Prime Minister's question asked in the House of Commons, by Lord Cameron of Chipping Norton (Conservative). It was answered on Wednesday, 10 December 2008 on behalf of the Prime Minister.

Engagements

Question: I join the Prime Minister in paying tribute to Lance Corporal David Wilson. His family, including his fiancée, Michelle, and his young daughter, Poppy, have suffered a devastating loss, and the whole House will want to send its condolences to them. I am going to ask the Prime Minister again about the need to get banks lending to businesses. Putting taxpayers' money into the banks was something supported by all parts of the House in order, yes, to rescue the banking system, but as the Governor of the Bank of England says, the purpose of recapitalisation was not"““merely to protect the banks””," but to ensure that"““the flow of lending to the real economy could continue at normal rates””." Does the Prime Minister accept that on those terms, his recapitalisation has failed? When is he going to change it?

Answer: The first point of recapitalisation was to save banks that would otherwise have collapsed. We not only saved the world—[Laughter.]—saved the banks and led the way—[Interruption.] We not only saved the banks—[Interruption.] ...Not only did we work with other countries to save the world's banking—[Interruption.] Not only did we work with other countries to save the world's banking system, but not one depositor actually lost any money in Britain. That is the first thing. The second thing is to get the banks into a position in which they can resume lending, and that is why interest rates have come down by 3.5 per cent.—something that the Opposition said was not possible, but which actually happened. The third thing to do is to work to remove all the barriers to interest rates and to the lending of money by the banks, and that is what we are doing in discussion with the banks now. The Opposition may not like the fact that we led the world in saving the banking system, but we did.

Secondary information