Prime Minister's question asked in the House of Commons, by Gavin Strang (Labour). It was answered on Wednesday, 8 October 2008 on behalf of the Prime Minister.

Engagements

Question: Now that the Government have brought forward such a bold scheme of support for the banks, does the country not have the right to expect the bankers to show a bit of courage and resume normal lending among themselves and to the wider community?

Answer: My right hon. Friend is absolutely right. What we are making possible to happen today is for that resumption of lending to take place. We are providing a guarantee for medium-term funding. I am thinking of the small business that is looking for funds for investment or the small firm with an overdraft that wants the help that a bank can usually give. I am thinking of the mortgage holder who wants to buy the next home or the first-time buyer. That is the cash that can be provided by a good banking system. To have it on a sound footing is an essential element of the programme, but to resume the medium-term funding is one of the least publicised elements of the programme that we have announced today. Not only will we do this in Britain—the £250 billion guarantee—but I have talked to my European colleagues over the past few days and I have hopes that this can become a wider scheme that other countries will take up. I hope that we will show that we have led the world in changing the terms and conditions on which we can help to renew the flow of money in the system.

Secondary information