Oral Answers to Questions

Baroness Burt of Solihull Excerpts

Thursday 6th March 2014 Commons Chamber

[Vince Cable]

One positive thing is that we are now getting a growth of specialist institutions that provide small businesses with a type of finance—Aldermore provides asset-based financing or new kinds of invoice financing to deal with cash flow or investment as required. However, the hon. Lady is right to say that there is a particular problem in that area of the market.

[Lorely Burt (Solihull) (LD)]

I recently had the privilege of opening the first bank in my constituency to be approved under the new Government fast-track system—Paragon bank—and it was full of praise for the help it received from my right hon. Friend’s Department. Does he share my aspiration that that will herald the beginning of much greater diversity and choice in the banking sector, and particularly help for small businesses?

[Vince Cable]

My hon. Friend is right and I thank her for her kind words. Ultimately, what will change the problem is breaking the traditional monopoly of the big four banks. Many new banks are now coming into existence, and the more flexible licensing regime operated by the regulators is playing a significant part. I believe that 20 new banks have recently been licensed and, within a few years, I think we will see real competition and diversity.