Britain's bailed-out banks have broken promises to lend to small businesses, a group of MPs have warned. A report by the Public Accounts Committtee said that attempts to use public ownership of banks to force them to increase lending are not proving successful.
The Tory MP, Edward Leigh, who chairs the all-party committee singled out Lloyds and Royal Bank of Scotland for their "poor performance" and said their behaviour was causing "widespread dismay". He added: "The Treasury does not seem to know why the banks are not lending, and has few sanctions available to make them change their minds."
The banks insist that they have massively increased lending but point out that demand has fallen sharply. They said they were accepting eight in ten applications but could not lend to businesses which were too high-risk.
