Ministers are to establish a new business finance council to support small and medium-sized businesses (SMEs) in the wake of complaints that the government has done too little to help them prepare for Brexit.
Sky News has learnt that the Treasury and the Department for Business, Energy and Industrial Strategy will announce following a meeting with commercial lenders on Thursday that they are setting up the new group.
The council will be chaired by Andrea Leadsom, the business secretary, and John Glen, economic secretary to the Treasury.
It will also include executives from a number of major lenders.
Thursday’s meeting will come just days after the chancellor, Sajid Javid, was told by leading City financiers that SMEs are not adequately prepared for the impact of a no-deal Brexit.
One insider said it was unclear what the remit of the new council would be or how frequently it would meet.
Among those attending the latest talks will be representatives from Barclays, the British Business Bank, Lloyds Banking Group, Funding Circle and UK Finance, according to a Whitehall source briefed on the meeting.
Michael Gove, the chancellor of the Duchy of Lancaster, who is leading the government’s no-deal preparations, is also expected to be there.
While there is little evidence to suggest that SMEs are finding it harder to access credit from major banks amid the UK’s ongoing political crisis, there are concerns that SMEs could find working capital facilities curtailed in extreme circumstances.
Ministers are not expected to seek a formal guarantee from banks that they will lend specific sums after a no-deal Brexit.
Such a move would have evoked echoes of Project Merlin, the industry-wide series of pledges introduced in 2011 as bankers sought to rebuild their reputation in the aftermath of the financial crisis.
One of the institutions created during the last decade, the BBB, has a guarantee scheme called Enable which has capacity for SME lending of roughly £1bn.
The BBB’s Enterprise Finance Guarantee, which supports SME lending, also has £300m in headroom.
The Treasury is also working on a separate programme, Project Yellowhammer, to provide emergency funding to companies that find their existence threatened because of difficulties arising from a no-deal departure from the EU.
The Treasury and BEIS declined to comment ahead of Thursday’s meeting.
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