Sean Garman is a banker for a leading city firm and is in charge of policy and research communications for Conservative City Future. Here he seeks to rebut Andrew Lilico’s recent argument against the national loan guarantee scheme.
Britain is faced with the deepest economic crisis in sixty years. Profitable companies are going to the wall because banks will not allow them to borrow money, jobs are being lost and families are under stress. The National Loan Guarantee Scheme will insure loans to save well-performing companies which will save jobs and create financial security for British families.
Andrew Lilico has attacked the Conservative plan for reviving commercial lending as “terrible”. In his post, Andrew goes on to describe in vivid detail the problems that he sees with insuring business loans with the Government ultimately determining who gets loans and who does not.
This is wrong for many reasons.
Firstly, the key issue in the economy is how to get credit moving again. The credit crunch has lead to a hyper crunch after the collapse of Lehman and now we are in recession. The length and severity of this recession will depend on whether the banks resume normal lending. We must advocate effective policies to avoid a deeper recession and to attack the cause of the current problem.
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