LONDON (Reuters) – A regional breakdown of emergency loans to small firms in Britain during the coronavirus crisis shows that Scotland and the South West of England have received a smaller share of nationwide lending than they did prior to the pandemic.
FILE PHOTO: Britain’s Chancellor of the Exchequer Rishi Sunak arrives for a cabinet meeting, the first since mid-March because of the coronavirus disease (COVID-19) pandemic, at Downing Street in London, Britain, July 21, 2020. REUTERS/Simon Dawson/File Photo
Mid-sized companies in London received bigger loans on average than anywhere else in the UK, according to the data released by the UK Treasury on Friday.
The Treasury published a regional breakdown of more than 40 billion pounds of state-backed funds provided under its ‘bounce back’ and ‘coronavirus business interruption loan scheme’ (CBILS).
The emergency lending was supporting “jobs, incomes, and businesses across every corner of the UK”, finance minister Rishi Sunak said in the Treasury’s statement.
The Treasury had previously denied a freedom of information request for the regional data by Reuters, saying protecting banks’ commercial information was in the public interest.
Businesses in Scotland were offered 6% of the total pot of bounce back loans, compared to a 9% market share of small business lending at the end of 2019 according to UK Finance data.
The South West got 8% of the emergency funding, compared to a 12% prior market share. The UK Finance data excluded Northern Ireland, unlike the Treasury data.
Companies in London were offered higher value CBILS loans on average compared to other regions, at 257,000 pounds.
The average sized loan for firms in the South West was 216,000 pounds, while the lowest was 214,000 pounds in the North East.
Some regional business leaders have complained that London gets favourable treatment, although the value of lending in the capital under the schemes was broadly in line with its 2019 market share.
The data on emergency funding did not break down the number of loan applications or rejections by region.
The Treasury said the proportion of emergency loans offered – rather than their value – compared favourably with the proportion of businesses in each region in 2019.
The ministry said the data lagged its weekly total lending figures and reflected the value of loans offered, rather than those approved.
Britain’s biggest domestic bank Lloyds (LLOY.L) said on Thursday it was working with business lobby group the Confederation of British Industry on a report into how to stimulate regional economic recovery.
Reporting by Iain Withers and Sinead Cruise; Editing by Susan Fenton