Early in the New Year I received a letter from a constituent whose award-winning business turns over more than £1 million a year and employs 40 people.

Like many successful small firms, it needs credit, in this case a modest overdraft facility.  But when this came up for renewal recently, the bank took the opportunity to hike up the interest rate it charged.

This was in spite of the fact that, over the past year, the Bank of England's base rate has dropped from 5.5 to 1.5 per cent.  Some of the luckier members of the public have tracker mortgages and are therefore significantly better off.

But, as I know from my postbag, there are vast numbers of individuals and businesses who, far from receiving the benefit of interest rate reductions, are either paying more or can't get access to essential credit at all.

This isn't to mention the millions of savers who have seen their incomes plummet.

The Government has injected £50 billion of taxpayers' money into banks - more than our entire annual policing and defence budgets combined.  The country has been brought to the brink of bankruptcy.  Yet credit remains frozen.

The banks are being blamed, but they say that the Government's rules are requiring them to hoard funds in order to rebuild their balance sheets.  They point out that the interest rate at which banks themselves can borrow is far higher than the base rate.

This is why a bank loans guarantee scheme, as David Cameron has proposed, is so essential to re-build confidence and get credit flowing.

At last the Government has taken up this idea.  Their version doesn't appear to go far enough.  But following our lead makes a complete mockery of Gordon Brown's charge that the Conservatives would ‘do nothing'.

Already unemployment has risen to 1.86 million.  Effective action is long overdue, or else fundamentally sound businesses will needlessly go to the wall.

Michelle Taylor