The UK ‘government’ guarantees £9 billion pounds of loans to overseas interests using UK banks to do their dirty work– and competing with UK companies?
free money to overseas companies???!!!
From here:
UK banks commit to $15 billion lending package to help firms expand abroad
“LONDON, Jan 26 (Reuters) - Britain’s five leading banks, NatWest, HSBC, Barclays, Lloyds and Santander committed to lending a combined 11 billion pounds ($15 billion) to help firms invest and expand into new international markets, the government said on Monday.
“The government said lending would be drawn entirely from the banks’ own balance sheets, though no timeframe was provided. UK Export Finance, the government’s export credit agency, will guarantee up to 80% of eligible loans issued by each bank.”
Shaking that magic money tree very hard to instruct banks how to do banking business in international markets – fascism writ large.
Guaranteeing 80% of £11 billion pounds of loans (£9 billion) – for which banks could provide with no guarantees at all - if they thought the loans stood up to scrutiny and good business/credit practices. This represents fresh government borrowing not included In budget numbers at at time when there are other demands for government guaranteed finance in defence and housing related areas.
This smacks of government interference in standard banking practise where these loans are only viable if the government guarantees 80% of the capital the banks put at risk. How does this impact the finances of the countries receiving this UK government guaranteed finance?
Are these loans destined for countries that ‘donate’ illegal small boat people or who are responsible for visa overstayers? Are the loans going to companies that compete directly with UK companies or are manufacturers of UK key supply chain components that also compete in international markets with the very companies being financed by UK government guaranteed loans?
Banks will no doubt celebrate these state subsidies – their risk is lowered by 80% for risk that they will charge out at commercial rates – good money if you can get it! Public risk for private reward – sounds very much like the issues behind the mortgage cash of 2008!
Once again, the Labour government is oblivious to ‘opportunity cost’. How many UK business areas are crying out for loans totalling £9 billion pounds? Would these areas denied such loans in the UK be exactly the same as those business areas which will receive these UK GOVERNMENT GUARANTEED loans from UK banks IN INTERNATIONAL MARKETS?
The money could be directed to keeping steel works open, for example, or helicopter contracts, or North Sea oil rigs or eve bank branches, pubs and restaurants – or post offices and even the bank branches that are being shuttered this year!
This is yet another example of the complete lack of focus ad coordination of an inept ‘government’ whose policy is determined by teenage focus groups with no experience of the real world or how to formulate joined up national policy.
Pathetic.
Onwards!
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Hey! No problem! It's only other peoples' money! ( Where do these numbskulls think they'll end up when wasted every last bit!?)
As per usual. They haven't thought this through properly. Typical Labour.