Banks: Small and Medium-sized Enterprises
Debate between Lord Popat and Lord McFall of Alcluith
Lord Popat
My Lords, as I said, we are looking at all the options. If the need arises because we are not successful by the end of 2014, I am sure that the department will look at maybe coming up with some sort of legislation to see what we can do to make the banks more transparent.
Lord McFall of Alcluith (Lab)
My Lords, the consistent lament for the past eight years from both the political and business communities has been that banks are not lending to SMEs and that there is less competition and innovation today in the banking sector. The OFT stated yesterday that there are competition concerns in this vital driver for the economy. Can the Minister ensure that the new competition authority will undertake a full investigation forthwith into this issue, which has been an impediment to the economic progress of this country for the past eight to 10 years?
Lord Popat
My Lords, the noble Lord makes a very important point. One way to solve the problem we have with SME lending is to bring in more competition. We are spinning out Williams and Glyn’s from the Royal Bank of Scotland and TSB from Lloyds Bank. The regulators have relaxed the regulations to issue new banking licences, and I am pleased to say that we have 21 applications in place. We have launched the British Business Bank. More competition will solve some of the problems, and of course more lending to our businesses will help the economy.