit for the whole economy. It will help banks weather the storm of instability in international markets but only in return for more lending across the economy as a whole. This will help larger employers and those looking for a mortgage.
Alongside this, the Bank of England will now activate a new bank liquidity scheme aimed at boosting lending and helping the country deal with the short-term risks from global market instability. This will be worth £5 billion a month to our economy.
Both schemes support the Government’s desire to achieve fiscal responsibility in our economy. It is thanks to this approach that Britain has earned its international economic credibility, which in turn allows us to be able to consider new schemes like this.
Britain is now seen as a safe haven from the debt storm raging in Europe. Our credible deficit plan has the backing of the IMF, the OECD, the CBI and many others, and we are already seeing real progress: we have cut the deficit we inherited by a quarter, a remarkable achievement for two years in Government.
Justin Tomlinson MP said “It is good to see the Chancellor making the most of this hard-earned credibility to deploy new firepower to defend our economy from the crisis on our doorstep. These schemes will provide funding for banks to lend to families aspiring to own their own homes and businesses that want to expand. Such business expansion is key to economic growth and falling unemployment.”