No credit where it’s due

However hard he tries, and however much taxpayers’ cash he throws at the problem, Gordon Brown just can’t seem to get credit flowing to UK businesses.  Here are details of two surveys, released today, from today’s FT:

Conferederation of British Industry survey: “While 63 per cent of businesses who had sought new credit said its availability had worsened in the past three months, 59 per cent said they expected it to be harder to access in the next three months.”

Federation of Small Businesses survey:
“Many small businesses told the trade association that banks had turned down their applications for government-guaranteed credit. Others complained that public sector bodies were ignoring a government pledge to pay in 10 days. And almost all said that a 2.5 percentage point cut to value added tax, costing taxpayers £15bn ($22bn), had failed to improve sales.” On some level, the banks’ actions are understandable.  They’re hoarding cash, rather than lending, so as to get their balance sheets looking healthier.