Engagements

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 11:30 am on 21st January 2009.

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Photo of Gordon Brown Gordon Brown The Prime Minister, Leader of the Labour Party 11:30 am, 21st January 2009

The issue is the extension of lending; that is the issue before us. The agreements that we have signed with the banks already are, I believe, agreements that are being honoured at the moment. I have to say to the right hon. Member that the problems is that when the banking crisis started, foreign banks that were operating in Britain reduced their capacity in Britain. Non-banking institutions that were lending in Britain for mortgages and companies reduced their capacity, so even if the Royal Bank of Scotland, Lloyds TSB, Barclays or those other banks increased the capacity substantially, we would have suffered a loss, just as every other country has suffered a loss of foreign capacity. That is the problem that we are trying to deal with. The problem is the resumption of lending; that is still the problem that has to be dealt with, whatever the status of the banks.

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