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Identifying Growth Sectors in the South East Economy

It is a pity that the Minister cannot hear all the comments being made, because it might be helpful if he could respond to them. However, I shall move on. If there is less building, the proposed infrastructure improvements that we hear so much about could be affected. Many Members here today have raised concerns about the fact that there is no corresponding development of infrastructure to cope with the planned increase in housing. Those concerns have not been addressed. Some of the growth in all sectors is being hindered by the banks. I want to concentrate most of my remarks not necessarily on what the regional development agency is doing, but on what impact such decisions by local government and national Government could have on the grand plans of the RDA. It is important that we talk about banks, because the subject was raised by the hon. Member for Milton Keynes, South-West. The banks claim to be lending money—indeed, many business men and women in my constituency have said that banks will lend them money. However, the reality is that people who are asking for money have to raise greater amounts of collateral themselves and have to jump through far more hoops than they previously thought they would have to when initial requests for money were made. The interest rates being offered are very high, much higher than 0 per cent. or 1 per cent.—well, 0 per cent. is not an interest rate. Quite often, the banks are offering a rate that is five or six per cent above the base rate. That is quite a lot of money for a business to find in a time of recession. The common factor seems to be that contracts are actually signed on the dotted line, but new terms and conditions are introduced at the eleventh hour. The hon. Member for Milton Keynes, South-West was right to say that the banks cannot absolve themselves of all responsibility without taking some of the risk. The scales have been weighted far too much in favour of those organisations. That is having a real impact on development.