Recommendation 197

The issue of the relationship between banking and the financing of growth in the UK has been a matter of debate since, at least, the identification of the ‘Macmillan gap’ in 1931. The ‘gap’—addressed in one paragraph of the Report by the Committee on Finance and Industry (the Macmillan Committee)—referred to the difficulty that small and medium-sized enterprises (SMEs) face in securing long-term financing. 291 The debate has resurfaced persistently without any definitive policy resolution. 292 A recent report by the Treasury Committee in 2023 concluded that SMEs are struggling with access to finance and “are generally pessimistic about their ability to raise funds”. 293