Categorized | Featured, News, Press Release

Small Businesses in the East Midlands lose out from lending

Shadow Small Business Minister, Toby Perkins MP, commenting on the BBA’s new regional breakdown of lending statistics, said:

IMG_9427“Business repeatedly say the biggest thing holding them back is the finance they need to grow, yet these figures show that it is even harder in some areas of the country. And these are the areas where we need to see MORE business growth.’

“The Government promised action on rebalancing but THEY ARE OUT OF TOUCH AND everything points to a failure. Not only is there a lending gap in regions where it is needed but government schemes have reinforced the disparity. A third of the Growing Places Fund to kickstart development went to London and the SE and 44% of Start-Up Loans have also been in London and the South East.

“Labour wants to see entrepreneurship and business growth developed and supported across the country. That’s why we’ve said need more competition within THE banking SECTOR and ALTERNATIVES to banking like peer-to-peer lending. WE ALSO NEED a proper British Investment Bank with a network of regional of local banks to get the finance to business they need.”

Unfortunately government schemes designed to address this (Funding for Lending and Start Up Loans) have just exacerbated the problem:

  • The Conservative-led government’s “Plan for Growth” sets as its key aim a; “’strong, sustainable and balanced growth that is more evenly shared across the country”[i].
  • Government schemes designed to address inequalities and gaps in the market have been unable to deliver regionally balanced growth:
    • The £700m “Growing Places” fund designed to kick start local development projects, only emphasised existing regional divisions.  £255m (over one third of the total) was pumped into London and the south-east , but the north-east of England received just under £34m – 4.5%[ii].
    • The Government’s Start Up Loans project has now lent £50m to 10,000 start up firms. But 44% of these resources found their way to London and the South East, whilst just 5% has gone to the North East.  Even when weighted for the population this record is disproportionately geared towards the south – 15% of the population lives in London, yet 36% of the start-up loans have been delivered there[iii].
  • A full region-by-region break down of figures published jointly by the British Bankers’ Association and the Council for Mortgage Lenders reveals the unequal nature of bank lending in each region:

 

Region

Population

SME lending

SME lending per head of population

East Midlands

4,533,222

£5,490,020,950

£1,211

East of England

5,846,965

£6,877,812,396

£1,176

Greater London

8,173,941

£21,636,784,817

£2,647

North East

2,596,886

£3,069,547,385

£1,182

North West

7,052,177

£11,406,564,426

£1,617

Scotland

5,313,600

£7,726,582,760

£1,454

South East

8,634,750

£13,114,959,866

£1,519

South West

5,288,935

£11,013,025,043

£2,082

Wales

3,063,456

£4,760,612,948

£1,554

West Midlands

5,601,847

£9,386,514,590

£1,676

Yorkshire & Humber

5,283,733

£7,264,574,818

£1,375

GB

61,389,512

£101,747,000,000

£1,657

 

http://www.bba.org.uk/media/article/british-lenders-set-out-levels-of-borrowing-across-country-in-major-move-fo/press-releases/

 

For further information please contact Toby on 020 7219 2320

Comments are closed.

Welcome

I am Toby Perkins, Labour's Member of Parliament for Chesterfield. If you would like to get in touch with me, my office is open and can be reached by phone on 01246 386 286. I also hold regular surgeries so that constituents can meet me and I can take up their concerns. If you would like to make an appointment then please do contact my office. Thank you for visiting.

Contact Toby

Tel: 01246 386286
Email: toby.perkins.mp@parliament.uk
Post: 113 Saltergate, Chesterfield, S40 1NF

Surgeries

I hold regular surgeries for my constituents.
Please call 01246 386286 or email toby.perkins.mp@parliament.uk to make a booking.

Total Politics Top 30 MP Blog

RSS Appearances