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The Economy

The hon. Gentleman is simply wrong. In fact, I am very concerned about the lack of credit for important and viable businesses, and that is why we are taking a series of steps and measures to try to support them and help them to get the credit they need. However, I remind him that the credit crunch is global, and that there has been a reduction of £100 billion in the lending in this country by foreign financial institutions. Near my constituency, for example, an important development for the area has been jeopardised because the Anglo Irish bank has pulled out. Right across the country, there has been a reduction in lending as a result of the credit squeeze and of the fact that banks are no longer lending to each other. What do we need to do? We need to get banks lending again, and we are taking a series of measures to do that. The first such measure, obviously, was to make sure that the banks were still standing. Without banks, there can be no bank lending. Our recapitalisation of the banks in October was critically important to keeping them lending. The Opposition supported that at the time, but they have prevaricated over the matter since then. They have made it clear that perhaps they no longer support what I believe was a hugely important measure to support our economy’s financial stability. The second measure was to make sure that the banks were strong enough to withstand what is now a global recession. We had to be certain that they were strong enough to deal with their capital and liquidity problems, and with their toxic and problem assets. For that reason, we have put in place the asset protection scheme, which has very clear and binding lending agreements. As a result, banks are now pledged to deliver more lending to businesses and mortgage holders in the coming financial year than they did in the preceding year. We need to monitor those lending agreements to make sure that the money gets out to businesses, in the constituency of the hon. Member for Billericay (Mr. Baron) and across the country. They need that money, as does our economy.