Andrew Turner, the Island’s MP, today called into question the Government’s £20 billion loan guarantee scheme.

The Government’s scheme is designed to restart the flow of credit from the big banks to small businesses. The Government’s recent announcement of £20 billion falls far short of what is needed. Mr Turner said today that the Government’s scheme was “Too little, too late”. Since November of last year, the Conservative Party has been calling for a much broader £50 billion National Loans Guarantee Scheme to help employers of all sizes get access to the credit they need.

The Government’s announcement also failed to define which businesses would qualify for the scheme. Mr Turner expressed concern that it may not be extended to such vital and successful businesses such as local Post Offices, farms and transport companies on the Island, which are frequently exempt from Government support of this kind.

Mr Turner said:
“It is one thing to promise to get credit flowing but you can’t do it by half measures. The Government has misjudged badly the amount of support that the banks will need to get credit flowing to small businesses. Part of the problem has been created by the mixed messages the Government has been sending to the banking sector. On the one hand they encourage the banks to amass capital, and on the other they demand that normal credit lending practises resume. With the current plan, £20 billion will not be enough to get our economy back on track. The Government should increase the loans guarantee fund. This could be a total disaster for small businesses here on the Island if the scheme leaves them high and dry during the coming recession. I want the Government to guarantee that no viable Post Office, farm or transport company will be denied access to the credit they need.”
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