§ Mr. Spencerasked the Secretary of State for Trade and Industry what steps are taken to ensure that a director of an applicant company under the loan guarantee scheme has not previously been a director of a company that has received a loan under the scheme but since become insolvent; and if he will make a statement.
§ Mr. FletcherUnder the loan guarantee scheme the banks are responsible for carrying out the commercial appraisal of all applications. As part of their assessment the banks will clearly need to take full account of the previous business experience of those who will be running the business. Leaflets on the scheme, and instructions to the banks, make it clear that applications will not be considered from businesses where the ownership or effective control rests with any person or any group of people who have been involved in the running or ownership of a business that resulted in a previous claim under the scheme's guarantee arrangements. With nearly 14,000 guarantees issued to date it would not be possible to ensure that all shareholders and directors of all these businesses are recorded and cross-checked without considerably increasing the cost and bureaucracy of operating the scheme. However, plans to computerise the scheme's operation will enable the Department to identify such cases rather more easily.