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Is Lord Mandelson a friend of UK small businesses?

Despite the fact that many UK small businesses have been starved to death over the last few months while the UK government uses public funding to bail out larger conglomerates, Lord Mandelson has today defended the right of UK small business owners to appeal against loan rejections. This is a further development from last weeks announcement that the government is looking to set up a statutory right for business owners to appeal against loan rejections by UK banks.

In an uncommon burst of anger, Lord Mandelson has told the CBI to "get real" with regards to funding issues within the UK banking industry, citing "intolerable" lending policies to small businesses. However, despite the fact that he has angered the CBI and the UK banking community, it seems that Lord Mandelson is still considering setting up an appeals body which would have the power to force a bank to lend to a business customer.

This comes at a time when the UK banking industry is under more pressure than ever before and has been told by the UK government to avoid undue risk. If a UK bank refuses a loan to a UK business, for what are perfectly valid reasons in the banks eyes, should the UK government really be allowed to force the bank to lend money to the customer in question?

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