4. What recent assessment he has made of the level of bank lending to businesses since May 2010. (903711)

In May 2010, business lending was contracting sharply in the aftermath of the financial crisis. The Government have introduced various measures aimed at improving bank and non-bank lending to businesses, in particular the business bank and the funding for lending scheme. Since 2010, survey evidence has suggested that the credit conditions for businesses have improved significantly and gross lending flows have increased.

The latest funding for lending figures show that, shockingly, net lending to small businesses is down by £2 billion at RBS. Should not a bank that still has huge support from the taxpayer be serving Britain’s small businesses better?

The hon. Gentleman is right to point out that there has been an enormous challenge since the financial crisis. Banks still have a long way to go to work out their balance sheets and to ensure that they are again lending to small businesses. RBS announced recently that it has the single goal of becoming the No. 1 SME bank in the UK. Banks are focused on that issue and it is vital that they are.

Does the Minister agree that Labour’s crash caused a massive problem in our banking system, which hurt the ability of banks to finance businesses, and that with the long-term economic plan it will become easier for banks to find the reserves that they need to get more money to business and to help grow the economy further?

My hon. Friend is absolutely right. The financial crisis caused a massive problem in our banking sector. The measures that have been brought in by this Government, such as the funding for lending scheme and the improved impetus towards bank competition, are helping to improve the situation for small businesses—the lifeblood of our economy.

Since funding for lending was introduced, funding for small businesses has actually gone down. Businesses in my constituency tell me that one of the biggest problems is the withdrawal of overdraft facilities by many banks. What is the Minister doing to ensure that such short-term cover is available.

Only recently, the national policy chairman of the Federation of Small Businesses said that funding for lending is helping to bring down the cost of credit for small businesses. It is vital that banks focus on rebuilding business lending, and many of them are doing so. As the economy recovers, we expect that to pick up. Indeed, gross lending is 12% higher than in 2012-13.

Companies in my constituency tell me that confidence is at a new high. In many instances, they are able to fund investment through their own resources. Despite that, gross lending is up over the past 12 months. Does my hon. Friend agree that the concerns that funding for lending would be used for residential property purchases were misplaced?

I agree with my hon. Friend. The Help to Buy scheme accounts for only 0.5% of total mortgage lending, and real house prices remain 15% below pre-crisis levels. There is no evidence to suggest that the funding for lending scheme has led to a property price bubble.