The cross-party Treasury committee will look at the ease of access to financing for small businesses, the significance of financial innovation, and the oversight of small business financing.
The move comes as businesses seeking financial help are burdened as the Bank of England increases interest rates to their highest level since the 2008 financial crisis.
The Conservative chair of the committee, Harriett Baldwin, stated: “Small businesses are the lifeblood of local communities, powering economic growth and fostering innovation and an entrepreneurial spirit. As a committee, we’ll be examining whether small businesses are able to access the finance they need to grow and develop, whether there is adequate regulation of the sector, and if (the) government can take a more active role to support business growth.”
MPs are set to probe the role of the Bank’s term funding scheme.
The role of the Bank’s term finance program, which encouraged high-street banks to lend to small firms, will be probed by MPs. It was started following the Brexit vote in 2016 and continued during the COVID pandemic; however, it is no longer open to new borrowers.
The committee will also look into government support for businesses as well as credit reference companies.
The government’s potential contribution to enhancing small company credit access, the effect of COVID schemes on firms, and the value of the British Company Bank are other factors that are taken into account.
The probe is initiated when there is a political divide over receiving financial funds from businesses. While Jeremy Hunt unveiled the government’s “Edinburgh reforms” earlier this year to reduce City laws to attract more lending in the UK economy, Labour has promised to restructure financial support.
Questions are asked regarding challenges faced while accessing funds for small and medium-sized enterprises (SMEs), especially for women, people from particular social backgrounds, or ethnic minorities, and if they do face such challenges, what measures should be taken. Aside from that, they’ll check to see if financing is available to help SMEs grow beyond venture capital funding.
- Published By Team Timeswire