Last updated 20:23, Thursday, 09 October 2008

WEST Cumbrian businesses breathed a sigh of relief this week as the Government announced its momentous £500bn rescue of the UK banking sector.

Local businesses welcomed the move to fight off the economic crisis. The rescue plan came alongside a 0.5 per cent cut in interest rates.

Workington MP Tony Cunningham said: “Without this deal it’s possible we would have seen an economic disaster.

“The measures will make sure money is filtered through to smaller businesses and homeowners.”

Mr Cunningham, involved in the bail-out plan in his new Government role as 'pairing whip', said: “People will start to see the effects soon. When banks and building societies have the confidence to lend to each other again then they will begin to lend to their customers.

“Businesses can then get on with starting up or expanding.”

Branded the biggest meltdown in economic history, the fall-out has hit on a local level with job cuts and closures.

Workington’s MFI store faces an uncertain future, and Alcan Packaging, Salterbeck, is looking to shed 40 jobs.

Dave Fletcher, Workington town centre development manager, said: “We won’t see the effects of the economic bail-out until banks have regained confidence to start lending again.

“The Government has temporarily plugged a hole in a ship caught in a very rough storm.”

But, he added, 99 per cent of Workington’s traders were happy with trade levels recently, considering the economic situation.

Mr Fletcher said: “The town’s businesses are looking forward to an early Christmas with more shoppers buying sensibly in preparation for Christmas.”

Rob Johnston, chief executive at Cumbria Chamber of Commerce, said: “We hope the package will restore stability.

“The emergency cut in interest rates is a great step in the right direction. But it can’t stop here. Over the next four months interest rates must be cut to four per cent or below.

“Businesses are more than just growth makers – they are critical to our local communities.”

Cumbria’s own building society is confident there is no need for its customers to worry.

The Cumberland Building Society has seven branches in West Cumbria, including Maryport, Cockermouth and two in Workington.

Deputy chief executive John Leveson believed that the society, owned by its members, had not taken as many risks as its competitors.

He said: “We have never done sub-prime mortgages or self-certification mortgages, where people do not have to prove what they are earning.

“We have never purchased our mortgages from other banks and we have negligible arrears.”

He claimed that some people were starting to move their money into the Cumberland as anxiety grows.

Mr Leveson added: “It is impossible to predict when there will be an upturn in the economy and we are not planning for one in the next 12 months.”