Small and Medium-Sized Enterprises

Lord Cotter Excerpts

Thursday 22nd November 2012 Lords Chamber

[Lord Marland]

The word is “restoring” the economy. We have inherited a significant problem—I am talking about the previous Government—and we need to be careful not to get too political. Small business is at the heart of what we are trying to do. On a serious note, it is clear to me that all of us in this House want to achieve dynamism in the small business community. In fact, I am extremely grateful for the noble Lord’s Question because today we have published Best-Practice Guideline: SME Finance which sets out ways and options available relating to this critical subject. I do not want to go on too long, but there is a lack of confidence in business that banks will give finance. The banks have to look at themselves and consider that they are turning the screws on successful businesses too tightly and government have to work hard with them to make sure they get the finance.

[Lord Cotter]

Does the Minister agree that we need to continue with increasing competition within banking in the country, have greater transparency and more locally focused initiatives to lend to SMEs, as happens in the USA and Germany, for example?

[Lord Marland]

Transparency in banking and increasing its scope and width by setting up new banks is absolutely fundamental to getting competitiveness into the banking system, which does not look very competitive at the moment. We have a range of schemes—I could go on forever. I will start with the enterprise capital fund, because it was started by the previous Government, which shows that all Governments are active. We have put another £200 million into it recently. We have the regional growth fund, with £1.4 billion, which will help small businesses in the regions, which I think is the noble Lord’s interest. There are many initiatives which I am happy to be questioned about.