Oral Answers to Questions

Alison McGovern Excerpts

Tuesday 15th March 2016 Commons Chamber

[Mr Speaker]

I call Alison McGovern.

[Alison McGovern (Wirral South) (Lab)]

I warn the Secretary of State not to be too gleeful about the long-term economic plan—

[Mr Speaker]

This is question 3.

[Alison McGovern]

3. What assessment he has made of trends in the level of lending to small businesses by (a) banks and (b) alternative finance institutions in the last five years.

[The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)]

I was about to get a warning. Maybe I will get it in a moment. The stock of bank lending to small businesses fell after the financial crisis but is now recovering, with four consecutive quarters of positive lending. Peer-to-peer business lending is becoming increasingly important as an alternative to bank finance. It has grown from £20 million in 2011 to nearly £1.5 billion in 2015.

[Alison McGovern]

I am sorry, Mr. Speaker. Given the Secretary of State’s proximity to the Chancellor, perhaps he does not need a warning. Perhaps he has already given a warning about the Budget, as he probably knows that in the north-west we have seen just half the business investment in SMEs of that in London. Clearly, something has gone wrong with the long-term economic plan if we are not seeing rebalancing, so what conversation have the Secretary of State and his Ministers had with the Treasury about its attack on other financial institutions—for example, building societies?

[Sajid Javid]

The hon. Lady is right to raise the importance of credit throughout every region of the UK for everyone who thinks a vibrant growing economy is important. We talk regularly with the Treasury about these issues—for example, about the work we do through the British Business Bank, which has provided more than £2.4 billion of financing over the past four years, helping some 40,000 businesses, many of them in the north-west.