SNP calls for fair deal from Business Bank

SNP Treasury spokesperson Stewart Hosie MP said plans to set up a Government-backed business bank was a welcome but long overdue step from the UK Government, and sought reassurances that the funds would be fairly distributed to target the small businesses across Scotland that require them.

The Business bank will receive £1bn in capital from the UK Government, which will not be available directly to businesses but will be used to harness private investment to support business lending. The Scottish Government set up the Scottish Investment Bank in 2010, once again leading the way in economic recovery.

Mr Hosie said the UK Government must make sure this new scheme works effectively and provides a fair share of funding to Scotland. A previous failed scheme aimed at promoting bank lending by the UK government, Project Merlin, saw Scotland’s share of funds reach just 4.5 per cent which is barely half our population share of 8.4%.

Mr Hosie said:

“This is a welcome but long overdue first step to start tackling the serious problems small businesses face in the teeth of the UK’s economic crisis.

“The UK Government’s economic plan simply hasn’t been working, so it’s good news that they are finally accepting the need for intervention to help, not hinder, growth.

“We are already taking action in Scotland through the government backed Scottish Investment Bank which harnesses private investment in the SME funding market and the UK bank must look to work with the SIB.

“Small to medium enterprises are the lifeblood of the economy, but thousands are struggling to access the financial support that they need to survive. The UK Government failed with Project Merlin and has failed to use the banks it owns to properly support small business. It must now act quickly to get the Business Bank up and running – and make it does what it is intended to do.

“I will be seeking a commitment from the Treasury that a fair share will be distributed in Scotland.

“Independent reports show business confidence in Scotland is higher than other parts of the UK, and the Scottish Government is doing everything within its powers to strengthen the Scottish economy, to stimulate growth, support business and attract inward investment - but the inability to access funds remains one of the major issues holding back recovery.

“The UK Government must now make sure it gets the structure of this new bank right and that funds are properly channelled to ensure they reach small businesses up and down the country.”