Chuka Umunna – 2014 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Chuka Umunna on 2015-01-15.

To ask the Secretary of State for Business, Innovation and Skills, if he will carry out an investigation into allegations of misselling to businesses by lenders relating to loans made under the Enterprise Finance Guarantee Scheme.

Matthew Hancock

The Department for Business, Innovation and Skills (BIS) has been pro-active in its engagement with Enterprise Finance Guarantee (EFG) lenders, with regular audits of the use of the scheme since its launch. In February 2014 BIS wrote to all lenders participating in the EFG scheme reiterating their operational responsibilities, including the way in which it is presented to their front line staff and customers. Following evidence of concerns of lending by the Royal Bank of Scotland (RBS) in August 2014, BIS officials asked RBS to instigate an internal review into this issue.

My Rt Hon Friend the Secretary of State for Business, Innovation and Skills has met with RBS to discuss these findings, and I have asked the British Business Bank – which now administers the programme on behalf of the Department – to continue to closely monitor the action being taken by RBS to address these issues. I have been given assurance from RBS that they will put right any cases where they are at fault to ensure that no detriment is suffered by either the borrower or the taxpayer.

The Enterprise Finance Guarantee remains a valuable programme which helps viable businesses gain access to finance where they have insufficient security or an inadequate track record to access finance.