MP Dominic Grieve: Regulation of banks to be scrutinised carefully

Jul 18 2012 Buckinghamshire Advertiser

A MEETING with the local Federation of Small Businesses in Beaconsfield, for members from across South Buckinghamshire, was the opportunity to exchange views with business people from this crucial sector.

We met the day after the House of Commons voted for a parliamentary committee to examine the concerns about the mechanism of setting the inter-bank lending rates. This issue may have implications for those who have gone to the banks for finance.

There is to be a Banking Bill during this session of parliament so matters like the regulation of banks will be scrutinised carefully. The question of how to separate the ‘high street’ operations of the banks from the riskier elements of investment banking will doubtless be examined in detail. It was already on the agenda prior to the recent headlines.

Of course there has been an ongoing concern about provisions for the banks to lend to small and medium sized enterprises so they can expand or develop their operations.

The definition of a small or medium sized enterprise (SME), given in a recent Department of Business, Innovation and Skills report, now includes micro enterprises. A micro firm employs under 10 people. A small firm employs between 11 and 50. A medium firm employs 51 to 250 people.

Yet these SMEs can punch above their weight. They actually account for 99.9 per cent of firms – and of course, as well as working within the local economy and employing people locally, they could grow into the large firms of the future. Nor is there any reason why they cannot export goods and services to boost the national economy.

As well as trading on the internet, SMEs are using the social networks and new technology as a marketplace for customers. Thus we need good communications links like carbon fibre high speed broadband.