British Bankers’ Association, the industry group, said “commercial realities” made it “inevitable that some businesses will not survive” the recession

British Bankers’ Association, the industry group, said “commercial realities” made it “inevitable that some businesses will not survive” the recession. Gordon Brown, prime minister, has put support for small businesses at the centre of his banking rescue plan, requiring HBOS, Lloyds TSB and RBS to make lending available at 2007 levels in return for £37bn of taxpayer-funded equity.The Conservatives said Mr Brown’s pledge on lending was “meaningless”. “The rhetoric does not match the reality on the ground – it’s as deceitful as it is fanciful,” said Alan Duncan, shadow business secretary.“Lending to small businesses is drying up,” he said. “Even now, banks are cancelling overdraft facilities at two days’ notice and driving many good small firms to the wall.”Government officials said the talks were “constructive and positive” and not “read the riot act territory”. Ministers did not attempt to impose any constraints on the amounts or costs of their lending, said insiders.
“It was more a general discussion about intent. There were no detailed talks about areas like pricing,” said one. Another said the banks had told ministers they could make loans available but “not force the demand” from a shrinking sector.Lord Mandelson, who will chair the meeting with small business groups, said the talks would allow business and banks to resolve their differences. Angela Knight, chief executive of the BBA, said there were limits to the help banks could offer. “What we can’t do unfortunately is reverse a poor economic situation,” she said. “As talk turns to recession, it seems inevitable that some businesses will not survive, even with the best assistance that banks, government and voluntary agencies can give them.”