13 Oct 2009

Glasgow East MP John Mason has raised concerns over access to finance for East End small business, as reports suggest executives at both RBS and Lloyds are privately admitting that they are unlikely to meet their commitment to an additional £39bn of lending. The banks had signed up to this when the UK Government stepped in to insure their toxic assets in March of this year.

Commenting on this issue, John Mason said:

“Small and medium sized businesses provide many of the jobs in the East End of the City, so naturally I am very concerned.

“Lloyds and RBS have over two thirds of the market between them. That is not good for competition and not good for Glasgow’s small businesses.

“Last month, a report by the Scottish Government’s Chief Economist Dr Andrew Goudie made clear that the slightest policy change from either of these banks would have a serious impact on small businesses across the country.

“While the Scottish Government has taken steps toward the establishment of a Scottish Investment Bank – which may offer a new route to finance for small businesses – the UK Government has not used its shareholding in RBS and Lloyds to effectively encourage these banks to back small businesses and many have seen their overdrafts cut, loans rejected and charges increased despite running successful and profitable businesses.

“Banks need to be careful with the money they lend, but it is not acceptable to allow the small businesses which drive our local economies to suffer because of bad banking practices.”