The Treasury select committee has hit out at the funding for lending scheme for a “bias” towards mortgages rather than business lending.
In its report into the autumn statement published today, MPs say they are concerned about reports that businesses are not benefiting.
On the back of the scheme the Council of Mortgage Lenders is predicting gross lending of £156bn this year, up from £143bn in 2012.
The TSC report says it is “too soon” to judge the scheme but calls on the Treasury to review its impact and report back to the committee.
It states: “We are concerned, however, by reports that there may be a bias in the effect of the scheme that favours lending for mortgages rather than lending to SMEs.
“The Bank of England and the Treasury should assess whether this is the case and report their findings and any proposed action to the Treasury committee.”
The report also hit out at the autumn statement for acting as a “second Budget” and called for the primacy of the Budget to be restored.
TSC chair Andrew Tyrie says: “The case for two Budgets is weak. An additional one can create uncertainty and carries an economic cost. Only in an emergency would it be likely to carry long-term benefit.
“The primacy of the Budget as the main focus of fiscal and economic policy making should be re-established.”
Tyrie also criticised the “poorly co-ordinated” announcement of the £35bn transfer of interest payments from quantitative easing from the Bank of England to Treasury. Tyrie says the Treasury threatened the independence of the Bank of England by announcing the move.
The report also revealed that incoming Bank of England governor Mark Carney will face the TSC on 7 February about whether monetary policy should target growth rather than inflation. Carney is set to succeed Sir Mervyn King in July.