CHARLES GRAHAM - Daylight robbery

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IF ever Britain is going to get out of this recession, our banks have got to start lending again.

There have been plenty of reasons for disliking the banking sector over the last five years but now, it seems, they have given us yet another one.

After gambling all our money away and encouraging people to take out loans that they could never hope to repay, several have been bailed out by the beleaguered taxpayer. This was done on the partial condition that such a deal would re-energise the banks and so allow them to give loans to new and established businesses to get them going or help them expand and so kick-start the flatlining economy.

But this week it was revealed that despite an £80bn Treasury scheme, lending plunged during the second half of last year.

Figures show that small building societies - including the Newbury, Leek United, Principality and Monmouthshire (no, I hadn’t heard of them either) - have been doing more net lending than some of our biggest banks.

The State-owned Royal Bank of Scotland and Lloyds saw net lending (the difference between the money handed out by a lender minus the amount paid back by customers) plummet to minus £2.4bn and minus £5.6bn respectively over that period.

Small companies trying to make their way have been particularly badly hit and, despite what some banks are saying, there is no shortage of demand.

As George Osborne battles to curb a Euro-cap on bankers’ bonuses he might also request that they be awarded not just for making oodles of cash for their employers but also conditional on doing their bit for easing recessionary woes.