Vince Cable urged more help for small businesses to access a major credit scheme yesterday – sparking Labour claims he had admitted the Government was failing to help struggling firms.
Amid signs that the Funding for Lending Scheme (FLS) is boosting the housing market but making little difference to small and medium-sized enterprises (SMEs), the Business Secretary insisted tackling the bottleneck is “a matter of urgency”.
The FLS, launched in August and giving financial institutions access to cheap money, is “a useful scheme – but we need targeted support specifically for SMEs”, he said. The Bank of England-run FLS is succeeding in getting the banks to lend more but the Bank’s own surveys show credit conditions are better for large companies and people wanting mortgages than for SMEs.
“I’m interested to explore whether the Bank’s criteria are wide enough, and I’m asking 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,” Mr Cable said.