7. Whether net lending to businesses by banks has risen in any of the last 24 months. (902136)

The answer is yes. The most recent data from the Bank of England show that net lending to small and medium-sized enterprises was positive in March, June and November, and the Bank of England’s most recent “Trends in Lending” and “Credit Conditions” reports show that confidence is beginning to return, helped by interventions such as the British business bank.

According to the chamber of commerce, unemployment in the north-east has gone up by 1,000 in the past quarter and by 16,000 in the past year, of whom 13,000 are women. We agree that small and medium-sized businesses should be driving the economy up and unemployment down, but I am told that many in my region see confusing Government schemes and the banks as failing to give them the help and resources they need. What specific things will the Secretary of State do to help people in the north-east and let our people share in the so-called upturn?

Anybody who looks at yesterday’s employment figures will realise that we are in a very positive trend on employment—far in excess of what was predicted. Specifically in relation to the north-east, the hon. Gentleman will know that the main mechanism the Government use to support jobs and companies is the regional growth fund, and I think that the north-east has received more regional growth fund support than almost any other part of the country.

Does the Secretary of State agree that as businesses expand and get more sales, they generate more cash, so we would not necessarily expect net lending to go up?

That is certainly a factor. Indeed, many individual companies—quite apart from the banks—have become highly risk-averse, but I do not doubt that the supply of credit is a serious problem. That is why we have made interventions, such as the British business bank, that are already making a significant difference.

19. May I tell the Secretary of State that in Yorkshire, too, small and medium-sized businesses in particular find it difficult to borrow money from conventional banks, which is why they increasingly look to crowdfunding for finance? Has he seen that Nicola Horlick has set up a new organisation to get into the crowdfunding market, because she too believes that conventional banks do not respond fast enough or efficiently enough? (902152)

The hon. Gentleman is quite right. Indeed, one of the more encouraging signs over the past year is that unconventional forms of lending, such as crowdfunding, are becoming increasingly common. The Government are supporting two of the main schemes that operate on a peer-to-peer lending basis. Lending is expanding very rapidly in that sector for the small and medium-sized companies that need it.