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Banks: Finance

Volume 493: debated on Monday 1 June 2009

To ask the Chancellor of the Exchequer if he will consider the merits of directing those banks in public and part-public ownership to increase lending to projects promoting a sustainable future. (270347)

UK Financial Investments Ltd. (UKFI) has been set up to manage the Government’s investments in financial institutions as an active and engaged shareholder, operating on a commercial basis and at arm’s length from Government.

The framework document between HM Treasury and UKFI sets a requirement that UKFI will not intervene in the day-to-day management decisions of investee companies. The companies will retain their own independent boards, which will manage the banks and determine their strategy. Decisions relating to whether to lend to individuals or firms, and the terms of those loans, remain commercial matters for banks.

However, where financial institutions take part in the Asset Protection Scheme, the Government have negotiated quantified lending agreements. RBS and Lloyds have, as part of this, agreed to make substantial extra lending available to individuals and firms in the coming year.

HM Treasury and UKFI does not comment on individual products offered by or commercial decisions taken by its investee companies.

To ask the Chancellor of the Exchequer what has been the cost to the public purse of the Government buying shares in banks. (276619)

I refer the hon. Gentleman to the answer given on 28 April 2009, Official Report, column 687, to the hon. Member for Gosport (Sir Peter Viggers).