UK banks refuse £30b of loans to small businesses
LONDON: Taxpayer-supported high street banks are refusing to lend to small businesses even although they are holding billions intended for SME loans in reserve.
According to a report by the government's National Audit Office, high street banks are cruelly letting down their small business customers who request loans. As calls are growing for a bonus ban at all taxpayer-supported banks, the report is accusing banks of refusing a £30 billion lifeline to SMEs. The same banks have stated their determination to award more than £7 billion in bonus payments to senior traders within the next few weeks, angering the government and their SME customers. The Lib-Dem Treasury spokesman, Lord Oakshotte, believes the UK should copy Ireland by blocking all bonuses at institutions such as the Royal Bank of Scotland and Lloyds TSB.
According to his lordship, the Irish model is the correct way to deal with the situation as the affected banks are now a national institution and should recognise their responsibilities as such. He added, 'if the bonus cheques are written, I won't sign them off'. The report examines the financial help given to RBS and Lloyds TSB. , comparing it with the two banks' lack of lending to their SME customers. The NAO has warned there is a shortfall of around £30 billion between the amount of the government-set lending targets and the amount of money actually released to small businesses. Lloyds TSB was expected to accede to a target of £11 billion in small business loans, with its actual figures stalled at £3 billion. RBS was meant to loan £16 billion, with its true figure at an astonishing minus £6.2b. The devastating effect on both banks' SME customers is becoming evident, with many struggling or closing down. -PB News