Wednesday, December 16, 2009

Need to Get the Banks Lending Again

Figures released yesterday showed that the number of new business start ups in Scotland are down 16% on the same time last year. In Q3 2008 there were 4,598 in 2009 this was down to 3,861.

Speaking on this issue Alistair Carmichael MP said:

"These figures show just how hard the recession is hitting Scotland’s small business sector.

"Labour has effectively nationalised two of Scotland’s largest banks, but they have done little or nothing to get them lending again. This has left businesses struggling without the credit they need.

"Gordon Brown and Alistair Darling should be standing up to the bankers who did so much to cause the current recession. But instead they are letting them get away with massive bonuses while they leave Scotland’s small business sector high and dry."

There have been affects in and around West Lothian of how hard businesses have found it to secure capital from the lenders to keep afloat. There are more empty retail and production premises around now than in the lead up to last Christmas.

Speaking to some of the local retailers in Bathgate they have said that yes the turnover is affected as people are less willing to part with their money. But they are also finding it harder to get access to money from the bank to help either tide them over tough times or to expand stock levels or opportunities.

The two main banks that they use are the Scottish banks RBS and HBoS which are both owned by the people. The Chancellor has said the banks need to start acting like banks again, that means lending money to business to help aid the recovery. I know that Vince Cable is lashing out at the bingo hall banking practices that led to this mess, but Vince knows that there has to be some level of risk in lending money to business to ease our economy out of recession. The banks are not yet doing so, and so it is that new businesses are not able to get going to replace the ones that sadly have gone by the wayside.


cynicalHighlander said...

Firstly these banks are only Scottish in name as they dealt globaly and all previous taxes went to the treasury.

Secondly as they are still insolvent corporate businesses they don't have the liquid funds to lend as they hold £4.2 trillion in foreign assets on paper!

They are bankrupt and are only in existence by taxpayers funding.

Stephen Glenn said...

That may be the case but our Government bailed the out so that they could continue to go about the job at hand, i.e. banking. As the Grandson of a Bank Manager I'm sure he would be turning in his grave at the way the banks are failing to carry out their primary function, due to the bingo tactics.

cynicalHighlander said...

But thats like asking a shop to give you tick when they dont have the collateral to reduce some of their stock for a definitive period resulting in the shop defaulting on their obligations to their creditors. Capitalism rules.


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