Brian said: “The situation for many small and medium sized businesses is dire.”
“Figures produced by the Bank of England claim that lending to businesses increased by 0.9% in August, but if we dig a little deeper, we find that a large proportion of those loans were issued in foreign currency, and actual lending in pounds sterling decreased by £400 million.”
“The truth of the matter is that banks are lending less than they were 12 months ago.”
Brian is especially concerned that bank lending could be further damaged if the Basel Committee’s recommendations are implemented in December, which would require banks to build up their capital asset base, taking more money out of the economy at a time when business needs access to working capital to finance growth.
Creating better lending conditions for small and medium sized business will grow the jobs and produce the wealth the country so desperately needs and is especially vital to Northampton which experienced one of the fastest growing unemployment rates under the previous Labour Government.
Brain said: “Research suggests that 24% of businesses are struggling to come to terms with current increases in the cost of money and the new capital requirements will compound that situation.”
Brian continued: “The Government needs to recognise that the new capital requirements called for by global regulators should be balanced, and their implementation should be sensibly programmed to ensure real money is made available to support growth in the SME sector.- if that means getting tough with the banks then so be it.”
Brian also called on the Government need to go even further: “They need to provide greater choice and competition in the high street, particularly in the banking sector.”
“I appeal to the Chancellor to talk straight, talk tough and talk honestly to the banks, many of which we now own. They have a responsibility, not only because we bailed them out, but because they were a major factor in getting us into trouble.
“The message should be heard loud and clear that banks should face up to their responsibilities and recognise that it really is time they came to the aid of our nation.”