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Select committee inquiry

SME Finance inquiry

Closed

Treasury Committee · Opened 30 January 2018 · Closed 11 January 2019

Inquiry on parliament.uk ↗

What the inquiry looked at

“Report: SME Finance Report: SME Finance (PDF 754 KB) This inquiry will take a broad look at the state of the market for SME finance. In particular, it will consider the extent of competition in the market, the various sources of funding available to small businesses, including crowdfunding and peer-to-peer lending, and whether the current regulatory framework provides appropriate protection to SMEs when they borrow money, taking into account the lessons to be learned from RBS’ Global Restructuring Group (GRG).”

The committee's words, from the inquiry page on parliament.uk ↗.

What the government said

The government responded on 11 January 2019.

Summary written by Accountability Index from the government's response.

The government welcomes the Committee's report and agrees with some recommendations, but does not accept that SME lending should be brought into regulation or that a Financial Services Tribunal should be created.

  • On commissioning further work on SMEs' attitudes to finance, the government says it would be "premature", citing quarterly data already available, but the Treasury "will continue to keep the matter under review".
  • On the regulatory perimeter, it "does not believe that there is a clear case" for bringing SME lending into regulation, citing direct costs such as FCA fees and indirect costs such as narrower product choice.
  • On redress, it states a preference for an ombudsman-style approach over a Tribunal, noting a Tribunal would need primary legislation. It supports the FOS expansion, which it says will make "well over 99%" of businesses eligible from 1 April 2019.
  • It supports the banking industry's proposal for a voluntary ombudsman scheme for businesses with turnover of £6.5m to £10m, which it says will be established "by September next year".

Read the government's response ↗ Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 30 January 2018 to its close on 11 January 2019.

  1. Oral evidence 6 sessions
  2. Report 26 Oct 2018
  3. Government response 11 Jan 2019
  4. Correspondence 4 letters

What it recommended

The committee's recommendations are not listed here yet. Read them in 24th Report - SME Finance ↗ on parliament.uk.

Evidence

Oral evidence sessions 6

Correspondence 4 letters