Asked by: Mark Tami (Labour - Alyn and Deeside)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what support he has put in place for small businesses to access bounce back loans where their banking arrangements are solely with financial institutions that do not offer those loans.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Bounce Back Loan Scheme (BBLS) was designed to ensure that the smallest businesses can access loans of up to £50,000, capped at 25% of firms’ turnover in a matter of just days. The Government is providing lenders with a 100% guarantee on each loan to give them the confidence they need to support the smallest businesses in the country, and no interest payments are due for the first 12 months. As of 20th September, over 1.2 million facilities have been approved through BBLS representing a value of more than £38bn.
The Bounce Back Loan scheme rules do not mandate that the applicant must have a business relationship with the lender in order to receive a BBLS loan. The British Business Bank has so far accredited 28 BBLS lenders, including several non-banks and alternative lenders.
The Government does not intervene in their lending decisions.
Some banks have made good on their intention to invite applications from new customers, and many of those that are still only open to existing customers are regularly reviewing that position. The Government have always made clear to lenders that they should open to new customers as soon as it is operationally possible for them to do so.
Asked by: Drew Hendry (Scottish National Party - Inverness, Nairn, Badenoch and Strathspey)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions officials in his Department have had with the retail banking sector on (a) support for business customers who operated unsecured overdraft facilities for pre-planned expenditure and (b) transitioning these customers into alternative lending arrangements where their operations have been affected by the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government recognises that the outbreak of COVID-19 may lead to businesses facing financial difficulty and uncertainty. In response, the Government has set out an unprecedented package of support for businesses, including the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), and the Bounce Back Loan Scheme (BBLS).
Under CBILS, borrowers can apply for finance facilities of up to £5 million from 95 accredited lenders. No interest or fees will be charged to the customer during the first 12 months. Under CLBILS, borrowers can apply for finance facilities of up to £200 million (subject to a cap of 25% of turnover). Overdraft facilities are available under both schemes. Bounce Back Loans are also available for the smallest businesses to access finance quickly. Businesses can access loans of up to £50,000, subject to a maximum of 25% of turnover, with no repayments due for the first 12 months. To date, these schemes have provided over £40bn finance to over 970,000 businesses. The Government continues to work with banks and other finance providers to help SMEs access the finance they need.
More broadly, many lenders are also offering support for their customers outside the Government-backed loans schemes, including through for example, repayment holidays and arranging fee-free overdraft extensions.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government what assessment they have made of whether some banks are requiring companies to freeze all loans and leasing with other financing institutions before agreeing loans under the Coronavirus Business Interruption Loan Scheme; and whether they consider such conditions are appropriate in the context of an 80 per cent guarantee from them.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Since the launch of the Coronavirus Business Interruption Loan Scheme (CBILS), the Government has worked closely with the financial services sector to ensure that companies receive the full benefits from this support.
Accredited lenders are responsible for providing loans under the CBILS. Lending decisions on whether a business is eligible to access the CBILS are fully delegated to the accredited lenders, and individual lending decisions remain at the discretion of these lenders.
My Rt hon Friend the Secretary of State continues to work with banks and other finance providers to help SMEs access the finance they need and has discussed with these organisations the alternative forms of support for businesses that they are offering. The Government welcomed the statement by UK Finance on behalf of the financial sector which announced that banks, building societies and credit card providers are committed to supporting their business customers in continuing to trade.
Asked by: Baroness Bowles of Berkhamsted (Liberal Democrat - Life peer)
Question to the Department for Business, Energy and Industrial Strategy:
To ask Her Majesty's Government whether money laundering checks are impeding businesses from approaching alternative lenders to their own bank for the Coronavirus Business Interruption Loan Scheme; what percentage of loans are granted via applications to a different lender; and whether in-person presentation and certifications are required for money laundering checks to be carried out.
Answered by Lord Callanan - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
It is important that thorough due diligence is conducted by lenders as part of the Coronavirus Business Interruption Loan Scheme (CBILS).
Businesses are free to apply for a CBILS facility from any of the 50+ accredited lenders. Lending decisions are fully delegated to the lenders. As such, money laundering checks are subject to each lender’s internal policy. The robustness of these policies is thoroughly tested before a lender can become accredited to CBILS.
The British Business Bank does not hold information regarding an applicant’s banking or borrowing history.
Asked by: Lord Taylor of Warwick (Non-affiliated - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the impact of bank branch closures in rural areas on access to financial services, in the light of the low levels of mobile banking use in rural areas.
Answered by Lord Bates
The Treasury does not make assessments of branch closures, or alternative methods of banking, as these are commercial matters for banks. However, Government believes it is important the impact of branch closures on communities must be understood, considered and mitigated where possible.
The Government supports the industry’s Access to Banking Standard which commits banks to ensure personal and business customers are better informed about branch closures and the reasons for them closing. It also helps customers to understand the options they have locally to continue to access banking services, including specialist assistance for customers who need more help. The Access to Banking Standard is monitored and enforced by the independent Lending Standards Board.
Government also considers it important that all customers, wherever they live and especially those who are vulnerable, can still access over the counter services. That is why the Government supports the Post Office’s Banking Framework Agreement, which enables 99% of banks’ personal and 95% of banks’ business customers to withdraw cash, deposit cash and cheques, and make balance enquiries at a Post Office counter via its network of 11,600 branches.
The Government is committed to ensuring that communities across the UK are fully aware of the important services that remain available to them at their local Post Office, even if their bank branch is closed. The Post Office and UK Finance have committed to work together to raise public awareness of the banking services available at the Post Office for individuals and SMEs, which the Government welcomes.
Asked by: Jamie Stone (Liberal Democrat - Caithness, Sutherland and Easter Ross)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, whether his Department plans to evaluate the effectiveness of the RBS mobile banking service as a result of the closure of RBS branches; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Treasury does not make assessments of branch closures, or alternative methods of banking, as these are commercial matters for banks. However, Government believes it is important the impact of branch closures on communities must be understood, considered and mitigated where possible.
The Government supports the industry’s Access to Banking Standard which commits banks to ensure personal and business customers are better informed about branch closures and the reasons for them closing. It also helps customers to understand the options they have locally to continue to access banking services, including specialist assistance for customers who need more help. The Access to Banking Standard is monitored and enforced by the independent Lending Standards Board.
Government also considers it important that all customers, wherever they live and especially those who are vulnerable, can still access over the counter services. That is why the Government supports the Post Office’s Banking Framework Agreement, which enables 99% of banks’ personal and 95% of banks’ business customers to withdraw cash, deposit cash and cheques, and make balance enquiries at a Post Office counter via its network of 11,600 branches.
The Government is committed to ensuring that communities across the UK are fully aware of the important services that remain available to them at their local Post Office, even if their bank branch is closed. The Post Office and UK Finance have committed to work together to raise public awareness of the banking services available at the Post Office for individuals and SMEs, which the Government welcomes.
Asked by: Lord Bird (Crossbench - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what steps they intend to take to support, promote and increase the ethical personal lending market as an alternative to high-cost credit providers.
Answered by Lord Bates
The government is committed to delivering a well-functioning and sustainable consumer credit market which is able to meet the needs of all consumers.In March, the government hosted the first meeting of the Financial Inclusion Policy Forum, a new key initiative bringing together government, regulators, industry and the third sector to coordinate action and provide leadership in tackling these challenges. The Forum’s mission is to ensure that individuals, regardless of their background or income, have access to useful and affordable financial products and services, including affordable credit.
The government also supports credit unions, which provide an affordable alternative to high-cost credit. In the Autumn Budget 2017, the government announced its intention to help the sector expand by increasing the number of potential members of credit unions from two million to three million. In addition, from this year a greater proportion of funds recovered from illegal money lenders will be allocated to incentivise vulnerable people to join, save, and borrow with a credit union instead of turning to loan sharks.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what assessment they have made of the findings contained in the Bank of England's Money and Credit June 2017 Statistical Release that there was (1) a £0.2 billion fall in loans to non-financial small and medium enterprises, and (2) an £8.2 billion rise in loans to large business, in the year to June.
Answered by Lord Bates
The Treasury monitors the Bank of England’s Money and Credit statistical releases and other statistical publications.
The Government is supporting lending to SMEs in a variety of ways, such as through the establishment of the British Business Bank to make finance markets work better for small businesses. The Government is also helping alternative lenders which lend to small businesses, for example through support for challenger banks; introducing a bespoke regime for peer-to-peer lending; and structural interventions such as the bank referral scheme and the SME credit data sharing scheme.
Asked by: Rachel Reeves (Labour - Leeds West)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps the Government is taking to support challenger banks who have entered or are looking to enter the small and medium-sized enterprise lending market.
Answered by Steve Barclay - Secretary of State for Environment, Food and Rural Affairs
The information requested on the number of new entrant banks offering finance for small and medium-sized enterprises is not held by the Treasury. Responsibility for the authorisation of new banks rests with the Prudential Regulation Authority (PRA). The PRA’s Annual Competition Report for 2017 states that since its formation in April 2013, the PRA has authorised 25 new banks in total. The report can be found at http://www.bankofengland.co.uk/publications/Documents/annualreport/2017/compreport.pdf
The Government has taken a number of steps to support challenger banks. This includes: supporting the PRA and FCA to set up the New Bank Start-up Unit to help prospective new banks enter the market and through the early days of authorisation; establishing competition objectives for the FCA and PRA; and launching the finance platforms scheme to help small businesses whose finance applications have been declined by their bank explore alternative finance options, including challenger banks.
Asked by: Julian Knight (Independent - Solihull)
Question to the Department for Levelling Up, Housing & Communities:
To ask the Secretary of State for Communities and Local Government, what discussions his Department has had with the Homes and Communities Agency on the use of intermediaries such as banks and alternative lenders to increase finance available for small builders.
Answered by Alok Sharma - COP26 President (Cabinet Office)
My Department and the Homes and Communities Agency speak regularly to banks and lenders about increasing development finance to small and medium sized builders. We have contributed £50 million to the Housing Growth Partnership, with Lloyds Banking Group also putting in £50 million to increase overall lending to get homes built. We will continue to explore opportunities to ensure maximum impact of funding is delivered across the sector.