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Bank Lending

Volume 592: debated on Thursday 12 February 2015

10. What recent assessment he has made of the availability of finance for small firms and the level of lending by banks to small businesses. (907607)

Gross lending by the banks to small and medium- sized businesses has increased by 25% over the last year, and recent net lending figures have been positive. This week, my right hon. Friend the Prime Minister announced Help to Grow, to boost scale-up finance, building on the success of our start-up loans.

Fine words, but how does the Minister reconcile that with the Bank of England’s money and credit statistics, which say that lending to small businesses has fallen in the last quarter by £1 billion? Too many schemes and not enough action.

On the contrary, the gross lending is up sharply—around a quarter over the past year—and there are also greater repayments as businesses that are becoming stronger are able to pay down some of their debts. That means that the net figure has been increasing in recent months. We need to look through the individual figures and see the bigger picture of the expansion. However, there is of course much more to do to recover from the banking crash that occurred in 2008.

What progress are the Government making to bring justice and recompense to the thousands of small businesses that were mis-sold—and perhaps still are being mis-sold—interest rate swap agreements?

I know about this issue very well, not only in a ministerial capacity but because Mr Ian Parker is one of the main advocates for a solution to this, and he is a constituent of mine. It is important to get to the bottom of this issue, but it is complicated. There is work going on across the Financial Conduct Authority and the Treasury, as well as the Department for Business, Innovation and Skills, to ensure that we get to the bottom of it and that people get appropriate recompense.