To ask the Chancellor of the Exchequer, with reference to the SME lending proposals in the PRA Consultation CP 16/22 on the Implementation of the Basel 3.1 standards, what assessment he has made of the potential impact of those standards on the supply of funding available to SMEs in (a) the UK and (b) Shipley constituency.

To ask the Chancellor of the Exchequer, what discussions his Department has had with the (a) Bank of England, (b) Prudential Regulation Authority and (c) Financial Conduct Authority on the potential impact of removing the support factor for SME lending.

To ask the Chancellor of the Exchequer, with reference to the proposals on SME lending in the PRA Consultation CP 16/22 on the Implementation of the Basel 3.1 standards, what assessment he has made of the effectiveness of those proposals on meeting the PRA’s mandate to promote competition in the banking sector.

To ask the Chancellor of the Exchequer, with reference to the proposals on SME lending in the PRA Consultation CP 16/22 on the Implementation of the Basel 3.1 standards, what assessment he has made of the impact of the proposals on the ability of challenger banks to compete with the principal six banks on SME lending.

The Government is currently consulting on its proposals for Basel 3.1. This includes proposals for deleting retained EU law including those which relate to the prudential rules on 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 consulting under an accountability framework agreed by Parliament, and has requested information from firms on specific measures including those relating to lending to SMEs.

The consultation can be found here:

https://www.bankofengland.co.uk/prudential-regulation/publication/2022/november/implementation-of-the-basel-3-1-standards

The Government continues to work closely with the PRA and businesses to understand the impact of potential changes including for the international competitiveness of the UK, the impact on SME lending and the nature of competition between banks that operate in the domestic market.