UK

Business Secretary Vince Cable Calls For Renewed Focus On Small Business Lending

06/02/2013 12:52 GMT | Updated 06/02/2013 12:53 GMT

Business secretary Vince Cable is once again calling for greater access to credit for small businesses following signs that the Funding for Lending Scheme (FLS) is boosting the housing market but doing little to help small and medium-sized enterprises (SMEs).

In a speech to Bloomberg on Wednesday, Cable praised the Bank of England-run FLS for succeeding in getting the banks to lend more, but the Bank's own surveys show credit conditions are only really getting better for large companies and people wanting mortgages.

"There has been a remorseless decline in lending to SMEs - by £7.8 billion over the last 18 months with no sign of a turning point," he said.

Cable said while the FLS, launched in August 2012, is "a useful scheme" it needs to offer more "targeted support specifically for SMEs".

"In the short term, I'm interested to explore whether the Bank's criteria are wide enough, and I'm asking them for their thoughts on how we ensure that FLS reaches businesses that need it most, because we must end this credit bottleneck as a matter of urgency," he said.

"The alternatives - flooding the markets with the sort of cheap funding that creates asset bubbles, or else starving SMEs altogether - are not acceptable, sustainable or viable.

"I long for the day when a small business owner doesn't cite access to finance as the biggest problem out there."

Cable added that the slow progress was "not for lack of trying, not for lack of interventions, and it's not for lack of government schemes".