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Bank Lending (Retford)

Volume 529: debated on Thursday 9 June 2011

7. What discussions he has had with representatives of banks on the performance of banks in lending to businesses (a) in Retford and (b) nationally. (57783)

I regularly have discussions with senior representatives from all the major banks, as well as smaller and specialised lenders, at which we discuss their lending to small businesses, but sadly, not yet in Retford.

As the Secretary of State knows, Retford is the barometer of his Government’s success or failure with the economy and the news is not good, because small businesses are being bled dry by the banks, which are failing to lend. When they do lend, they do so at excessive costs, including the excessive use of invoice financing. It will be too late for small businesses if the Secretary of State does not wake up and do something about that as they will go out of business. What will he do?

The hon. Gentleman’s constituency may well be a barometer of Government performance, but he has obviously overlooked the fact that in it, 19 businesses were offered loans, backed by the enterprise finance guarantee, totalling almost £2 million. That is help in a purely practical sense.

The hon. Gentleman makes a specific point on types of financing. Because of the difficulties of lending against property, the emergence of forms of lending against assets or future transactions is actually a positive diversification of finance.