---

The Economy (Supporting Business)

Let me come on to lending directly. Although we have taken action, which has been opposed by the Conservative party, at a macro-economic level to provide a stimulus to the economy, it takes time to have effect. In addition, the Bank of England has reduced interest rates to the lowest level in our history, at 0.5 per cent., £125 billion of quantitative easing has been provided, and the current sterling exchange rate is highly competitive internationally. Those measures take time to filter through to the real economy, which is why help is needed now. If the hon. Gentleman wants to question me further about lending, I would be happy to take a further intervention. As he will be aware, a number of banks have announced plans to increase lending to households and businesses this year. HSBC will make £15 billion in mortgages available in 2009, and is allocating £1 billion in extra loans to small and medium-sized enterprises in the UK. Barclays recently said it would lend a further £5.5 billion to businesses this year, on top of a similar amount to individuals, and Northern Rock and several other lenders are following similar courses. As the hon. Gentleman will be aware, we have ensured that banks that have received Government support commit to freeing up credit as part of the contractual terms. As part of their participation in the asset protection scheme, Lloyds Banking Group and RBS have been required to sign legally binding agreements. Lloyds will lend about £11 billion extra to businesses this year and next and RBS about £16 billion, at commercial terms. That represents a significant pool of new lending available to business.