Brown pledges to boost bank lending

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Indy Politics

Gordon Brown today promised to take "all measures necessary" to get the banks lending again to small businesses.

The Prime Minister said that ministers were ready to bring forward proposals "very, very soon indeed" to get the banks to "accept their responsibilities".

In the Commons, Mr Brown repeatedly came under fire at Prime Minister's Questions over the failure of the banks to restore credit lines to small firm's, despite the Government's bail-out of the banking sector.

Tory leader David Cameron warned that businesses were being "strangled" while Liberal Democrats leader Nick Clegg accused the Prime Minister of being "complacent" in the face of the banks' refusal to co-operate.

Mr Brown told MPs that ministers and officials were meeting the banks and building societies "almost every second day" to try to resolve the problems.

"We will be bringing forward proposals very, very soon indeed," he said.

"The banks have got to accept their responsibilities. We have done what we can, they have to accept their responsibilities to act in a manner that is responsible and fair.

"We will take all measures necessary to help small businesses get the loan capital they need."

Mr Cameron, however, complained that Government action was not working and he urged the Prime Minister to establish new institutions to underwrite lending to business.

"What has 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," he said.

"This is about small businesses in the real world that are struggling and want to know how we are going to get credit moving again."

Mr Clegg said that firms were being "forced out of business overnight" because the Government was too weak to act.

"The bankers can't believe their luck. They have got billions of pounds of taxpayers' money, they can keep their bonuses and they don't have to lend to companies," he said.

As Mr Brown and Mr Cameron clashed again over the Government's plans to cut taxes and raise spending to try to revive the flagging economy, the Prime Minister took a sideswipe at shadow chancellor George Osborne's warning that it could lead to a run on the pound.

"I would advise Conservative members not to talk down the pound," he said.

"I would advise Conservative members to take the advice of Lady Thatcher who said that trying to help the speculators and talk sterling down is the most un-British way."

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