Oral Answers to Questions

Laura Sandys Excerpts

Tuesday 21st June 2011 Commons Chamber

[Mr Hoban]

We must ensure that banks signal to businesses that they are open for business and that they have the capacity to lend to businesses. That is why we work with the banks to deliver Project Merlin, but, as I have said, there is more work for the banks to do to ensure they lend to small businesses, and we will continue to hold them to account on that.

[Laura Sandys (South Thanet) (Con)]

Did Project Merlin also cover transparency in respect of the covenants banks require small businesses to put forward, and has that increased over the last three or four years? I ask because this seems to be one of the big barriers to small businesses taking out loans.

[Mr Hoban]

My hon. Friend makes an important point about the relationship between banks and their customers and the transparency of that relationship. That is why the British Bankers Association business taskforce has introduced a range of measures to look at the relationship between banks and their customers and we will continue to monitor that work. It is important that banks are transparent with their customers about the terms on which loans are offered.