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Autumn Statement

House of Lords written question – answered on 14th December 2011.

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Photo of Lord Barnett Lord Barnett Labour

To ask Her Majesty's Government, further to the announcement by the Chancellor of the Exchequer in the autumn Statement that the Business Finance Partnership will launch in 2012 with a new bond issue to help small and medium-sized firms, what rate of interest will be applied to those bonds.

Photo of Lord Sassoon Lord Sassoon The Commercial Secretary to the Treasury

The Government announced at the autumn Statement that they will make available an initial £1 billion, through the Business Finance Partnership, to invest in mid-sized businesses and small and medium-sized enterprises (SMEs) in the UK. This will initially focus on co-investment with the private sector through loan funds. The Government will begin the process of allocating funds early in 2012.

The Business Finance Partnership will not involve a bond issue. It will be funded from government expenditure in the normal way.

However, the Government will also consider options for the Business Finance Partnership to invest through other non-bank lending channels. This could include bond issuances by SMEs and mid-sized businesses, although no decisions on this have yet been taken.

The Government also announced at the autumn Statement that they will establish an industry working group to explore how further to develop access to non-bank lending channels, including forms of bond issuance, for SMEs and mid-sized businesses. The group will be led by the Department for Business, Innovation and Skills and will report by Budget 2012.

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