The Government are committed to doing everything they can to ensure that appropriate lending to businesses continues. The Chancellor has already announced the creation of UK Financial Investments Ltd, which, in respect of those banks recapitalised by the Government1, will monitor compliance with the conditions we set to maintain the availability and active marketing of competitively priced lending to small businesses and homeowners.
I am today hosting the first meeting of the Small Business Finance Forum. This forum, the establishment of which was announced to the House on 24 October, brings together all banks, small business representative organisations and small businesses themselves to have an informed dialogue to discuss and resolve their concerns on business lending.
I am pleased to announce to the House that today we have agreed the establishment of a new monitoring panel on business lending. This panel, made up of senior government officials from HM Treasury and the Department for Business, Enterprise and Regulatory Reform and representatives of the Bank of England, will monitor and enter into a constructive dialogue with individual lenders on the availability, risk and overall cost of lending to small and medium-sized businesses from the five major banks2. These banks have agreed to provide, in strictest confidence, data on the availability, risk and overall cost of lending to the monitoring panel.
The establishment of the panel, and the agreement of the five major lenders to enter into a dialogue with government on this basis, demonstrates our continuing commitment to ensure that appropriate levels of finance are available for SMEs in the UK.
1 HBOS, LloydsTSB, RBS
2 Barclays, HBOS, HSBC, LloydsTSB and RBS