George Osborne just unveiled a new measure that would boost lending to hurting businesses. The £40bn plan is likely to be the main focus of the Tuesday Autumn Statement. This will be part of the cornerstone program, along with plans to lower rail fare rises and freeze fuel duties, in order to help consumers.
As Mr. Osborne told the BBC on the One’s Andrew Marr Show, ‘The government will underwrite the loans the banks make to small businesses in order to cut the interest rates the small businesses pay.We are making available £20bn for the National Loan Guarantee Scheme; however, it sits within an envelope that could be as large as £40bn.”
He continues by saying, “These are guarantees. We are not borrowing this money; we are underwriting the loans that are being made.”