With a residential population of just under 70 000 but with a daily workforce close on one million, my constituency mailbag is regularly filled with letters from business folk, often from small or medium-sized companies. In the wake of the credit crunch, many of them asked the same question: given that the government has poured billions into propping up the banks, why am I finding it difficult to secure credit for my business?
Those letters have reduced significantly over the past year but business lending remains a political hot potato. While the government demands that banks increase the level of capital they hold, they also require them to meet stringent lending targets to keep money flowing to the nation’s businesses.
In order to help us understand how banks balance these competing priorities, the business lending division of Barclays Bank invited me and my team to their Canary Wharf HQ this morning. After a discussion about the general economic climate, the team talked us through individual cases and demonstrated how they assess risk and make decisions about whether to lend. We hope to maintain this relationship with the Barclays team and have asked that they alert us to any new economic clouds on the horizon.