Oral question asked in the House of Commons, by Liz Blackman (Labour). It was answered on Wednesday, 9 September 2009 on behalf of the East Midlands Regional Grand Committee.

Industry (Government Support)

Question: Despite having huge amounts of taxpayers’ money at the onset of the recession, the banks’ behaviour can be described as variable—and that is putting it kindly. The situation has improved in my constituency, but there is still a long way to go. Will the Minister be more specific about what data are collected on banks’ activities? Is it just new loans, restructuring or the price of money? Will he also say how frequently the data are collected and how frequently, at a regional level, he meets the banks and discusses the issues?

Answer: My hon. Friend is right to focus on that key issue. The flow of credit, affordable loans and overdrafts and the ability to tap into the banks’ resources are central to businesses in the region. It is true that last year, when the banks collapsed, if we had not intervened we would have had an absolute catastrophe and the economy would not have been able to recover. We can be proud that we made those interventions. Having rescued the banks, the question is now to ensure that the money flows through. New products such as the enterprise finance guarantee scheme are starting to flow through, although there was a slow start. That was one of the reasons why I had a meeting with banks in the region earlier this year, to put to them, very forcefully, that although they were getting agreements at a national level, that was not flowing down to the regional or local level. Data are a matter for the regional finance forum, which is convened by the East Midlands Development Agency. I will write to my hon. Friend and describe what that finance forum does, the data it collects, and how we are monitoring the banks’ performance in terms of information. My regional economic cabinet intends to maintain the pressure on the banking system to deliver the help that people need—whether that is mortgages, or loans and overdrafts—to make a success of their businesses and their lives.

Secondary information