Banks: Small and Medium-sized Enterprises

Lord Mitchell Excerpts

Wednesday 12th March 2014 Lords Chamber

[Lord Popat]

My Lords, the taxpayer had to bail out both RBS and Lloyds Bank under the previous Government and we continue to pay for the mistakes of the past. Both banks are now becoming smaller and safer, but there is a long way to go. Since the launch of the Funding for Lending scheme, RBS and Lloyds Bank are now both lending more money to our SMEs.

[Lord Mitchell (Lab)]

My Lords, despite what the Minister says, the latest Funding for Lending figures are yet again down on what they were previously, and the high street banks are just not playing their part. Does the Minister agree that peer-to-peer lenders are in many cases much better able to serve small businesses and should receive even greater government assistance?

[Lord Popat]

My Lords, gross lending has gone up by 16% over the past 12 months. We intend to lend £4 billion per month compared with around £3.1 billion this time last year. We encourage peer-to-peer lending and more is happening in the area. One of the reasons that net lending might have dropped, which is probably the gist of the noble Lord’s question, is that a large number of businesses are either repaying or going for alternative financing, including factoring, leasing and hire purchase. There are also a number of schemes from the British Business Bank.