Liberal Democrat Leader Calls for New Government Bank

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Liberal Democrat Leader Calls for New Government Bank

Wed, 19 Nov 2008

The Liberal Democrats leader, Nick Clegg, has called on the government to lend directly to businesses and homeowners as banks fail to live up to their promises to lend more. Mr Clegg labelled the government ‘supine’ and ‘weak’ for failing to force banks to act. He also suggested that there is a ‘growing public anger’ after billions of pounds of taxpayers’ money was issued to banks who have failed to relax lending criteria, despite the multi-billion pound bail out of the UK’s three largest banks including a condition demanding a return to the level of funds available to small businesses to those levels seen in 2007.

Mr Clegg has proposed a system whereby either a new government bank is created, or the government lends directly to companies through local authorities or the Post Office.

Mr Clegg said, ‘There is growing anger that the banks aren't lending money. The government should put pressure on the banks and encourage them to lend. If they're not prepared to get tough with the banks we need a plan B. You could lend directly into the economy - it is a huge step, but if the government isn't prepared to lift a finger we need to do something and do something fast. We have to look at ways to get money back into the real economy.’

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