Basel 3.1 Debate

Full Debate: Read Full Debate
Department: HM Treasury

Basel 3.1

Baroness Neville-Rolfe Excerpts
Thursday 3rd April 2025

(2 days, 13 hours ago)

Lords Chamber
Read Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
- View Speech - Hansard - -

My Lords, the removal of the SME support factor when Basel 3.1 is implemented will lead to higher capital charges for loans to our vital small and medium-sized companies. Can the Minister update the House on the Government’s assessment of the implications for small business, especially for those ready to take entrepreneurial risk, which is needed for the growing economy that he mentioned?

Lord Livermore Portrait Lord Livermore (Lab)
- View Speech - Hansard - - - Excerpts

We very much support small businesses, and we will do all that we can to support them in this economy. We will come forward soon with a small businesses strategy that will set out this Government’s approach. I do not think that the delay to Basel 3.1 is directly relevant to that issue. It is about ensuring that we have a level playing field and that we maintain the competitiveness and growth objectives that we have set out.

--- Later in debate ---
Baroness Neville-Rolfe Portrait Baroness Neville-Rolfe (Con)
- View Speech - Hansard - -

My Lords, as there is a little bit of time, I also wish the House and the Minister a happy Easter and come back to him on the question of small businesses and Basel 3.1. There is a concern that when that comes in it could affect lending to the smaller businesses. I hope the Minister will have a look at that. I note that it has been delayed, but when it comes in, we want to make sure that our small businesses, and indeed our smaller banks, are not discriminated against.

Lord Livermore Portrait Lord Livermore (Lab)
- View Speech - Hansard - - - Excerpts

I am grateful to the noble Baroness for her comments. I wish her and the whole House a happy Easter as well.

I continue not to agree with her on Basel 3.1’s impact. Basel 3.1 is an update to the Basel III regulatory framework, aimed at further strengthening bank capital requirements and risk management by refining the calculation of risk-weighted assets and enhancing transparency. I am not sure it is about what she is saying it is.