Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has had discussions with the Prudential Regulation Authority on the potential impact of the proposals in its Consultation Paper 16/22 on the Implementation of the Basel 3.1 standards, page 96 paragraph 3.17, on the cost to small and medium-sized enterprises of raising funding against commercial premises.

The PRA is currently consulting on its proposals for Basel 3.1. This includes its proposals for deleting retained EU law including those which relate to the prudential rules on secured and unsecured SME lending. The detailed implementation of the Basel package however, has been delegated to the Prudential Regulation Authority (PRA) as the UK’s expert regulator. The PRA is also consulting and has requested information from firms on specific measures including those relating to lending to SMEs.

The Government continues to work closely with the PRA and businesses to understand the impact of its proposed changes, including for the international competitiveness of the UK and the impact on SME lending. This includes monitoring the EU’s proposals, which also have not yet been finalised.