Small and Medium-sized Enterprises

Lord Haskel Excerpts

Tuesday 19th November 2013 Lords Chamber

[Lord Popat]

The noble Baroness makes a very important point. SMEs are more likely now to have an alternative source of finance, including asset or leasing and quite often inward discounting. They are not approaching their own banks as much as they used to, but I am pleased to report that banks are now proactively lending money to SMEs.

[Lord Haskel (Lab)]

Will the Minister respond to my noble friend’s question about real estate? The Bank of England report states:

“The outlook for corporate lending also depends on developments in the commercial real estate (CRE) sector, which makes up around a third of lending to non-financial businesses”.

The point is that the property bubble is taking money away from the SME sector. Will the Minister respond to that?

[Lord Popat]

My Lords, under our Funding for Lending scheme, £80 billion has been allocated by the Bank of England, of which some £17.6 billion has been taken up by SMEs. I agree that a large proportion of that is in the property sector. We have relaxed some of the conditions for lending money to SMEs, which are now able to finance their debt or their stock. Hence we will be lending more money to SMEs and this figure is gradually going up. Real lending to businesses is now taking place.