Budget 2012: Cheaper loans used in latest salvo against independence

The scheme will, from Tuesday, allow small and medium-sized firms to borrow at 1 per cent lower than the current going rate for up to £5.5 million.

But it has already been hit by the refusal of one major bank, HSBC, to take part.

The National Loan Guarantee Scheme (NLGS) is also being presented to Scottish firms as a reason why they should oppose independence in the forthcoming referendum.

The initial government guarantee will be for £5bn, but it is expected this will later be expanded to £20bn.

The government has said that the risk will be born by the participating banks – Royal Bank of Scotland, Lloyds, Barclays, Santander and Aldermore. Taxpayer will not be put at risk unless the banks should fail.

The scheme is a response to criticism that the economy is being held back because of a lack of lending from major banks.

And it follows the Project Merlin agreement where bonuses were linked in with lending to companies.

Small and medium-sized firms have also complained that banks are now charging exorbitant rates which make it impossible for them to take out loans.

The new scheme would mean a company wanting to borrow £1m would have £10,000 less in interest to pay.

Business leaders have welcomed the new scheme.

John Cridland, CBI director general, said: “This £20bn initiative is a clear signal from the government that it is seeking to address aspects of access to finance for smaller businesses, including the cost of lending.

“The scheme, otherwise known as credit easing, should help bring down the price of loans to small businesses, but it will not solve the structural issues.

“For a longer-term solution, the government must act on recommendations in the Breedon review, which set out practical ways businesses could secure more patient sources of funding over a longer timeframe.”

Ministers also wanted to send a message to Scottish firms that the scheme showed that they were well served by the Westminster government ahead of the independence vote.

The Treasury pointed out that it was only possible because of the size of the UK economy and its continued triple A credit- rating status.

The scheme depends on the government being able to borrow money more cheaply than the banks.

Doubts have been raised whether Scotland would be given the highest credit status if it decides to go it alone.

A Whitehall source said that the scheme had a Union Flag logo to emphasise that it was a UK-wide scheme and the “strength of being in the Union”.

He added: “This is very much about showing Scottish businesses the advantages of remaining in the UK.”

Liberal Democrat Chief Secretary to the Treasury Danny Alexander said: “From today thousands of Scottish small businesses will be able to seek out cheaper loans thanks to the UK Government’s National Loan Guarantee Scheme.

“This will help businesses save money and is only possible because the United Kingdom’s fiscal credibility and record low interest rates.”

But the SNP dismissed the claims and said it had taken the coalition government too long to deal with the problem of bank lending.

SNP Treasury spokesman Stewart Hosie said: “Nobody will be conned by the Chancellor’s anti-independence spin.

“Small business lending has been a persistent problem, and it has taken the Treasury far too long to respond. While, if some reports are to be believed, some banks have snubbed this scheme, I certainly hope that it will be a success.”

It also emerged Chancellor George Osborne is to introduce a staged scrapping of the 50p top rate of tax in his Budget for those earning £150,000 or more.

Briefings suggested that he will reduce it to 45p tomorrow before getting rid of it altogether in a future Budget.

Labour leader Ed Miliband accused the government of being more interested in cutting taxes for the rich than helping “hard-pressed families”.

He said: “We [Labour] would be concentrating on jobs and growth and we would be using every penny of scarce resources in order to help millions of hard-pressed families who are struggling to make ends meet.”