Oral Answers to Questions

Karen Lumley Excerpts

Tuesday 24th April 2012 Commons Chamber

[Karen Lumley (Redditch) (Con)]

4. What steps he is taking to increase the availability of credit to small businesses.

[The Chancellor of the Exchequer (Mr George Osborne)]

Lending to small businesses is a real concern at a time of stress in the financial markets. That is why the Government acted last month by launching the £20 billion national loan guarantee scheme. It is still in its first few weeks, but the signs are that businesses are getting cheaper loans, which will help support recovery.

[Karen Lumley]

Small businesses are obviously the key to the economic recovery. Will the Secretary of State reassure business people in Redditch that the Government will continue to look at funding for SMEs to ensure that finance reaches even the smallest companies?

[Mr Osborne]

I can certainly give my hon. Friend that assurance and say to businesses in her constituency and others that the national loan guarantee scheme is now available through most of the high street banks. We are also investing through something called the business finance partnership in non-bank financing of businesses. Some of that money will be for very small businesses, too, through peer-to-peer lending. As everyone accepts, I think, financial markets across the world, particularly in Europe, are stressed. That is why the Government have to step in and help, and that is what the £20 billion of guarantees that we are offering under the scheme will do.