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Despite the Prime Minister hailing it as a success, it emerged over the weekend that only about £12 Million of the £1 Billion government loan guarantee scheme has actually been lent to companies.

Last week Gordon Brown sought to defend the government’s record on helping business by repeatedly citing the £1bn loan guarantee scheme as evidence of “what we [the government] have done for business”. He told MPs that “60,000 businesses have already benefited” from state initiatives to help cope with the credit crunch and recession.

However the 60,000 figure appears due entirely to a scheme to help businesses defer tax and has nothing to do with the loan guarantee scheme which so far as anyone can tell hasn’t yet taken off. The Department for Business is refusing to state how many companies have been helped under the scheme and the banks taking part won’t confirm whether any loan money has in fact been paid to businesses. The best we can get is a figure of £12 Million of “loans which have been sanctioned”.

I know it is early days yet so perhaps we should give the scheme more time, however it was Mr Brown who brought the subject up and as far as I am concerned the promise of £12 million loan funding isn’t exactly a great success. Neither will it make much difference overall.

But if Gordon Brown thinks this is the best evidence of the success of government initiatives then things must be much worse than we thought!

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One Response to “Gordon Brown’s Business Loan Scheme is a Flop”

  1. Henry Mason says:

    Nine months on have things got better? How are small businesses managing in getting finance?

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