Ken Clarke says that Government's loan scheme for businesses is "panic-stricken"

Shadow Business Secretary Ken Clarke was up again in the House of Commons yesterday. He is of course not able to question his opposite number Lord Mandelson in the chamber.

He asked about the enterprise finance guarantee scheme, which was launched last month and is open to businesses with a turnover less than £25 million. Companies will be able to borrow between £1,000 and £1 million. Loans can be repaid over up to ten years.

Mr Clarke swung into action:

"When Lord Mandelson announced the scheme, he said that it was “going live today”, and the Minister has just said that it is open for business—but does he not realise that he is lucky if he has found a small business that is aware of the existence of the scheme, and very lucky if he has found a bank that believes that it is operating the scheme at local level? Instead of producing a series of measures in a panic-stricken way, as the Government have done in recent months, would it not have been better if they had speedily adopted our policy of a £50 billion loan guarantee scheme for businesses of all sizes, and had shown some competence in getting it into practice at the speed required?

Ian Pearson: No, it would not have been a good idea to implement an uncosted, untargeted scheme. What the Government have done is to introduce the enterprise finance guarantee, which is specifically targeted at companies with a turnover of up to £25 million. The right hon. and learned Gentleman will be aware of the working capital scheme that we are also introducing. It will provide working capital support for businesses in the economy. That will apply to a portfolio of companies with a turnover of up to £500 million. That is real support for business, and it is working. We need to do more to market existing products to the business community. I would like to think that the right hon. and learned Gentleman and I shared an interest in wanting to do that, and in wanting to get the maximum possible publicity for the real support available to companies to help them through the recession."

I must say that while I wasn't too sure, it is good to have Mr Clarke's debating skills back on the front bench and in frontline politics.

Tom Greeves