Start-up Loans

Baroness Cohen of Pimlico Excerpts

Wednesday 20th November 2013 Lords Chamber

[Lord Popat]

I thank the noble Baroness for her question. Yes, we inherited a large number of different schemes and advice schemes from the previous Government. We have looked at them and have come up with new ones as well. However, these schemes are all being consolidated under the new British Business Bank. I hope that it will be able to deliver good advice to its customers.

[Baroness Cohen of Pimlico (Lab)]

My Lords, does the Minister agree that while loans are quite a good way to start a business, what you really need is some equity? With all the money borrowed it is hard work starting a business, and very few of us do that. This is an area where I know he agrees with me. Would he like to describe what steps we are taking to encourage equity investment in some of these small start-up businesses? We used to have something called 3i, which was a very potent and useful source for small businesses, and there are various government schemes. However, they have more or less lost themselves. When we both sat on the committee on small businesses and exporting we discovered that we are unique in Europe in that so many of our small businesses—indeed, businesses of any size—are financed by bank lending. Businesses in most other countries are financed much more largely by equity investment. Can the Minister describe what, if anything, is being done to encourage this?