(THREAD) It is worth explaining why I think government has made the wrong call on CBILs. It is falling into the trap of thinking the danger at the end of all this will be that we have done too much, too quickly when the danger is the opposite: we do too little, too slowly (1/)

CBILs remains underweight in its impact--nearly 6m SMES, 12,000 loans at a probable value of £2bn over 4 weeks --£500m a week. Last year (2019--source BBB) SME lending was over £1bn a week--more than double. CBILs is supposed to help us through an economic emergency. (2/x)

The Chancellor implied other countries with high loan payouts don't have a furlough scheme. This is wrong. For example, France has a furlough scheme and has paid out loans (at 90% underwriting) to 150,000 businesses at a value of £19bn (3/x)

The Chancellor initially talked about up to £330bn of loans. This certainly is an enormous sum. But we are at a fraction of that --an estimated £2bn paid out to SMEs. Even taking account of payments to large businesses (£7.6bn), we are way off this--around £10 billion. (4/x)

The '80% acceptance' number set out today by the Chancellor is not all it appears. Many companies appear to be put off at the enquiry stage which was estimated at 300,000 as of two weeks ago. Compare that to just 12,000 successful loans. This make success rate much lower (5/x)

I do not in any way discount the other steps including grants for some small businesses but genuinely, what is a small business supposed to do if it cannot cover its costs? That is the feedback I am getting from SMEs across the country. (6/x)

This has been cross-party & cross-sector call: @George_Osborne, @sajidjavid, Norman Lamont, @CBItweets @fsb_policy as well as Bank of England Governor. Common theme was worry about how to help businesses weather the storm because it will affect how swiftly we can recover (7/x)

The big mistake in all this is that the moral hazard argument is what makes governments move too slowly in these crises. But history teaches us that the economic hazard is greater as governments tend to later recognise. That is the basis of 'whatever it takes'. (8/x)

Full underwriting of loans for small businesses matters a lot in my view because it would unlock more liquidity. In fact, in the longer-view, depending on the decisions we take on an exit strategy from lockdown, it will almost certainly turn out that we will need to do more. ENDS