Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Prudential Regulation Authority Consultation CP 16/22 on the Implementation of the Basel 3.1 standards, whether he has made an assessment of the potential impact of the proposals for SME lending on the balance of risk on (a) secured and (b) unsecured loans.

The Government is currently consulting on its proposals for Basel 3.1. This includes its proposals for deleting retained EU law including that which relates to the prudential rules on secured and unsecured SME lending. The detailed implementation of the Basel package however, has been delegated to the UK’s expert regulator, the Prudential Regulation Authority (PRA). The PRA is also consulting and has requested information from firms on specific measures including those relating to SME lending.

The Government continues to work with the PRA and businesses closely to understand the impact of the proposed changes, including for competitiveness with the EU and the impact on SME lending. This includes monitoring the EU’s proposals, which also have not yet been finalised.