Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what assessment he has made of the effect of large banking institutions charging negative interest rates on the small business sector.

The interest rates banks charge on their products is a commercial decision for them. The Government is aware that RBS and NatWest have written to businesses stating that a negative base rate may lead them to introduce negative interest rates, but they have not actually done so as yet. The base rate is set by the Bank of England’s independent Monetary Policy Committee, and the Chancellor of the Exchequer welcomed the decision of the Committee to use monetary policy to support the economy through this period of adjustment. As recent figures on jobs and growth have shown, we enter this period of adjustment from a position of economic strength.