Small Businesses: Finance

Lord Harrison Excerpts

Thursday 26th January 2012 Lords Chamber

Asked By

[Lord Harrison]

To ask Her Majesty’s Government what measures they propose to help small businesses and start-up companies access finance.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

The Government have a range of measures in place to help small businesses and start-up companies to access the finance they need. They include the enterprise finance guarantee scheme, which helps small businesses lacking track record or collateral to secure bank finance, the enterprise capital funds programme, which provides equity funding to high-growth potential businesses, BIS’s export finance guarantee, UK Export Finance’s products, and the recently announced £20 billion national loan guarantee scheme that will enable banks to offer lower-cost lending to small and medium-sized businesses.

[Lord Harrison]

My Lords, can I invite the Minister to correct the false impression given yesterday by the Prime Minister in PMQs that bank lending had increased to small businesses? In fact, the trend in bank lending, published by the Bank of England, shows a decline from April to November of last year. I remind her that the Federation of Small Businesses still talks about the difficulty of members obtaining bank lending. When they do it is typically at a 10 per cent rate. The other government programmes, for instance the Merlin programme, are all smoke and mirrors. The regional growth fund has been lending to big businesses, not small businesses. Can she think of something radical, for instance the state-funded Small Business Administration in America, which has successfully lent to small businesses the right amount of money to get the economy going? It is time that this Government did something big for small businesses.

[Baroness Wilcox]

Right. I am very pleased that I was at Prayers this morning when the right reverend Prelate the Bishop of Manchester read so beautifully the prayer with the words, “the sea rageth”. Without doubt the sea rageth when it comes to money and getting growth going, but it is important that we keep the faith and keep a steady course. The things that I have read out so far are working. There is no doubt that we are lending money to small businesses and they are starting to do well.