Help for businesses in 'few days' (From The Northern Echo)

Help for businesses in 'few days'

4:25pm Tuesday 13th January 2009

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Ministers will announce a package of measures "within the next few days" to help small and medium sized businesses which are having difficulty getting access to credit, Downing Street said.

Reports have suggested ministers are considering a loan guarantee scheme worth as much as £20 billion, but Prime Minister Gordon Brown's spokesman told reporters that the Government was also looking at wider issues affecting businesses.

In a daily briefing at Westminster, the spokesman said: "Our scheme will be targeted, it will be thought through, it will be funded and it will be focused on those businesses that we want to support most of all.

"That in particular is small and medium sized businesses which are viable but are having difficulty accessing working capital at this time."

The spokesman added that the Government was not proposing to offer "irresponsible blanket guarantees" for all business lending.

The package of proposed measures to help businesses formed part of a discussion on the global economic crisis which dominated the regular Cabinet meeting at 10 Downing Street.

It is thought an announcement could be made as soon as Wednesday, with widespread expectations that the state will effectively offer to "insure" banks against firms defaulting in return for a fee.

If confirmed, the plan would be similar to one endorsed by the Tories - although they have called for a £50 billion commitment.

Mr Brown's spokesman declined to give specific details of the scheme under consideration, but said it would build on support for smaller businesses announced in Chancellor Alistair Darling's Pre-Budget Report (PBR) in November.

The spokesman said: "We are examining specific remedies, not just a blanket subsidy."

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