It was a delight to return to the Treasury Select Committee earlier today to talk about the importance of unlocking SME lending, and increasing transparency and competition in the wider banking sector.
The TSC’s inquiry into SME lending has been focusing on access to finance for SMEs, the scope for opening up the sector to more competition, and the treatment of SMEs by banks. Until I became City Minister very recently, I had been doing the questioning, so it was interesting to be on the other side of the table with old colleagues and friends.
My enthusiasm for encouraging competition is stronger than ever. I certainly think that the influence of the TSC on the competition agenda has been felt across the Treasury, as well as on transparency. Good progress is being made on encouraging new challenger banks to establish themselves, and we are making it easier to identify geographic gaps in SME lending from the big banks. I think we were all quite taken aback in 2010 when we discovered that Metro Bank was the first new full service banking licence in 100 years.
I recently launched the Business Banking Insight, and I was pleased to have the opportunity to talk this through with the TSC in more detail. There are also new diverse sources of finance for SMEs which have been rather successful, including the Funding for Lending Scheme.
You can watch the full exchange below, or read the transcript here.