According to this article in Insider, Chancellor George Osborne is set to unveil credit easing schemes which could release £40bn in loans to small businesses.
It is speculated that the government could underwrite banks’ borrowing with loans of £20bn involved at first – though this could double. The small business scheme is said to be focused on companies turning over under £50m. It is also reported that Osborne is set to announce a multibillion-pound infrastructure investment programme with cash coming from British pension funds and Chinese investment though up to £5bn could be paid for from further public spending cuts.
John Longworth, director-general of the British Chambers of Commerce (BCC), said: “The credit easing package is a big shot in the arm for Britain’s real economy. As the BCC’s latest economic forecast shows, the UK’s prospects for growth remain shaky, and measures of this size and scale are urgently needed to sustain a credible recovery. Credit easing measures must be implemented quickly in order to boost business confidence and increase the flow of finance to viable and growing companies.”
My problem with this is pretty straightforward – where has this money suddenly come from and why wasn’t it available earlier? Why have small businesses had to suffer for the mistakes of the banks and the unwillingness of government to get involved? If, as Margaret Thatcher once said, Britain is a nation of shopkeepers, surely those people, the lifeblood of the UK economy, should have been protected and supported before the fat cats in the city.
I fear that this is not the answer, but merely an attempt by an unpopular, unelected Chancellor to prove that he is taking positive action on the economy; worst of all, how can we be sure that this money exists?