UK To Launch Small Business Loan Guarantee Plan In Jan.

The U.K. government will launch a new small business loan guarantee scheme in January, Harriet Harman, the deputy leader of the governing Labour Party, told parliament Wednesday. Earlier this month, U.K. Prime Minister Gordon Brown hinted that the government could expand efforts to guarantee loans to businesses to ensure lending continues during the credit crunch and economic downturn. Nobody was immediately available at the Department for Business, Enterprise and Regulatory Reform to comment on the new scheme. In last month's pre-budget report the government expanded to GBP1 billion a preexisting loan guarantee scheme and provided a further GBPB1 billion for export credit guarantees. Last week the government also convened the first meeting of a new high-level panel to monitor lending which brought together senior officials, banks, and groups representing small business and consumers. "It is true to say that whilst lending figures are starting to show increasing lending to small businesses, there are still businesses having problems, that's why the national lending panel has been established," Harman said. She also told parliament that the government would change legislation if energy companies failed to pass on lower wholesale prices to customers, but didn't give any further details. "The energy companies must pass on the price cuts to consumers, both businesses and families, and they must also treat all consumers fairly and if they don't...we will change the law to force them to do it," she said. Pressure is mounting on the U.K.'s six biggest energy suppliers after the gas and electricity markets regulator Ofgem said Tuesday that it expected them to cut home energy bills for their customers in early 2009 after a big drop in wholesale prices. If they haven't complied by Ofgem's board meeting in February, they could face an inquiry by the Competition Commission, it said. The six big U.K. utilities are Centrica PLC (CNA.LN), Scottish and Southern Energy PLC (SSE.LN), Iberdrola SA (IBE.MC) subsidiary ScottishPower, and the U.K. arms of Electricite de France SA (1024251.FR), Germany's RWE AG (RWE.XE), and E.ON AG (EOAN.XE).

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