Banks: Funding for Lending Scheme

Lord Haskel Excerpts

Tuesday 4th December 2012 Lords Chamber

[Lord Newby]

My Lords, I think that the noble Lord is missing the fact that, over the period, the banks that are signed up to this scheme have made an additional £500,000 of loans to businesses and individuals. This is exactly what the scheme was intended to do. All the evidence is that the participating banks intend to use it to a greater extent in the future than they have up to now—it is very early days—and therefore I am sure that the question that the noble Lord has in his mind will not arise.

[Lord Haskel]

Did the Minister notice in today’s paper that some of the banks have not yet prepared their offer under this scheme? What are the Government doing to chivvy them up?

[Lord Newby]

The important thing is that the big banks have got a very clear offer. RBS, for example, has launched a £2.5 billion fund for SMEs specifically under this scheme, with the rate of interest charged being 1% less than would otherwise be the case. Lloyds TSB has also reduced its rate by 1% and noble Lords will no doubt have seen the double-page ads that it has taken out in the papers to persuade small businesses to take out a loan. Barclays has introduced a 2% “Cashback for Business”. So the big banks are already absolutely on the case; the smaller banks, which have signed up over a period, are, indeed, developing their offers.