Oral Answers to Questions

Annette Brooke Excerpts

Thursday 6th September 2012 Commons Chamber

[Christopher Pincher (Tamworth) (Con)]

13. What recent progress he has made in supporting small and medium-sized businesses.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

20. What recent steps he has taken to support small and medium-sized businesses.

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

In total, 450,000 new businesses were registered last year compared with 360,000 in 2009-10. We have cut corporation tax rates to an all-time low, we continue to cut red tape, we are incentivising bank lending, and we have a range of other schemes to support high-growth businesses in particular.

[Michael Fallon]

I am grateful to my hon. Friend. He is exactly right: cheaper credit is the key for many small companies. The whole aim of the funding for lending scheme is to ensure that banks pass on the reduction in the cost of the money that they themselves are accessing. The Bank of England will monitor that, but my Department will check that each bank continues to do it.

[Annette Brooke]

I welcome the Minister to his post. Undoubtedly, many small firms are getting a raw deal from the banks, with increased charges and limited credit. The board of Wimborne business improvement district is exploring the possibility of setting up a “bank” of Wimborne in conjunction with a local credit union, the idea being to go back to old-style banking with strong local relationships. What comment would the Minister make about that?

[Michael Fallon]

I know that my right hon. Friend the Secretary of State has already met my hon. Friend’s constituents to discuss the issue, and I believe that he has already met the founder of the Bank of Dave as well. One of the recommendations of the Independent Commission on Banking was that the Financial Services Authority should look again at the requirements for a banking licence, to see whether they are too onerous and disproportionate for the providers of very small credit. We expect the FSA to publish its recommendations shortly and I would be very happy to discuss them with my hon. Friend.