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MP: Sell banks to boost business lending

Date Added: 14/03/2013  

An MP has called on the government to consider selling banks to improve business lending to the UK's small to medium-sized enterprises (SMEs).

Canterbury and Whitstable MP Julian Brazier stated the coalition ought to consider breaking up and selling off publicly-owned banks as soon as possible.

Speaking to fellow MPs in the House of Commons, he explained how he has regularly approached by constituents who have been unable to borrow to fund worthy projects.

Business lending in the UK dropped by more than £2 billion in the final quarter of last year, despite the coalition's efforts to stimulate the sector through the launch of the Funding for Lending Scheme, which was set up in conjunction with the Bank of England.

"Small businesses must be able to finance new projects and kick-start growth. During the bailouts the banks agreed that they would do this. We can't repair our economy if publicly owned banks are going to drag their feet," Mr Brazier was quoted as saying by This is Kent.

Responding to his query in parliament, chief secretary to the Treasury Danny Alexander stated it was "necessary" to clear up the "mess of the under-regulated, overheated banking system" that was set up under the Labour government.

"We are working as hard as we can to get those banks in good order and we are making progress," he said.

Mr Brazier stated there are a lot of SMEs in Canterbury and the surrounding area that have a good business plan, but are unable to secure the loans they need in order to grow.

"If mainstream banks won't help small businesses, it's time to get rid of the taxpayers' liability," he said.

Payday loan specialist Wonga recently confirmed it is to broaden its business lending options in a bid to support more UK SMEs. It will now offer loans of up to £30,000.

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Posted by Julie Cutts

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