Small and Medium-Sized Enterprises

Lord Harrison Excerpts

Thursday 22nd November 2012 Lords Chamber

Asked By

[Lord Harrison]

To ask Her Majesty’s Government how they plan to help small and medium-sized enterprises to access sources of finance.

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

My Lords, the Government recently announced that they are setting up a business bank to address long-standing gaps in finance for small and medium-sized businesses. This will build on a range of measures already in place. Increasing the supply of finance to lenders through the Funding for Lending scheme will lead to lower costs for borrowers. The Enterprise Finance Guarantee scheme helps small businesses lacking a track record or collateral secure bank finance. The Enterprise Capital Funds programme provides equity funding to businesses with high growth potential.

[Lord Harrison]

My Lords, according to the Federation of Small Businesses, three out of four small firms rate credit availability as either poor or very poor, and four out of 10 firms are being paid later than the agreed 30-day payment period, including by the Government. What will the Government do to enforce the excellent legislation on late payment of the previous decade and ensure that small businesses get their money back? Welcome as the announcement of the British business bank is, does the Minister recognise the failure of the regional growth fund, which was supposedly designed to help small businesses but was panned recently in the House of Commons by the PAC? When will the Government deal with small business as big business on the road to growth and to restoring the economy?

[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.