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Lembit Öpik (Montgomeryshire) (LD): On those visits, was the right hon. Gentleman aware of, or did he come across, the fact that quite a few businesses, far from getting more lending, are experiencing a squeeze on their overdraft facilities, which are being reduced by the very banks that are promising to be more generous? Will his and his Committee’s investigations perhaps consider whether anything in the Budget might force the banks to be more generous with their overdraft facilities, and certainly not reduce them, when those companies are desperate to invest?
John McFall: What we did hear from businesses was that they would rather be paying higher interest rates than, say, some of the arrangement fees that the banks were imposing on them—in a number of cases, four or five times the value of what they were paying the previous year. Those are hidden charges from the banks, so they go on the profit and loss account. There is a need for transparency here and for a lot of work to be done, but I welcome the measures that the Chancellor announced today with regard to business support.
John McFall: What we did hear from businesses was that they would rather be paying higher interest rates than, say, some of the arrangement fees that the banks were imposing on them—in a number of cases, four or five times the value of what they were paying the previous year. Those are hidden charges from the banks, so they go on the profit and loss account. There is a need for transparency here and for a lot of work to be done, but I welcome the measures that the Chancellor announced today with regard to business support.
