Small Businesses: Finance

Lord Harrison Excerpts

Wednesday 25th February 2015 Lords Chamber

Asked by

[Lord Harrison]

To ask Her Majesty’s Government what steps they have taken in the past year to increase access to finance for small businesses.

[Lord Newby (LD)]

My Lords, it was announced in the Autumn Statement that the Government are providing further funding to two British Business Bank schemes, the enterprise capital funds and enterprise finance guarantee schemes. Additionally, the Funding for Lending scheme will be extended and focused on lending to SMEs, and furthermore, the Small Business, Enterprise and Employment Bill ensures that SMEs which are rejected for finance by banks are referred to alternative finance providers and that those providers have access to the credit data they need.

[Lord Harrison (Lab)]

My Lords, according to the Federation of Small Businesses, credit availability and affordability has declined in the past quarter and indeed the Government’s own Funding for Lending scheme has sputtered and spluttered into reverse over the past two years. Will the Government take heed of Keith Morgan, the leader of the British Business Bank, who has said that there are market failures which need to be addressed if our small businesses are to grow and to provide jobs for the future?

[Lord Newby]

That is why we have created the British Business Bank specifically to deal with these market failures. The bank aims to unlock £10 billion of new finance by 2017-18. On lending to small businesses, the noble Lord should be aware that gross lending has grown by 25% in the past year and by 41% over the past two years.