Skip to main content

Leaving the EU: SMEs

Volume 617: debated on Tuesday 29 November 2016

7. What assessment he has made of the potential effect on the ability of small and medium-sized businesses to raise capital of the UK leaving the EU. (907545)

The UK remains very much open for business and the Government are committed to supporting SMEs to access the capital they need to grow, as demonstrated by the £400 million increase in funding for the British Business Bank announced at the autumn statement, unlocking £1 billion of funding.

The Minister will be aware that more than £10 billion of EU structural funds is invested annually in the UK, particularly in Wales. Indeed, in my constituency of Ogmore, many small and medium-sized businesses have benefited from Jobs Growth Wales, which is a success of the Welsh Labour Government. Will the Minister give a cast-iron guarantee to the people of Wales that structural funding will continue, pound for pound, after we leave the European Union?

We want to see the economy benefit every part of the UK. It is interesting to note that there are almost 1 million new businesses in our country since 2010, and I note the Prime Minister’s announcement at the CBI conference about the new patient capital review, which will be interesting, I am sure.

Does my hon. Friend agree that Brexit is essentially a red herring for SMEs in this context, that what matters is that the Government create the right conditions for businesses to do business and that the banks are in a sufficiently capitalised position to lend money?

I agree absolutely with my hon. Friend. It is about creating an economic environment in which businesses can grow and thrive. The British economy is strong and will continue to be strong as we prepare for our departure from the EU.

What would be the impact on SMEs, particularly those in the supply chain of big manufacturing firms such as Jaguar Land Rover or Airbus, if we were to leave the EU without full access to the single market or a free trade deal with the rest of the EU and if we were forced to fall back on World Trade Organisation rules and tariffs?

The Government have been clear that we will not comment on every turn of the negotiations. Indeed, the negotiations have yet to start. However, we are absolutely committed to getting the best possible deal we can.

Does the Minister agree that the City of London plays a very important part in helping businesses to raise capital and that maintaining clearing in euros in the City of London will be an important way to ensure that the City retains that status?

The City of London is a very important financial centre and we fully intend it to remain as such. Clearing is an important element of the negotiations, and we will do all we can to retain London and the UK as a financial centre of excellence.