Business Growth
Oral Answers to Questions — Business, Innovation and Skills
10:30 am
Henry Smith (Crawley, Conservative)
What support his Department is giving to small and medium-sized businesses to enable them to grow.
Greg Clark (Minister of State (Decentralisation), Communities and Local Government; Tunbridge Wells, Conservative)
To drive growth, we are reducing the cost of lending to small businesses by keeping interest rates low and through specific measures such as the national loan guarantee scheme. We are also stripping away red tape, including a three-year moratorium on domestic regulation for micro-businesses.
Henry Smith (Crawley, Conservative)
Will my right hon. Friend update the House on the progress the Government have made in reducing the burden of EU regulation on small and medium-sized enterprises?
Greg Clark (Minister of State (Decentralisation), Communities and Local Government; Tunbridge Wells, Conservative)
Yes. My hon. Friend will be aware that in Brussels the Prime Minister secured an agreement from the EU Commission that any future regulation should be assumed not to apply to small businesses unless a case were proved that it needed to do so. The Prime Minister has secured a significant step forward.
Mark Lazarowicz (Edinburgh North and Leith, Labour)
The most recent Bank of England survey says that smaller firms continue to report that they are unable to obtain credit and that it has become harder to secure long-term funding. That issue is raised by Members on both sides of the House every month at BIS questions. The Government may have introduced some measures to provide finance to small businesses, but they are clearly not doing enough. Is it not time to develop some new policies?
Greg Clark (Minister of State (Decentralisation), Communities and Local Government; Tunbridge Wells, Conservative)
All Members of the House recognise the need to encourage banks to lend to small businesses. There is some good news; the volume of lending to small businesses in 2011—the latest year for which figures are available—was £75 billion, a rise of 13%, but there is more to be done. With my colleagues in the Department for Business, Innovation and Skills, we are doing everything we can to encourage banks to lend to small businesses.
Neil Carmichael (Stroud, Conservative)
Will the Minister join me in congratulating Advanced Insulation, a firm in my constituency, which has just won the Queen’s award for enterprise? Does he agree that such firms are emblematic? We need to demonstrate that we are good at innovating and exporting, and that that is the direction of travel for economic growth.
Greg Clark (Minister of State (Decentralisation), Communities and Local Government; Tunbridge Wells, Conservative)
I will indeed join my hon. Friend in congratulating that company. In fact, a record number of the recent Queen’s awards, announced last month on Her Majesty’s birthday, were for small businesses, which shows that this country’s small businesses have a huge amount to contribute to the future success of the nation.
Toby Perkins (Chesterfield, Labour)
Yesterday I met 35 small businesses that borrowed money to fuel growth but now feel that they were mis-sold interest rate swap products by their banks. There is a real urgency to investigate that issue before more otherwise healthy companies are brought down. Will the Minister join us in calling for banks, while they are investigating whether these products were mis-sold, not to foreclose on companies that are falling behind because of these products?
Greg Clark (Minister of State (Decentralisation), Communities and Local Government; Tunbridge Wells, Conservative)
If the allegations are correct, the companies will need assistance to cope. An investigation on that is about to conclude. I will take the matter forward with the hon. Gentleman and am happy to discuss it outside this place with his Front Benchers.