BANKS MUST BE MADE TO LEND TO BUSINESS

12.00.00pm GMT Thu 12th Feb 2009

Speaking to the St Austell Chamber of Commerce this week, Stephen Gilbert, the Lib Dem Prospective MP for St Austell, has said that the national economy needs dramatic action from Government to help businesses in the town.

Stephen Gilbert said: "To date the Government's measures have to been too little too late. Banks still aren't lending, consumer confidence is at an all time low and the currency markets are very worried about the prospects for the Pound."

Stephen said the affects of the recession were clearly being felt by business in St Austell.

He added: "What started as a crisis in London banks is now being felt by small businesses here in St Austell. The high-street banks are not lending new money to businesses and in many cases businesses have seen their existing financial facilities taken away, or have had additional charges applied."

"In one case, a bank was demanding a £600 arrangement fee and then proposing to charge interest at 13% above the base rate for an overdraft service that until that point had been free with interest at only 1% over the base rate. It's simply unacceptable."

Stephen Gilbert told the Chamber of Commerce members that he wanted to see dramatic action to get banks lending, he said: "The weakest banks need to be nationalised - and then directed to do what is in the country's best interest and that includes lending to local businesses. We've got a ridiculous situation at the moment where despite the tax-payer owning up to 70% of some of the banks, they are still not lending to businesses. We also need legislation to clean up the short-term culture in the City and bring an end to bonuses for failure."