Asked by: Lord Soames of Fletching (Conservative - Life peer)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps he is taking to improve competition in small and medium-sized enterprise bank lending; and if he will make a statement.
Answered by Harriett Baldwin
The Government has driven a wide ranging programme of reforms to help Small and Medium Sized Enterprises to gain access to finance and to support competition in the SME lending market.
The Government introduced the Current Account Switch Service which is a free-to-use service for customers that makes it easier, quicker and more reliable for customers to switch banks. At Budget 2015 the scheme was extended to include 99% of SMEs.
This year the Government will lay final legislation requiring major UK banks both to share SME credit information with other lenders and to offer to share the details of SMEs rejected for a loan with online platforms that can match them to alternative finance providers. Alongside these reforms, the British Business Bank is increasing and diversifying the supply of finance available to SMEs, and aims to facilitate up to £10 billion of finance by 2019.
Asked by: Adam Afriyie (Conservative - Windsor)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps his Department has taken to boost the growth of the financial technology industry.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
As part of our long term economic plan, the Government is committed to supporting the continued growth of the Financial Technology (FinTech) sector. The Government has taken a number of steps to achieve this, including:
Creating a new Payments Systems Regulator (PSR), which will ensure that smaller banks and alternative providers of finance – including FinTechs – can access payment systems in a fair and transparent way, and thereby contributing to a fairer and more competitive payments industry. The PSR will open its doors on 1 April this year.
Committing to additional funding of £100m to the British Business Bank’s Investment Programme – including funding for FinTech.
Launching the GO-Science’s Blackett Review on FinTech Futures, which looks ahead 10 years to the future and identify what the technologies, enablers and barriers are that will shape the future of the UK FinTech sector.
Naming the big banks that will have to share credit data, and refer on SMEs they reject for finance – helping alternative finance providers, including FinTech firms, to lend more effectively;
Supporting the development of the peer-to-peer lending and crowdfunding market: consulting on ISA eligibility for crowdfunded debt securities; announcing we will review EU regulations standing in the way of P2P institutional lending; and creating a bespoke regulatory framework for P2P.
Most recently at budget 2015, we announced a further package of measures to build on the government’s wide-reaching programme of reform to drive competition in banking and FinTech, including announcing that:
The Government intends to apply anti-money laundering regulation to digital currency exchanges in the UK, launch a new research initiative into digital currency technology, with £10 million additional funding, and work with the British Standards Institution and the digital currency industry to develop voluntary standards for consumer protection.
Gocompare will launch the first personal current account comparison tool making use of customers’ bank midata releases on 26 March 2015.
The Government will work with the banks and FinTech firms to develop an open API (Application Programming Interface) standard for banks, by the end of the year.
the Financial Conduct Authority’s (FCA) ‘Project Innovate’ will work with HMT and the Prudential Regulation Authority (PRA) to investigate the feasibility of developing a regulatory ‘sandbox’ for financial services innovators
Innovate Finance has agreed to deliver its FinTech regional strategy through a series of local partnerships; the first partnership has already been established in Leeds, and further partnerships will be established in Manchester and Edinburgh by April, and in Newcastle, Bristol and other centres before the end of the year.
Asked by: Lord Soames of Fletching (Conservative - Life peer)
Question
To ask the Secretary of State for Business, Innovation and Skills, what steps he is taking to improve business access to (a) bank and (b) non-bank finance; and if he will make a statement.
Answered by Matt Hancock
The Government has taken bold and innovative steps to improve business access to bank and non-bank finance.
A key development has been the establishment of the British Business Bank (BBB) which became operationally independent in November 2014. For the first time, the UK has a permanent institution committed to correcting business finance market failures and driving innovation and competition in the markets. Similar institutions have long been a feature in the access to finance landscape in other countries.
The Bank has made significant progress not just in terms of its establishment but also by the amount of investment that it is already stimulating. Business Bank programmes are currently supporting £1.8bn of finance to over 43,000 smaller businesses, with a further £1.2bn of finance to mid-cap businesses. Over the next five years, it aims to unlock further significant bank and non-bank finance for viable smaller businesses through programmes such as the Enterprise Finance Guarantee, the Start Up Loan programme, the Investment Programme and venture capital programmes.
Government is also legislating to improve business access to finance. Provisions in the Small Business, Enterprise and Employment Bill will require major banks to refer declined small business borrowers to lending platforms. This will help put borrowers in touch with alternatives to their main bank and stimulate the growth of alternative providers. Banks will also be required to share credit data on their small and medium sized business customers with other finance providers via credit reference agencies to make it easier for alternative lenders to lend.
Government is taking steps to improve the information and advice available to potential borrowers through schemes such as ‘My Business Support Tool’. This helps businesses find the support appropriate for their size and situation quickly with businesses being able to speak to, or webchat, with a helpline adviser direct using the Business Support helpline.
Government is also improving competition and choice in finance markets. For example, authorisation processes for new banks have been streamlined, and the seven day Current Account Switching Service will be extended to businesses with a turnover of up to £6.5m from the beginning of April. The British Business Bank’s Investment Programme is co-investing up to £400 million into alternative finance providers, including challenger banks and non-bank lenders such as crowd funding platforms. In addition, the Competition and Market Authority is carrying out a market investigation of SME banking, with provisional findings and a possible remedies notice (if required) expected in September.
Government is using the tax system to support the development of alternative financing. Tax changes announced in last year’s Autumn Statement, for example, will support the development of peer to peer lending and crowdfunding platforms by allowing investors to offset losses from bad loans against other peer to peer income. In addition, the government is boosting the private placement market, which provides long-term funding for business from insurance companies and other non-bank sources, by making an exemption from withholding tax for interest on private placements.
The overall business finance environment is improving. Gross bank lending to small businesses in 2014 was 24% higher than in 2013 and, according to the latest SME Finance Monitor report, 76% of applications for loans and overdrafts made within the last 18 months were successful. Gross lending to all non-financial businesses, including large companies, in 2014 was 16% higher than in 2013. Research published by Nesta in November 2014 shows that the alternative finance market is also increasing rapidly. In 2014, the market raised £1.19 billion for businesses, more than double that raised in 2013.
Asked by: Philip Hollobone (Conservative - Kettering)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps he is taking to improve access to bank lending (a) in general and (b) for large-scale new housing developments.
Answered by David Gauke
The Government has taken significant action to improve access to bank lending, notably through the Funding for Lending Scheme, as well as supporting non-bank lending channels via the British Business Bank
The Government is also implementing further major reforms to boost competition in the provision of smaller business finance through the Small Business, Enterprise and Employment Bill; these include the measures to improve availability of credit information on small and medium-sized enterprises (SMEs) and to match SMEs rejected for finance with challenger banks and alternative finance providers.
The Government has also put in place a series of measures to unlock housing development by providing loans to fund major infrastructure and build costs of housing schemes through its Large Sites Infrastructure Programme, Get Britain Building Programme and Builders Finance Fund.
Asked by: Lord McCrea of Magherafelt and Cookstown (Democratic Unionist Party - Life peer)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what steps he is taking to increase access to bank lending for businesses in Northern Ireland.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
The Government has taken significant action to increase bank lending to businesses throughout the UK, including through the Funding for Lending Scheme, and through supporting non-bank lending channels via the British Business Bank.
The Government is also implementing further major reforms to boost competition in the small and medium sized enterprise (SME) lending market through the Small Business, Enterprise and Employment Bill; most notably the measures to improve access to SME credit information and to match SMEs rejected for finance with challenger banks and alternative finance providers that are looking to offer finance.
Furthermore, in Autumn 2013 a joint United Kingdom and Northern Ireland Ministerial Task Force was set up to look at ways to promote lending and increase support specifically for businesses in Northern Ireland.
Asked by: Sammy Wilson (Democratic Unionist Party - East Antrim)
Question
To ask the Secretary of State for Business, Innovation and Skills, how many loans have been made by the British Business Bank to companies based in Northern Ireland.
Answered by Matt Hancock
The British Business Bank became an operationally independent organisation on 1st November 2014. It does not make loans directly to businesses. Instead, it works with private sector delivery partners to deliver all of its programmes, allowing it to pull in significant amounts of private sector funding.
The Bank’s programmes are already supporting businesses in Northern Ireland. Through the Start Up Loans programme 205 loans have already been offered to start-up businesses in Northern Ireland with a total value of nearly £1m. The Enterprise Finance Guarantee programme has facilitated lending of £39.3m to 271 businesses.
Additionally, the Bank’s investment programmes, which provide lending through alternative finance providers, have so far facilitated 112 loans to businesses in Northern Ireland with a total value of £5.9m.
Asked by: Sammy Wilson (Democratic Unionist Party - East Antrim)
Question
To ask the Secretary of State for Business, Innovation and Skills, what the value is of loans made to businesses in Northern Ireland by the British Business Bank.
Answered by Matt Hancock
The British Business Bank became an operationally independent organisation on 1st November 2014. It does not make loans directly to businesses. Instead, it works with private sector delivery partners to deliver all of its programmes, allowing it to pull in significant amounts of private sector funding.
The Bank’s programmes are already supporting businesses in Northern Ireland. Through the Start Up Loans programme 205 loans have already been offered to start-up businesses in Northern Ireland with a total value of nearly £1m. The Enterprise Finance Guarantee programme has facilitated lending of £39.3m to 271 businesses.
Additionally, the Bank’s investment programmes, which provide lending through alternative finance providers, have so far facilitated 112 loans to businesses in Northern Ireland with a total value of £5.9m.
Asked by: Lord McCrea of Magherafelt and Cookstown (Democratic Unionist Party - Life peer)
Question to the HM Treasury:
To ask Mr Chancellor of the Exchequer, what further steps he plans to take to encourage banks to lend money to small and medium-sized businesses.
Answered by Andrea Leadsom - Parliamentary Under-Secretary (Department of Health and Social Care)
The Government has taken significant action to increase bank lending to smaller businesses, such as through the Funding for Lending Scheme, and through supporting non-bank lending channels via the British Business Bank.
In Autumn 2013 a joint United Kingdom and Northern Ireland Ministerial Task Force was set up to look at ways to promote lending and increase support for businesses in Northern Ireland.
The Government is also implementing further major reforms to boost competition in the provision of smaller business finance through the Small Business, Enterprise and Employment Bill; these measures intend to improve access to SME Credit Information and to match SMEs rejected for SME finance with challenger banks and alternative finance providers that are looking to offer finance.