Oral question asked in the House of Commons, by Stewart Hosie (Scottish National Party). It was answered on Tuesday, 6 December 2011 on behalf of the Treasury.

Bank Lending and Credit (Businesses)

Question: Bank lending funds business investment, so I welcome some of the measures that the Chancellor has announced. However, if the lack of lending is a consequence not of availability or cost but of reduced aggregate demand, and if business investment continues to fall or be sluggish, is he not at all concerned about the fact that the vast majority of next year's gross domestic product growth—0.7%—will be driven by business investment? Should that happen, where would it leave his growth forecasts?

Answer: Of course, the components of our GDP forecast, like the forecast itself, are produced by an independent body, the Office for Budget Responsibility, so it is not my assessment of business investment next year but the OBR's. I am confident that if we invest in the infrastructure that we set out last week, provide support for seed investment through the enterprise investment scheme that we have created and make it easier to hire people, as we propose to do, we will encourage business to invest, grow and take people on.

Secondary information