Banks: Lending

Lord Stevenson of Balmacara Excerpts

Wednesday 5th February 2014 Lords Chamber

[Lord Popat]

My Lords, when I first came to this House, I set up an ad hoc committee to see what we could do to help SMEs to export more and have access to finance. The report was published in this very House, and we now have a large number of schemes, with UKTI working to help our SMEs to export more and to make funds available for exporting.

[Lord Stevenson of Balmacara (Lab)]

My Lords, the National Audit Office recently reported on borrowing to SMEs. It said:

“the flow of new bank term lending to SMEs fell by 23 per cent between 2009 and 2012 … the ‘funding’ gap (the difference between the funding required by SMEs and the funding available) … may reach £22 billion by 2017. … There is no formal research programme joining BIS, HM Treasury and other departments that have an interest in SMEs. As a result, emerging insights are not as joined-up as they should be”.

Will the Minister tell the House when he last met with Treasury officials and when he intends to meet them to talk about SMEs in the future?

[Lord Popat]

My Lords, gross bank lending has gone up for the past 12 months, although net lending has fallen in three out of the past 10 months. Overall lending is a lot more than it was in 2012. I am pleased to say that, although net lending has dropped, there are other sources of finance available to SMEs and businesses from which they can borrow money. The recent responses to the Bank of England credit conditions survey reported that the overall availability of credit to the corporate sector increased significantly in the final quarter of 2013. I normally stick to my own department, and I have not had any meetings with the Treasury.