Time to take the thumbscrews off the banks

The biggest risk to the economy is not government cuts, says John Redwood, but lack of credit. There’s plenty ministers can do to get companies, and people, borrowing again

This time it is different. Normally the UK economy bounces back from a downturn, and we have several years of rising prosperity. Today there are many experts who fear another downturn hard on the heels of the big recession we have just lived through. I welcome the government’s decision this week to write about the funding gap for business, and to float ideas including more banking competition. They will need to move quickly and purposefully from consultation to remedies to fuel the recovery.

To understand why some peddle fears of another fall in output — a ‘double dip’ — we need to know why we are here. People in the UK are used to rising living standards. Both Margaret Thatcher and Tony Blair presided over a decade of higher average incomes.