Small and Medium-sized Enterprises

Debate between Lord Methuen and Lord Newby

Monday 29th October 2012 Lords Chamber

[Lord Newby]

My Lords, it is simply not true that the banks are stuffing their balance sheets as a result of this scheme. This scheme gives the banks incentives to lend, not to stuff their balance sheets. There is considerable evidence that the banks are offering loans to SMEs at significantly lower interest rates and offering new mortgage products. These are already beginning to generate new business.

[Lord Methuen]

Is the Minister aware that Rolls-Royce, in order to fund its suppliers, has lent them £500 million, because the banks are not doing so?

[Lord Newby]

My Lords, it is a very sensible approach for large companies to provide credit down the supply chain. It is not just Rolls-Royce—many other companies are doing the same, and I think that they should be encouraged to do more of it.