The Federation of Small Business reports that the banks are still not lending to small businesses. When I talk to small business owners in Formby, Crosby and Maghull they all tell me that the banks are not learning.
We have had a number of high profile government schemes to improve lending but none of them seems to have worked.
So what is the answer?
I visited the head office of Cumberland Building Society in Carlisle and they lend to small businesses. The Merseyside Special Investment Fund also lends to small businesses right here.
Both of these organisations lend to people when the banks will not, so it can be done.
And the reason it is important is that small businesses are the backbone of our economy. They are where the real, good quality jobs are going to come from.
There are 4.7million businesses in this country which employ fewer than 10 people. These are the businesses that are likely to grow and likely to create the jobs that we need if we are to see increasing prosperity yet government policy in this area has been worse than useless.
The Bank of England’s own figures show that lending to businesses has fallen in the last few months and it is clear that a new direction is needed.
In Germany they have a system of Regional Banks which is responsible for lending to small businesses. They are even measured on the success of the region where they lend. So it is in their interest to lend to businesses to ensure the economy grows.
Such a system could work here.
Cumberland Building Society and Merseyside Special Investment Fund both show that a regional approach can work. But what is needed is a proper regional banking system which supports the businesses in its region, that helps them grow and advises them on how to prosper.
Such an approach is being advocated by the Labour Party and it is in stark contrast to what is happening at the moment under the coalition government. The banks are lending to larger businesses and for those at the top there is a recovery.
Unless we support the small business sector, that economic recovery will be for the few and will bypass the many. We have many excellent small businesses in Formby, Crosby and Maghull and we as consumers should support them as much as possible.
But we need a banking system that supports them too and it will take government intervention to ensure that we have that banking system.
In Germany, when the Berlin Wall fell, the government set up the same regional banking system in East Germany that was already a success in the West. It worked for East Germany and I am sure it can work for our country and for the businesses of Sefton.
Our businesses really can do better than this if they are given the chance.