Boost the economy with bank lending

I understand that public spending, capital projects and private investment would boost the economy but there is something else that needs to be sorted in order to ensure that the big spending review gamble works.

 

As recent figures by the British Bankers Association have shown, mortgage take up continues to fall and banks continue to have low levels of lending to small business.

 

So we need the banks to step up their lending of mortgages so they are not as expensive for the lower deposits and banks to lend more willingly to small business. Won't that cover any loss to the economy through the loss of public spending?

 

Can't the government with its ownership of banking shares not have some influence on this?