WE BAILED YOU OUT NOW DO YOUR DUTY!
● UK virus death toll hits 2,352 ● Mass NHS testing within weeks
BANKS were last night urged to “repay the favour” of the 2008 bailout as the virus crisis deepens.
They were told they must come to the aid of the taxpayers who funded their huge Government rescue deal 12 years ago.
And they were warned not to hammer customers with “unacceptable” rip-off charges
for giving emergency Governmentbacked loans in the economic chaos caused by the pandemic.
Some lenders are accused of demanding interest of up to 30 per cent for lending to firms under the Treasury scheme to support the economy. And a report revealed that nearly a million small companies face running out of cash in four weeks.
Chancellor Rishi Sunak and senior financial chiefs wrote to all UK banks to “make sure the benefits of the loan scheme are passed through to businesses and consumers”.
They insisted banks had to “repay the favour” of the lifeline they were thrown during the 2008 financial crisis by treating customers fairly now.
Business Secretary Alok Sharma said: “It would be completely unacceptable if banks unfairly refused funds to businesses in difficulty.
“Just as the taxpayer stepped in to help the banks back in 2008, we will work with the banks to do everything they can to repay that favour and support the businesses and the people of the UK in their time of need.”
Last year officials calculated the cost of the 2008 bailout to taxpayers as £137billion, with £27billion still outstanding.
Speaking at yesterday’s Downing Street briefing after Britain suffered its highest daily death toll so far taking the total to 2,352, the Cabinet minister added: “Banks are working hard to support the UK, including through mortgage holidays and increased credit facilities.
“Loans for businesses are also being issued through the Covid Business Interruption Loan Scheme.
“The Chancellor, together with the Bank of England and the Financial Conduct Authority, wrote to the chief executives of the UK banks to make sure the benefits of the loan scheme are passed through.”
High street banks were reported to be charging interest of up to seven per cent on emergency loans to business while some approved lenders were said to be demanding as much as 30 per cent.
The rates were far above the Bank of England’s base lending rate, which was slashed to a historic low of 0.1 per cent to aid the economy. Mike Cherry, chairman of the Federation of Small Businesses, said: “We can’t have a situation where banks are approached by small firms and lenders offer up ‘business as usual’ products. This is not business as usual.
“Small firms were promised interest-free, fee-free, Governmentbacked support from banks and it’s not being made available.” Acting Lib
Dem leader Sir Ed Davey said: “Too many small businesses report long delays, high interest terms and being asked for personal guarantees.
“Having given the banks unprecedented support just a decade ago, the British taxpayer demands better. It is the Government’s responsibility to ensure banks play ball.”
A Treasury spokesman confirmed: “The Chancellor is clear the purpose of the Government guarantees is to make these loans as accessible as possible.”
A report from the Corporate Finance Network of accountants predicted that almost a fifth of Britain’s five million small businesses will not be able to survive the next month despite the loan scheme.
Nearly four million employees could lose their jobs within four weeks. Meanwhile shares in Britain’s biggest banks fell heavily yesterday after they scrapped billions of pounds in dividend payouts to shareholders.
And Treasury sources said the Government will borrow £45billion this month to support the economy, £29billion more than expected.