Oral Answers to Questions

Lord Tyrie Excerpts

Tuesday 7th June 2016 Commons Chamber

[Mr Osborne]

Over the past five or six years, we have greatly increased the UKTI budget, but as with every Department, since it is paid for by the taxpayers that the hon. Gentleman and I represent, we need to make sure we get value for money. The new head of UKTI is ensuring that the money is going to the frontline to support small and medium-sized Scottish exporters and others in selling around the world. He should welcome the enormous success of many Scottish businesses, from the whisky business to agricultural industries and manufacturing, in exporting around the world, with the support of UKTI—the clue is in the first two letters.

[Mr Andrew Tyrie (Chichester) (Con)]

The Chancellor has introduced a subsidy for peer-to-peer lending tax relief on ISAs, which is a high-risk, high-return market. Most people support the intention, which is to increase competition in the SME lending market, but many are becoming concerned that some of these loans are being marketed to those who cannot reasonably be expected to understand the risks. What is the Treasury doing to ensure that the taxpayer does not end up encouraging the marketing of schemes to people who can least afford to lose the money?

[Mr Osborne]

At its own request, the peer-to-peer lending industry is now regulated by the Financial Conduct Authority, which is alert to the risks that my right hon. Friend identifies, but I wish to make a broader observation. In the financial crash, we saw the limitations of the UK’s credit system, where many companies were reliant on bank finance. In the last few years, we have tried to broaden the range of financing options for small and medium-sized businesses, in terms of not just capital markets but innovative new products such as peer-to-peer lending. Using things such as ISA wrappers to encourage this new form of finance for small businesses is a good thing for our economy.