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Autumn Statement latest: £20bn loan guarantee for businesses. Pearson May News Update - Monday 28 November
Pearson May news blog
Autumn Statement latest: £20bn loan guarantee for businesses
Details of the much anticipated credit easing scheme were discussed by Chancellor George Osborne over the weekend.
Speaking on the BBC's Andrew Marr show, ahead of tomorrow's Autumn Statement, Osborne confirmed how the scheme, called the National Loan Guarantee Scheme, is likely to work.
He explained that the Government is likely to take advantage of the fact that it is able to borrow very cheaply, and pass this on to businesses in order to reduce the interest rate that they pay, effectively underwriting the loans.
Osborne said: "These are guarantees. We are not borrowing this money; we are underwriting the loans that are being made".
Initially, £20billion will be allocated to the scheme, but the total available could be as much as £40 billion.
Meanwhile, chief secretary to the Treasury revealed details of a National Infrastructure Plan on the BBC's Today programme this morning. The Chancellor is expected to set out details tomorrow, but it is likely to involve £30 billion over a 10 year period.
Most of the money is expected to come from big pension funds, although £5 billion is likely to come from a combination of measures, which may include further cuts to spending around tackling tax avoidance.
Rumours are also rife that the 3p fuel duty rise will be scrapped, while the Government may try to minimise any increase in rail fares.
The Office for Budget Responsibility (OBR), is also expected to downgrade growth forecasts tomorrow - in March it forecast 1.7 per cent growth in 2011.
We will be covering the Autumn Statement announcements in full tomorrow from 12am.
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