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
    +3

    Comment number 40.

    Would love to actually hear what Ed Balls' plan would be. Borrow more and more and more? The man has no credibility after presiding over the deregulation of the UK banking sector which was led by Gordon Brown. That was one of the primary causes of this almighty cock-up and he's offered nothing to suggest he has learnt anything since.

  • rate this
    -3

    Comment number 39.

    Never a week goes by without the Labour chaired Public Accounts Committee criticising the Government.

    Odd that.

  • rate this
    +6

    Comment number 38.

    Hmm so the general idea is to lend taxpayer's money to private businesses that are unable to convince banks that their business is worthy enough to lend money to?

    Sounds like another recipe for disaster at the taxpayers expense to me.

    Why not just stop meddling and spend the time and money on scrapping regulations and getting out of the way?

  • Comment number 37.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 36.

    Hasn't anyone pointed out we don't want more banks, we want less taxation and less interference?

  • rate this
    +2

    Comment number 35.

    Can someone please explain to me exactly what experience any of these guys have got that qualifies them to be left in charge of running the British economy?

  • rate this
    +1

    Comment number 34.

    Nothing this government does, helps anyone but there own greedy filthy rich buddies.

  • rate this
    +5

    Comment number 33.

    This Goverment,are doing more rhetorical "Shaking up",than Jerry Lee Lewis,with St Vitus dance.What's to show for it ?

  • rate this
    +2

    Comment number 32.

    When commercial banks don't lend to companies it is because they judge the risk of the loan not being repaid is too great with consequent loss to the bank's shareholders. So will this govt bank have superior risk assessment to commercial banks? Or is it simply that commercial banks exercise more care with their shareholders’ money than Vince does with taxpayers’ money?

  • 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
    +2

    Comment number 30.

    22.Justin150 - "......Which of these contradictory instructions are the banks supposed to obey?"


    Exactly, it just goes to show how the Coalition are as bad as any previous Govt. (New Lab inc) for spinning the truth - Slasher Cameron promised us a "new politics" yet all we get is yet more spin......still, his only job in the real world as a PR man so I suppose we should have expected it......

  • rate this
    +3

    Comment number 29.

    Another scheme another waste of time. Confidence was wiped out when the govt sacked a million workers and told us all we were staring down the barrel of a gun and that was their words. Add to that the countless banking scandals, back handers and endless hyping of the euro crisis and what you have is a big black hole where once people had confidence in their futures.

  • 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.

  • rate this
    +6

    Comment number 27.

    "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"

    What about those areas that do not have any of these industries to support such as some of very poor former mining areas of the South Wales Valleys.

    Another useless initiative from a useless Government.

  • rate this
    0

    Comment number 26.

    A lending stimulus...

    It has been well said, perhaps in more words by Mr Cable himself, that "Resistance to Demand-Need is Useless"

    "Industry is not responding" to rumours of classic helicopter-drops over either Hampstead Heath or Clapham Common

    What more secure Demand than that from equal citizens, all united in work to make equal incomes 'worth more'

    Is there anybody who "Doesn't' Get It"?

  • rate this
    +1

    Comment number 25.

    Isn't this just another form of state intervention in the economy? Wouldn't it be better to restore some confidence to the economy so that more capital can reach small businesses through more traditional methods involving commercial banks.

  • rate this
    +5

    Comment number 24.

    Time the greedy bankers paid for the mess they put our country in. We bailed them, we dont get it back, but theses crooked bankers get bonuses, if I mess up i get the sack with a months pay, if they mess up they get bonuses. Some people say if bankers are not paid obscene amounts of money, they will leave the country, good, go, i will carry your bags.

  • rate this
    +3

    Comment number 23.

    For goodness sake Vince can you please hurry up - we don't have all decade to get the economy moving.

  • rate this
    +3

    Comment number 22.

    #14 politicians are schizophrenic. Under project Merlin they wanted a commitment to increase lending to SMEs yet at the same time they wanted banks to manage risk correctly and therefore not lend to risk propositions. On average SMEs in UK are historically a risky proposition.

    Which of these contradictory instructions are the banks supposed to obey?

    Cable's bank will be a disaster

  • rate this
    +1

    Comment number 21.

    Where does this money really go????

    Consultants and adminstration! that's where. What a waste of time and, more importantly, money!

    Knock the £1.8b off the tax bill!

 

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