Government ‘must increase flow of lending’

The Treasury Committee has called on the government to take more action to improve the flow of credit in a bid to boost the economy.

A publication from the committee has highlighted restricted bank lending as the “single most critical problem for the economy in the near term”.

Chairman John McFall said that more debt help must be offered to borrowers to improve conditions.

“The government must ensure the availability of credit increases quickly and there is still far more work to be done,” he commented.

Without such action, the economy will be placed in further “jeopardy”, Mr McFall added.

It comes after UK Insolvency Service advice co-ordinator Ian Boden-Smyth claimed that lenders have become more open to discussing debt consolidation with borrowers.

He said that banks want to help people handle debts rather than using threatening tactics to make them pay up.

By Jamie Price