Question

To ask the Secretary of State for Business, Innovation and Skills, what steps his Department is taking to resolve the mis-selling of Enterprise Finance Guarantee loans to small business by the Royal Bank of Scotland.

The Enterprise Finance Guarantee (EFG) is a valuable programme that helps viable businesses get access to finance where they have insufficient security or an inadequate track record. Since launch, EFG has supported SMEs by enabling over 23,000 loans with a total value of some £2.4bn (as at 31 December 2014) and has a significant wider economic benefit. Funding for up to a further £500 million of lending was made available for 2015/16 in the 2014 Autumn Statement.

Following evidence of concerns of lending by the Royal Bank of Scotland (RBS) in August 2014, the Department asked RBS to instigate an internal review into this issue. The findings of that review and a proposed course of action were presented at a meeting with the British Business Bank in December 2014, and senior executives from RBS met my right hon. Friend the Secretary of State for Business, Innovation and Skills on 14 January 2015. I have asked the British Business Bank – which now administers the programme on behalf of the Department – to continue to closely monitor the action being taken by RBS to address these issues. I have been given assurance from RBS that they will put right any cases where they are at fault to ensure that no detriment is suffered by either the borrower or the taxpayer.