Start-up Loans

Lord Leigh of Hurley Excerpts

Wednesday 20th November 2013 Lords Chamber

[Lord Popat]

My Lords, on business investment, I am pleased to say that there is a return of consumer and business confidence in the economy. Bank lending to businesses is going up. In fact we had a large increase in gross domestic lending to businesses in the past 12 months, a lot more than we had in the early part of 2012. Although net lending has dropped compared with the peak of 2008, it has just started to increase, so there is some business confidence and that will help business investment, which will help our growth. As I mentioned yesterday, our growth forecast has gone up from 0.6% to 1.4%, which is good news. With regard to bank lending, we have a large number of schemes. Once again, we are marketing very strongly awareness of these schemes, which will enable a number of businesses to borrow money and grow further.

[Lord Leigh of Hurley (Con)]

My Lords, I speak as someone who started a business with exactly the same sum of money as Mr Martin raised so I am aware of the great difficulty in raising money for start-ups. To have a scheme such as this, which facilitates a new business, is really encouraging. I understand that 30 new businesses a day are being created by this scheme. Does my noble friend agree that not only is this wonderful for new businesses but the success of the business growth fund means that, as these businesses flourish, it is not just relief from debt and loans but equity injection which are being provided to enable these businesses to flourish and succeed?

[Lord Popat]

My Lords, it is pleasure to answer my noble friend’s question. He brings with him a wealth of experience both in business and in corporate finance. The business growth fund is a welcome initiative, with five or six clearing banks putting together some £2.5 billion to lend money to new and growing businesses. I imagine that it will do a very good job for special and medium-sized businesses, which can borrow money on the basis of venture capital. Therefore, we welcome the initiative. The good news is that not a penny of taxpayers’ money is involved in the growth fund.