Newly published show the number of loans being offered by banks has continued to decline in spite of the Funding for Lending Scheme (FLS ).
The scheme was launched in August last year by the Coalition and was designed to encourage banks to lend more money to businesses and individuals in another effort to boost the flagging UK economy.
However, the Bank of England has announced that net lending fell by £2.4bn in the final quarter of last year compared with the previous three months. According to the BoE, the scheme has been slow to take off because applications for loans have to be scrutinised, it said that banks were lending more than would have been the case had the scheme not been in place.
Commenting, Stewart Hosie SNP MP and Treasury spokesman said:
“This is the coalition’s flagship scheme to kick start the economy – and it has failed to prevent an alarming slump in lending in the last three months of last year. These latest figures show that credit to households and businesses in the UK fell by £2.4 billion in that quarter.
“Small businesses are still experiencing difficulties getting finance and these figures just reflect the total lack of any coherent plan in the Treasury to get the economy moving in the right direction. We know that George Osborne is in a pitched battle with other ministers over what to slash next but if they look out of the Treasury window they will see the reality on our High Streets and homes as families, businesses and communities struggle in austerity Britain.
“The Scottish Government are delivering important measures right now within their limited powers which are helping, but the way to get Scottish businesses moving again and get real growth back into the economy is to have the economic and financial powers of an independent Scotland – which is why a Yes vote in the autumn 2014 referendum is so important.”