Small and Medium-sized Enterprises: Interest Rates

Lord Leigh of Hurley Excerpts

Wednesday 13th September 2023 Lords Chamber

Asked by

[Lord Leigh of Hurley]

To ask His Majesty’s Government what steps they are taking to support small and medium-sized enterprises in raising finance in a period of high interest rates.

[Lord Leigh of Hurley (Con)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I draw your Lordships’ attention to my register of interest, in particular as senior partner of Cavendish Corporate Finance.

[The Minister of State, Department for Business and Trade (The Earl of Minto) (Con)]

We work closely with the British Business Bank to support SMEs through targeted market interventions. That includes improving the terms on offer to SME borrowers through the recovery loan scheme, providing businesses with up to £2 million of guaranteed government finance. We are also boosting availability of non-debt finance by extending British Patient Capital to 2033 and funding the Regional Angels Programme with an additional £150 million over the spending review period.

[Lord Leigh of Hurley (Con)]

Given the economic growth that we now know has now happened since Covid, growing SMEs need equity finance to expand their businesses. Now that the Windsor Framework has been signed and the EU state subsidy restrictions withdrawn from our own state aid, will the EIS and SEIS be amended to take away restrictions such as gross assets and seven-year trading? In particular, will the sunset clause be removed?

[The Earl of Minto (Con)]

I entirely agree with my noble friend about the very good news about the economy. The EIS and SEIS schemes, along with VCT, have been enormously popular and successful, with over £40 billion being invested since their inception in 1994. We are assured by the Chancellor that the Government are committed to their renewal. We absolutely recognise the need for investors and companies, so that investment continues without interruption going forward. My noble friend will understand that I cannot give exact timings today, but the details will be provided by His Majesty’s Treasury ahead of the renewal date. On the European clauses, I ask your Lordships to understand that the Chancellor will have in mind that any renewal is for UK business only and no longer for the wider European audience.