Oral Answers to Questions

Mark Spencer Excerpts

Thursday 17th February 2011 Commons Chamber

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

4. What recent progress he has made in his discussions with representatives of the banking industry on increasing levels of lending to small and medium-sized enterprises.

[Mr Mark Spencer (Sherwood) (Con)]

16. What recent progress he has made in his discussions with representatives of the banking industry on increasing levels of lending to small and medium-sized enterprises.

[The Secretary of State for Business, Innovation and Skills (Vince Cable)]

As announced last week in the House by the Chancellor, the UK’s five major banks have stated a capacity and willingness to lend £190 billion of new credit to business in 2011. That includes £76 billion of new lending to SMEs, which is a 15% increase on the amount lent in 2010. If demand exceeds that, the banks will lend more.

--- Later in debate ---

[Vince Cable]

The figures will be independently monitored by the Bank of England and published quarterly. My right hon. Friend makes a helpful suggestion, and I will examine whether the figures can be disaggregated in that way.

[Mr Mark Spencer (Sherwood) (Con)]

Will the Secretary of State assure me that he will take no lessons on the banking system from the shadow Chancellor, who designed the system that failed us so badly, and who did nothing to encourage transparency and control bonuses? Will he ensure that banks start to lend to small businesses?

[Vince Cable]

Indeed. In not only the agreement but our wider policy, we have advanced considerably on the position a year ago. We inherited a banking system that had collapsed, in part because of failures of regulation. We have introduced much more effective and higher levels of tax on the banks, because of the profits on their balance sheets. We have introduced greater transparency, which will add to legislation. Through the banking commission, we have set up a process of fundamental structural reform.