§ Mr. Brightasked the Secretary of State for Trade and Industry when he expects to make an announcement about the future of the loan guarantee scheme beyond the end of 1984.
§ Mr. TrippierI have decided that, although the experimental scheme has not fulfilled its original goal of breaking even, it should be extended for a further year to the end of 1985. However, in order to contain costs, I am imposing a ceiling on lending in the calendar year 1985 of £50 million. The main terms of the scheme will remain unchanged, with the Government guaranteeing 70 per cent. of loans made by participating lenders and charging a 5 per cent. premium on the amount guaranteed. As now, no personal security will be taken on scheme loans but in future where an applicant has such security which he is unwilling to pledge against a commercial loan he will not be eligible for a scheme loan. In order to improve the survival rate amongst scheme borrowers, I shall be asking lenders to insist on minimum standards of appraisal and financial reporting from all applicants.