Small Business, Enterprise and Employment Bill
Debate between Lord Forsyth of Drumlean and Lord Popat
Lord Popat
My Lords, this is Report and we prefer not to take further interventions.
Lord Forsyth of Drumlean
I believe that interventions seeking information are allowed once on Report, so I will give way to my noble friend.
Banks: Lending
Debate between Lord Forsyth of Drumlean and Lord Popat(10 years, 3 months ago)
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Lord Popat
My Lords, gross bank lending has gone up for the past 12 months, although net lending has fallen in three out of the past 10 months. Overall lending is a lot more than it was in 2012. I am pleased to say that, although net lending has dropped, there are other sources of finance available to SMEs and businesses from which they can borrow money. The recent responses to the Bank of England credit conditions survey reported that the overall availability of credit to the corporate sector increased significantly in the final quarter of 2013. I normally stick to my own department, and I have not had any meetings with the Treasury.
Lord Forsyth of Drumlean (Con)
My Lords, will my noble friend explain why the capital requirements for banks that are lending to small businesses require them to maintain a considerable amount of capital for the loans they provide, whereas, if they buy Greek bonds, they are not required to provide any capital at all? Is it therefore any wonder that there is a distortion towards buying bonds from sovereign bodies rather than lending to small business? Should we not look at the regulation?
Lord Popat
My Lords, the regulations are being reviewed, but I agree with the noble Lord. A large number of medium-sized businesses are now switching from bank borrowing to issuing bonds.
EU: Membership
Debate between Lord Forsyth of Drumlean and Lord Popat(10 years, 5 months ago)
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Lord Popat
My Lords, I am aware of the CBI survey. Some 80% of UK businesses want to be in Europe; Europe is good for them. Their position is that there is already a question mark as to what the future will lead to, and most businesses support both a referendum and the reforms that need to take place.
Lord Forsyth of Drumlean (Con)
My Lords, does my noble friend not agree that it would be quite outrageous if this unelected House were to seek, using its procedures, to frustrate the will of the House of Commons to give the people an opportunity to have their say on our membership of the European Union in a referendum?
Lord Popat
My Lords, the House of Commons has given the Bill a smooth passage towards becoming law, and it is important that this House, too, gives a clear passage for the Bill to go through in the new year.
Royal Mail: Pricing of Shares
Debate between Lord Forsyth of Drumlean and Lord Popat
Lord Popat
My Lords, we were given advice on the price for the shares by a large number of institutions. We took into account a recent flotation of a similar organisation in Belgium. We also took a view on the price determined for recently quoted companies in the UK. The price range was between £2.60 and £3.30. We pitched at the higher amount of £3.30. This flotation was very successful despite the difficulties happening in America and the impending strike by the union.
Lord Forsyth of Drumlean (Con)
My Lords, will my noble friend confirm whether any of the advisers on the share sale were the same advisers who advised the previous Government to sell our gold at the bottom of the market at a loss to the taxpayer of more than £10 billion?
Lord Popat
My Lords, I do not have that information. Our advisers were robustly looked into. Some 21 advisers made a pitch to us. Nine were selected and they advised us at a different stage of the flotation.
UK Industry: Competitiveness
Debate between Lord Forsyth of Drumlean and Lord Popat
Lord Popat
My Lords, this issue has been raised by the noble Lord in the past. Education is our fourth largest export earning. I agree with the noble Lord that we need to spend more money both on research at universities and on further investment in training provided by businesses. I will take the noble Lord’s point into account and will be happy to ask my colleague in the office to write to him to see what investment we are making in research at our universities.
Lord Forsyth of Drumlean
My Lords, could my noble friend explain why there has been a dramatic fall in the value of the pound and yet our export performance is pretty poor? What is the explanation for that and what can be done about it?
Lord Popat
My Lords, the value of the pound is determined by the international market. The fall in exports is mainly due to the current economic crisis, not just in the UK but in Europe as a whole. Half our exports are to the European Union and there are real issues in the European Union. The currency changes that take place quite often have a limited impact due to the very high import content in our exports. Hence any depreciation or the value of the pound going down will not have real impact on our exports.
Payday Loans
Debate between Lord Forsyth of Drumlean and Lord Popat
Lord Popat
My Lords, that is why last week’s announcement was about the Government and regulators taking strong action together, both to address current problems quickly and to ensure that a more effective regime will be in place next year. A cap is not recommended by the Bristol University report; a cap will reduce access to credit and will mean fewer lenders. As for lenders going offshore, I do not believe that this is the case yet, but if we bring a cap into place there is a good chance that lenders would rather lend from abroad than from this country to avoid the cap regulation.
Lord Forsyth of Drumlean
My Lords, is not the problem with payday loans that people take them out and then take out another loan to pay off that payday loan, so that the loans become larger and larger and the interest rate burden unaffordable? Is that not very similar to the Opposition’s economic policy?
Lord Popat
My noble friend makes a very valuable point. That is why the Government are now clamping down on these payday lenders, particularly through our Office of Fair Trading. Unfortunately, the noble Lord is right about the rollover of interest costs, which are quite astronomical to borrowers. That is why enforcement action is being taken as quickly as possible.