Eighth Report - SME Finance
Select Committee
Treasury Committee
HC 27
8 May 2024
Government response
First Special Report - SME Finance: Government Response · published 12 Dec 2024
Recommendations & Conclusions
6 results
6
Conclusion
Deferred
Business Banking Resolution Service eligibility criteria and limited scope restrict effectiveness
Conclusion
The BBRS has seen a far smaller number of cases than some expected. This could be due to low demand, but is also likely to be due to the nature of the eligibility criteria attached to it, as shown by …
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Government Response Summary
The government notes the committee's conclusions and the BBRS's decision to close, stating that further decisions about the service are a matter for the independent BBRS in discussion with relevant parties.
HM Treasury
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8
Conclusion
Deferred
Para 60
Close the Business Banking Resolution Service as it is not fit for purpose
Conclusion
The BBRS is not fit for purpose in providing alternative dispute resolution to the 55,000 SMEs who fall outside of the FOS’ thresholds and this service should close as originally planned.
Government Response Summary
The government did not address the recommendation to close the BBRS, instead highlighting the role and importance of the Financial Ombudsman Service (FOS) for dispute resolution.
HM Treasury
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17
Conclusion
Deferred
Para 95
Recovery Loan Scheme successful, with welcome extension and rebranding to Growth Guarantee Scheme.
Conclusion
The Recovery Loan Scheme appears to have been successful in supporting SMEs with access to finance throughout the pandemic and beyond. We welcome HM Treasury’s decision to extend and rebrand it into a “Growth Guarantee Scheme”, which can provide support …
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Government Response Summary
The government responded with a general statement about the importance of banking services and financial inclusion, rather than directly acknowledging the Committee's welcome for the new Growth Guarantee Scheme.
HM Treasury
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20
Conclusion
Deferred
Para 111
FOS remit for business lending personal guarantees reveals an unfair, inconsistent support gap.
Conclusion
We agree with the FOS that the current approach to personal guarantees on business lending represents a gap in its remit that fails to provide the kind of support to 38 SME Finance SMEs that the service exists for. The …
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Government Response Summary
The government notes that the committee's conclusion regarding the FOS's inconsistent support for SMEs on personal guarantees is primarily for the independent Financial Conduct Authority (FCA) to consider.
HM Treasury
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21
Recommendation
Deferred
Para 112
Provide FOS with powers to address SME personal guarantees and investigate other identified remit gaps.
Recommendation
The FCA should provide the FOS with the necessary powers to address personal guarantees for SMEs, so that their service is consistent with consumers. The FCA should also investigate widening the FOS’s remit to cover the other gaps they identified …
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Government Response Summary
The government notes these recommendations for widening FOS powers regarding personal guarantees for SMEs and investigating other gaps are primarily intended for the independent Financial Conduct Authority (FCA) to consider.
HM Treasury
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22
Conclusion
Deferred
Unfair use of personal guarantees constrains growth and investment for SMEs.
Conclusion
Unfair use of personal guarantees has the potential to constrain growth and investment for SMEs, particularly the smallest businesses. We welcome HM Treasury’s review on this matter, and look forward to seeing what it will do to ease the burden …
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Government Response Summary
The government completely changed the subject, welcoming the FCA's work on bank account rejections and closures and generally discussing access to banking services, instead of addressing the recommendation about personal guarantees for SMEs.
HM Treasury
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