Cable confirms government plans for a business bank

 
Vince Cable Vince Cable will say the government is to focus its support on key economic sectors

The government is moving ahead with plans for a government-backed "business bank" to boost lending to UK companies.

The business secretary, Vince Cable, said he hoped such a bank would "shake up the market" and help boost overall lending to firms.

Also on Tuesday, a report by MPs criticised one of the government's existing business support schemes.

The Public Accounts Committee called the Regional Growth Fund "scandalous".

The committee said the £1.4bn scheme to help boost the private sector economies of struggling English regions had so far only seen £60m of funds reach businesses.

Downing Street later defended the Regional Growth Fund, with a spokesman saying that more than half of the companies who had applied for funds were now able to access the money.

Details of what form the business bank will take have yet to be revealed. Nor have any details about what firms it will aim to lend to, or the length in years of any loan agreements.

Mr Cable suggested in his speech that the future business bank could work with commercial banks such as the UK's Co-Op, and the British operation of Swedish lender Handelsbanken.

At the same time, there has been some press speculation that the business bank may, ultimately, simply be an amalgamation of the current range of government-backed financial support schemes for companies, such as Funding for Lending, Enterprise Capital Funds and the Enterprise Finance Guarantee Scheme.

'Growth plan'

Mr Cable also used his speech to say the government is refocusing its industrial policy on supporting key sectors of the economy, such as aerospace, the car industry and science.

Shadow chancellor Ed Balls, at the TUC annual conference in Brighton, told the BBC: "The economy has been choked off through lack of demand. And there's nothing in Vince Cable's announcement that will make any difference."

Later, in a speech to delegates, Mr Balls accused the government of damaging the UK economy through its focus on deficit reduction.

He added that there needed to be a "change of course, and a plan for jobs and growth".

 

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  • rate this
    -2

    Comment number 140.

    Yet another brain dead idea from this clueless coalition, the working man needs money in his pocket not some mickey mouse bank which will not work. Can someone just answer me how much tax payers money does the Government give away to other countries every year??? there you go problem solved

  • rate this
    +53

    Comment number 54.

    So the banks were bailed out to the tune of £700 billion, then given further low interest QE money with the understanding that they must lend to small business. The banks refuse, so the government has a bright idea of setting up another bank to do what bailed out banks refuse to do.

    Absolute insanity and an absolute waste of taxpayers money. Grrrrr.

  • rate this
    +71

    Comment number 53.

    Sorry, Vince, you talk sense - but why do you keep ignoring all the QE and daily £billions of our taxes we pay to private banks we own already, but don't really?

    Banks are now the most tax-payer subsidised business in human history. They gambled our money; lost our money - and held out their hands for more of our money. Then lend our money back to us at crippling rates. Does that about cover it?

  • rate this
    +35

    Comment number 31.

    Always thought Cable was the best of a bad bunch, but this is a stupid idea from another stupid politician. We already own two banks that should be doing this already !!!!!!!!!!!!!!!!!!!!!!

  • rate this
    +56

    Comment number 28.

    Our banks have almost destroyed our economy and many peoples lives and they want to create a new one? The government forced the taxpayer to bail the lot of them out and we have 2 nationalised banks which should be used solely for the public good.

    No wonder our country is doing so badly, our politicians are hopeless.

 

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