Need for Action on Bank Lending As Pressing As Ever

3.56.00pm GMT Wed 3rd Feb 2010

Borders Parliamentarians Michael Moore MP and Jeremy Purvis MSP have slammed Ministers for their failure to ensure that small businesses are able to access essential financial support after FSB Scotland revealed that almost 2/3 of owners have used personal savings or credit cards to stay afloat over the past year.

One in three of the businesses surveyed by FSB expressed their belief that the way banks lend will have a profound effect on their recovery. A similar proportion reported that interest rates charged on bank facilities changed during the same period, with only one in 6 seeing charges decrease despite the Bank of England base rate falling to a historic low.

During a Parliamentary debate he secured on support for the textile sector last year, Mr Moore highlighted the problems that the withdrawal of lending, overdraft facilities and other services such as credit export insurance have caused for the Borders’ manufacturing industries.

Commenting, Mr Moore said:

‘Just as many sound businesses were damaged by the reluctance of the banks to lend when the crisis was at its worst, continued problems in accessing essential support will mean that firms across the south of Scotland will not be in a position to take advantage of any economic recovery.

‘Ministers have been been talking tough on this issue for months but it is clear that good intentions are not enough – the failure to ensure that finance is available on reasonable terms will undermine the Borders economy at a time when the future of many local firms remains in the balance.’

Mr Purvis added:

'Michael and I have made a clear case to Scottish Ministers in our budget discussions that more needed to be done to support business access to finance. The need is pressing and we are confident that if the Liberal Democrat calls are heeded then businesses in the Borders will benefit.'