Dundee SNP

“HIGH PRICE OF LOANS CRIPPLING BUSINESS”

Commenting on the announcement that the Bank of England’s Monetary Policy Committee (MPC) is to keep interest rates at a historically low 0.5% and continue with a £75bn programme of quantitative easing, SNP Treasury spokesperson Stewart Hosie MP said:

“Alistair Darling’s attempts to jumpstart the economy are not working, and indeed he admitted that recovery is likely to take much longer than he predicted in November.

“The real difficulty is the cost of borrowing. Every day, I hear reports of loans being offered at well above LIBOR. This is crippling business.

“Last month, the MPC approved a radical programme of quantitative easing but this is yet to have the desired effect of getting credit markets moving.

“I have long held reservations about the effectiveness of printing money. While it is early days, the Japanese experience in the 1990s – where bank lending actually decreased – offers little encouragement.

“One thing we do know is that the UK Parliament was denied the opportunity to formally debate whether this tactic would work before it was introduced.”

‘UK ECONOMIC SITATION IS CRITICAL’

Commenting on the announcement today (Thursday) of a further 0.5% cut in interest rates by the Bank of England’s Monetary Policy Committee, SNP Treasury Spokesman Stewart Hosie MP said:

“The UK economic situation is now critical. Many of the UK Government’s support schemes are still in the planning stages and this latest interest rate cut confirms that banks are still not lending.

The MPC have also announced the Bank of England will proceed with quantitative easing. Commenting, Mr Hosie said:

“Similar measures undertaken in Japan in the early 1990s did not have the desired effect. Indeed, bank lending actually declined after the measure was enacted.

“While I would not challenge the MPC’s independence, I have grave concerns that Parliament was denied the opportunity to discuss this radical measure.”

‘CHANCELLOR MUST CONSIDER SERIOUS IMPLICATIONS’

Commenting on the announcement today (Thursday) of a further 0.5% cut in interest rates by the Bank of England’s Monetary Policy Committee, SNP Treasury Spokesman Stewart Hosie MP said:

“As we head into a recession, any action to make it as short and shallow as possible is welcome, but the scale of this and recent cuts shows how critical the situation has become and confirms that the banks are not yet lending again to businesses and individuals.

“The UK Government must take further measures to ensure money starts flowing. In addition to this cut they must review the 12.5 % dividend they are expecting from the recapitalised banks.”

In response to reports the Chancellor is considering printing more money to help boost the economy, Mr Hosie added:

“I would urge the Chancellor to think carefully about the very serious implications this move. What Treasury officials will describe as quantitative easing will conjure up images of wheelbarrows full of worthless cash for everyone else – and risks future inflation and a further serious weakening of sterling.

“In addition to monetary policy, the economy needs a fiscal stimulus. Analysis produced by the Scottish Government suggests that a programme of capital investment of equal value would have safeguarded twice as many jobs as the recent VAT cut.

“If the UK Government was really committed to supporting the Scottish economy, they would scrap their planned £1 billion cut to Scotland’s budget in 2010 and 2011 which pose a major threat to jobs and services in Scotland.”

Commenting on the announcement today (Thursday) of a further 1% cut in interest rates by the Bank of England’s Monetary Policy Committee, SNP Treasury Spokesman Stewart Hosie MP said:

“As we head into a recession, any action to keep it as short and shallow as possible is welcome.

“However, this cut comes one month after a 1.5% cut and just one day after the Prime Minister’s 11th hour mortgage plan announcement.

“In serious times, Scotland needs a Government who will offer a considered approach. While the Scottish Government has laid out a 6-point economic recovery plan, London Labour appear to lurch from one on-the-hoof policy to another.

“If the UK Government was really committed to supporting the Scottish economy, they would scrap their planned £1 billion cut to Scotland’s budget in 2010 and 2011 which pose a major threat to jobs and services in Scotland.”

“IT IS NOW UP TO THE GOVERNMENT TO ENSURE FAIR PLAY”

Commenting on the announcement of a 1.5% cut in interest rates by the Bank of England’s Monetary Policy Committee, SNP Treasury Spokesman Stewart Hosie MP said:

“It has been clear for quite some time that recession and not inflation is the threat we face so a cut is welcome.

“Banks must pass these rate cuts on to borrowers and mortgage holders. It is now up to the UK Government to ensure that – after massive recapitalisation, guarantees on inter-bank lending and a cut in the base rate of interest – banks play fair and start lending again to individuals and small businesses at reasonable rates.”