HC Deb 21 January 1980 vol 977 cc1-2W
Mr. Cant

asked the Secretary of State for Industry whether he will make a statement on his meeting with financial institutions regarding their role in the financing of small firms.

Mr. David Mitchell

On 14 January my right hon. Friend and I met a group of leading representatives of the financial institutions, including insurance companies, pension funds, clearing banks and merchant banks. My right hon. Friend said it was widely agreed that an "equity gap" existed for the smallest firms, in tranches from about £100,000 down to a

ANNUALISED SIX-MONTHLY RATE OF INCREASE
Output prices of products of manufacturing industry
1974 1975 1976 1977 1978 1979
January 19½ 24¾ 17 25¼
February 25½ 24¾ 16¾ 24½ 9
March 30¼ 26 16¾ 23½ 8
April 32¼ 24½ 17¾ 25¼ 11¾
May 33 27 18½ 23¼ 14
June 33 24¾ 15½ 24 9 16½
July 29½ 20 15½ 18½ 19¼
August 23½ 19½ 16¾ 16¾ 19
September 19½ 16½ 18¼ 15½ 19¼
October 18¾ 16 18½ 11¾ 18¾
November 19¼ 13 20 7 17¼*
December 20¼ 16¼ 20¼ 7 14¾*
* Provisional.

few thousand pounds. A major part in filling this gap had to be played by individual investors; but because of the extent of institutional dominance in capital markets, the institutions also had a part to play. Despite the undoubted difficulties, they and the investors they represented had a common interest in the contribution a re-invigorated small firms sector could play in the revival of the economy. The Government looked to them to increase their investment, by a variety of means, in this field. A general discussion ensued about the availability of finance for small firms and of viable projects needing finance.

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