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CML blasts Government over Crosby, B&B and lending figures

Council of Mortgage Lenders director general Michael Coogan has attacked the Government’s call for base rate cuts to be passed on as “short-sighted and counter productive”.

In a fierce speech delivered at the CML’s annual conference in London today, Coogan also hit out at the Government for dragging its feet over the Crosby report and unfairly burdening smaller lenders with the Bradford & Bingley fallout.

On passing on base rate cuts, he said: “Although a small percentage of borrowers may have short-term benefit, this disregards the larger number of savers on fixed incomes dependant on their investment returns.”

He told delegates smaller savings institutions have been unfairly burdened with the Bradford & Bingley fall-out and instead said the taxpayer to carry some of the burden.

Coogan says: “The Government either needs to reduce the interest rate payable on the loan in respect of the bailout to reduce the per firm cost, or preferably reverse its decision so that the cost is bourne by taxpayers generally rather than deposit takers only”

“It is simply nonsense that small savings institutions following safe business models are financially hit by the failure of bigger organisations with riskier businesses.”

Coogan also hit out at Chancellor Alistair Darling’s statement that the Crosby report, which investigated the mortgage funding markets, would not be readdressed until the Budget in 2009. “This is simply not good enough,” said Coogan.

He also commented on the Government’s urge to return lending to 2007 levels: “Can this downward trend in the last 12 months be reversed so that we reach 2007 levels of lending next year as the Government has insisted? The simple answer is no.”

The CML also urged the Tripartite to unite. Coogan added: “[The Tripartite] need to take coordinated action not piecemeal, self interested decisions. Otherwise we will see a worsening of the picture next year compared to this.”

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