Gale's View - Enterprise Finance Guarantee (March 17th 2009)
There is no such think as "Government money". Every pound spent by Gordon Brown and Alastair Darling comes out of the pocket of a resident or a business in the United Kingdom. Many billions of those pounds of yours and mine have been spent propping up failing banks that have been run by executives who in turn have failed. We need to remember that.
I mention this now because last Saturday, while driving between Herne Bay and my office in Birchington, I listened to an interview between a man from the BBC and a man from a bank; well, alright then, a man from Barclays Bank.
The subject of this interview was a Government scheme, the Enterprise Finance Guarantee, which is supposed to encourage the banks to which we have loaned all of these billions to in turn pass on some of those loans to businesses that are in need of finance. Indeed, the Cabinet Office booklet grandly entitled ""Real Help Now" that I have in front of me tells me that "If you have a business with an annual turnover of up to £25million, you could get a loan of up to £1 million for a period of up to 10 years under the Enterprise Finance Guarantee".
You could. But it seems unlikely, according to the Chambers of Commerce and the Federation of Small Business, that you will - unless you are prepared to put your home on the line.
Back to the interview. The man from Barclays spent his time trying to say how helpful they were being and the interviewer spent his time trying to get the Banker to admit that they would only lend you the money (all but 25% of which is supposed to be guaranteed by the money that you and I are shelling out to the banks for this purpose) if you were prepared to offer, in addition to the EFG, personal guarantees up to and including your home. It was a bit like trying to persuade Gordon Brown to say "sorry" but eventually the man from Barclays was forced to say "yes. We could take your house if you default on our loan".
So I now want to know two things. I want to hear from you if you are a business, large or small, operating or living in Herne Bay, Margate or any of the villages and if you have been turned down under the Enterprise Finance Guarantee Scheme, particularly if you were rejected because you were unable or unwilling to give to your bank a personal guarantee. And in a spirit of fairness and impartiality I would be delighted to hear from you if you are a bank executive in North Thanet and have authorised a loan to help out a business under this government's Enterprise Finance Guarantee..
I would also be quite interested to hear from any senior bank executive who has put his or her home on the line before accepting the multi-billion pound taxpayer bailout of the industry.
Do not misunderstand me. I think that it was right to seek to ensure that investors and savers and depositors funds were, as far as possible, secured and that our banking system was pulled back from the brink of collapse. But I also think that in return the banks ought to be treating customers - those wanting mortgages and small businesses in particular - fairly and I am by no means certain that they are.