Ben Chu: Move over Merlin, credit easing has arrived
Will the National Loan Guarantee Scheme be of any greater benefit to Britain’s credit-starved small businesses than last year’s lending targets? Don’t bet the house on it.
The Treasury hopes that the scheme will encourage the banks to compete for a greater share of the small businesses market. But one bank executive I spoke to yesterday said that he did not envisage his firm making any more loans in aggregate to the sector because of the scheme than it otherwise would have. The main benefit of the scheme for him was that it provided some funding insurance for his institution in the event of another crunch in wholesale credit markets.
And despite four months of haggling over the fine print, the Treasury and the banks still seem to be singing from different hymn sheets on what the agreement actually means. A Treasury press officer told me that he expected the banks to offer the cheaper loan terms to existing customers as well as new ones. But when I put this to a bank spokesman, I was told that this scheme would be limited to new borrowers.
When Adam Posen, of the Bank of England’s Monetary Policy Committee, first spoke of something called credit easing last year, he proposed a lending revolution. A new bank would be established with a specific mandate to make loans to small businesses. This would be complemented by a new agency to bundle up these loans and sell them on to investors. Sadly, what the Chancellor unveils today is not revolution, but tinkering.
- 4 #JeSuisEd: People share photos of themselves eating awkwardly in solidarity with Labour leader
- 5 Women think Irish men are the sexiest, survey finds
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Florida couple forced to register as sex offenders for having sex on public beach
Who should I vote for in the general election? Take The Independent's interactive quiz to find out which party is the right choice for you
General election: Conservatives mocked online over Boris Johnson's claim of SNP 'jockalypse'
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
General Election 2015: Sturgeon claims Scots 'appalled' by Ed Miliband's refusal to work with SNP
£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...
£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...
£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...
£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...