Business and Planning Bill

Debate between Baroness Kramer and Baroness Uddin

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Monday 13th July 2020 Lords Chamber

[Baroness Uddin [V]]

My Lords, I support Amendment 48 in the name of the noble Lord, Lord Stevenson of Balmacara. I have just a few brief points. I shall speak specifically about data collection and the reporting requirement for the Bounce Back Loan Schemes. Despite the pandemic, we cannot overlook the need for transparency, open government and a robust process of reporting to Parliament. Current data relating to the total number of applications and the number of loans granted does not make allowances for how well the scheme is working to help businesses through the crisis, including SMEs, as the noble Baroness, Lady Altmann, referred to. There is inadequate data on the number of businesses that could not access loan schemes and why they were refused. This should be addressed in the reporting mechanism.

The curry industry, which I referred to earlier, has reported that its members are experiencing a great deal of difficulty in accessing this financial support. I am deeply concerned about eradicating any inequity that they might be experiencing. Therefore, I would like more detailed reporting to include the number of successful applications from SMEs led by BAME communities, particularly in the curry industry, and, more specifically for the curry industry itself, the actual number of applications that have been successful and those that have been rejected.

[Baroness Kramer [V]]

My Lords, I support Amendments 46, 47 and 48 and regard all three as exceedingly important. I will start by picking up on an issue described by my noble friend Lord German. We know now that the major banks, which have been able to participate in the bounce-back scheme because they have been provided with cheap funding from the Bank of England under its term funding scheme, have failed in what I was told was an obligation to also pass that cheap money through to the fintech industry and other alternate lenders, so that a broad and diverse coterie of lending institutions would be involved in bounce-back schemes and a mechanism to ensure that qualifying small companies would be able to find a source, even if it was not from one of the major banks. We now know that that funding process has not taken place and that relatively few bounce-back loans are being provided by alternate lenders because they cannot find cheap enough funding, since they have no direct access to the Bank of England scheme.

The reason I mention this is that it describes to us the culture of major banks today. Many of us had hoped that after the 2008 crisis we would see a dramatic change in culture among the major high street banks. We have certainly seen some changes, and some are better than others, but we are still dealing with a group of institutions that, frankly, if given a loophole will use it. Amendments 46 and 47 are designed to close off two major sets of loopholes to make sure that proper consumer protection continues to be provided to SMEs that use the bounce-back schemes and to make sure that these do not become mechanisms that enable them to be taken advantage of in ways that they never anticipated. Therefore, Amendments 46 and 47 are vital to limit any potential for abuse.

Amendment 48 is important because it will help us track exactly what is happening under the Bounce Back Loan Scheme arrangements. We have all heard anecdotally that the big banks are cherry picking those to whom they make bounce-back loans. Some of them choose only existing customers because they do not want to overexpand their balance sheets; others pick from within those customers. As I understand it, the whole spirit of the bounce-back scheme is anathema to cherry picking, but it is taking place.

Amendment 48, in the name of the noble Lord, Lord Stevenson, would very rapidly make clear how many people are applying and who is rejected, and it would give us the ability to try to track exactly what is happening under this scheme. I know that something like £30 billion has already been lent through bounce-back loans but, frankly, that is well below the level that the Government expected. Those loans are a lifeline for many companies and we really cannot allow this scheme to be abused. If we are not careful, by the time we intervene, many businesses will already have closed their doors.