Lord Flight
Main Page: Lord Flight (Conservative - Life peer)Department Debates - View all Lord Flight's debates with the HM Treasury
(12 years ago)
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Lord Newby
I do not think there is any general principle involved in that. The new products being designed under Funding for Lending would enable SMEs to get additional capital where they are. For example, RBS has introduced a new scheme under this programme that will cut the rate of lending by between 1% and 1.6% for small businesses and abolish arrangement fees for new loans. Those are not limited to companies that are moving but apply equally to companies which want to expand where they are.
Lord Flight
My Lords, the scheme makes lending very attractive to banks because the cost of funding is remarkably low, but there are many situations where what is wanted is equity rather than loan capital. Will the Government review some of the changes to the EIS arrangements for providing equity, where the changes in loss relief and the latest FSE changes in marketing EIS are discouraging the raising of equity capital for small businesses under the EIS scheme?
Lord Newby
My Lords, there has been a long-standing problem in small businesses raising equity in the UK. The EIS is one component in doing that. Of course, as we look towards next year’s Budget, we are reviewing all programmes that might offer any capacity to increase the flow of funds into small businesses.