BANKS are turning “the tap back on” when it comes to lending to businesses, a Government Minister said yesterday.
Employment Minister Tony McNulty was in Durham City at an event bringing together representatives from banks and the public sector with small business owners.
Businesses were able to raise lending issues affecting their companies and were given information and advice on sources of additional lending.
Speaking before the meeting, Mr McNulty reassured businesses that banks were legally bound to start lending again, at a rate of an extra £11bn over the next year.
But he said it was crucial that businesses understood what support was available to them from banks and the Government and how they could access it.
He said: “People would not expect us to tell banks which companies they should be supporting, but they are legally bound to increase their levels of credit and support to businesses.”
There have been some complaints from small business owners that Government support packages were difficult to access.
In February it emerged that the North-East’s Transitional Loan Fund, set up by the Government to help small to medium-sized businesses was swamped by applications.
Mr McNulty said: “I think the support packages are properly focused and getting better and better.
“There are two things you can do: one is to throw money at things or alternatively take a bit of time to get things in place properly that will support people in ways they need.
“The image is we are making announcements and nothing is happening, when we are trying to get sharplyfocused, well-designed support that ensures companies are sustained.”
Mr McNulty pointed to the number of businesses in the North-East that had taken advantage of measures allowing them to defer payment of taxes and business rates.
He said: “There are 3,000 companies in the North-East allowed to delay tax payments. When people are on the edge it can make a difference to survival or otherwise.”
And he did not rule out some of the Government support measures continuing even when the country came out of recession.
He said: “The one key lesson from adversity such as this is to learn what works and to decide whether there are things that should prevail as a new model after the recession.
“We need to look to the future and see what the North- East economy may look like when we come through this.
“The financial sector is going to be a very different beast than before the downturn.
“The crucial thing must be to not just get through the downturn, but to learn every single lesson about what worked and what didn’t.”
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