Downing Street Says

Asked if people could expect an announcement on credit guarantees, the PMS replied that on this whole question of loan guarantees and the speculation surrounding it over the last 24 hours, we had always made clear that we would consider all options and do whatever it took to help businesses and households get through the global financial recession.

We were considering a wide range of options to look at the next steps in relation to what more we could do to ensure businesses and households got access to the finance they needed. We would look at this in a comprehensive way and bring forward further proposals in the next few weeks and months.

On specifics, we were examining specific remedies and not just a blanket subsidy. We wanted to build on the PBR package and this was where we hoped to be able to say more in the next few days. In the PBR we did annouce our intentions to bring forward further proposals, specifically to help those small and medium enterprises that were viable but had difficulty accessing working capital.

It was a complicated issue and Peter Mandelson had just been speaking outside No10 a few moments ago and making that point. There were a range of issues that we needed to look at. One was in relation to guaranteed loans; there were another set of issues in relation to what more we could do to help working capital; there were a set of issues around credit insurance; there were issues around equity for small firms.

So this was a complex issue. As far as the Government was concerned, there would be no irresponsible blanket guarantees. Our proposals would be targetted, thought-through and funded without imposing further unreasonable costs on businesses at this time.

Asked if a figure of 20billion was in the right ball-park, the PMS repeated that this was a complicated issue. It was not entirely clear from some of the reporting, exactly what was being speculated about, so he advised people to be patient and wait for any specific announcements. There were a range of issues that we were looking at and not only in relation to issues around working capital and guaranteed loans, but also issues such as credit insurance and equity.

Asked if this meant there would be additional Government borrowing, the PMS said people should wait for the detail of any measures before we got into that kind of discussion. The only thing he could say to people to advise them was that this was complicated and it would be unwise to focus on one specific measure. Asked if people should expect this measure tomorrow, the PMS said you should expect it shortly.

Asked to explain why it was complicated, the PMS said that the circumstances that different businesses found themselves in differed and there were a range of different factors that banks and businesses would need to take into account. So our scheme would be targetted, thought-through and it would be focussed on those businesses that we wanted to support most of all. That in particular was the small and medium-sized businesses that were viable but were having difficulty accessing working capital at this time.

Asked if the scheme would differentiate between different types of businesses, the PMS said we wanted to support viable businesses that were having difficulty accessing working capital. We were not in the business of providing irresponsible blanket guarantees.

Asked if any measures would concentrate on small and medium-sized businesses, the PMS said that we would continue to look at all options and would continue to do what was right for the British economy. The PMS said measures announced in the next few days would be specifically targetted on those viable small and medium sized enterprises who were facing difficulties getting access to working capital at the moment.

Asked if the package had been agreed or were there still details to be worked on, the PMS said he would not get into particular Government policy processes. As and when the Treasury and BERR were in a position to make announcements, they would do so.

Asked whether the Government was concerned about getting sucked into assessing whether a company was viable or not, the PMS said we needed to work closely with the banks as they were the delivery vehicles for many of these schemes and those were the sorts of decisions you would expect individual banks to make. However we did want to make sure that our scheme was well worked through and was properly targetted.

Asked for more detail on the economic discussion during Cabinet, the PMS said that the global nature of the economic difficulties that we faced were emphasised. We had seen anouncements out of Europe and the US in recent days which pointed towards the difficult global economic circumstances that we faced. We were also expecting a significant announcement from Germany in the next few days along similar lines to that which we had ennacted in Britain and which many countries around the world were now adopting.

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» Tuesday, January 13, 2009

Economy

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