Business bank plans 'in gestation'
Plans for a Government-backed bank to increase lending to small businesses are still in their "gestation", Vince Cable has acknowledged.The Business Secretary insisted that the business bank would go ahead, but said the scale and the way it would work are still being thrashed out.
"We are looking at the potential for a government-backed institution," he said in a major speech outlining his long-term industrial strategy. "It's currently in gestation."
The new institution is intended to give growth a much-needed boost by improving the availability of finance for firms that want to expand. "We have a chronic dearth of long-term patient capital," he said.
Further details about the bank are set to be announced in Chancellor George Osborne's forthcoming Autumn Statement, but the institution is likely to work through non-bank lenders and so-called challenger banks outside of the big five high street institutions. "I am working with the Chancellor on the scale and modus vivendi of such an institution," the Business Secretary said.
Mr Cable said the Government's industrial strategy would give companies the "certainty" they need for long-term development. This will include strategies to support sectors in which Britain is felt to have a competitive advantage - aerospace, automotive and life sciences; higher and further education and professional and business services; and the information economy, construction and energy.
Speaking at the business school of Imperial College London, Mr Cable said: "Government makes decisions every day that affect the British economy, but has for too long done this in an ad hoc way. Government needs to be more like business, by making strategic plans and sticking to them.
"Our first part of that plan is lifting the barrier that poor access to finance puts on growth, by helping firms to invest capital, businesses expand, and create jobs. But I am also setting out a clear and ambitious vision, a commitment far beyond the usual political timescale that will continue to bear fruit decades later. It will give our businesses certainty, allow them to make their own plans, and know that the full weight of Government is behind them."
But shadow business secretary Chuka Umunna said: "Vince Cable has given 15 speeches on industrial strategy since coming to office, yet across different sectors the Government has been acting in a deeply un-strategic way - creating chaos and confusion in industries from defence to renewables and transport.
"Ministers need to come clean on whether they are proposing a proper British Investment Bank, which Ed Miliband has led calls for since last year, or merely a rebranding exercise of schemes which already exist and are not doing enough to help business."
Mr Cable said the Government's industrial strategy would give companies the "certainty" they need for long-term development. This will include strategies to support sectors in which Britain is felt to have a competitive advantage - aerospace, automotive and life sciences; higher and further education and professional and business services; and the information economy, construction and energy.
Speaking at the business school of Imperial College London, Mr Cable said: "Government makes decisions every day that affect the British economy, but has for too long done this in an ad hoc way. Government needs to be more like business, by making strategic plans and sticking to them.
"Our first part of that plan is lifting the barrier that poor access to finance puts on growth, by helping firms to invest capital, businesses expand, and create jobs. But I am also setting out a clear and ambitious vision, a commitment far beyond the usual political timescale that will continue to bear fruit decades later. It will give our businesses certainty, allow them to make their own plans, and know that the full weight of Government is behind them."
But shadow business secretary Chuka Umunna said: "Vince Cable has given 15 speeches on industrial strategy since coming to office, yet across different sectors the Government has been acting in a deeply un-strategic way - creating chaos and confusion in industries from defence to renewables and transport.
"Ministers need to come clean on whether they are proposing a proper British Investment Bank, which Ed Miliband has led calls for since last year, or merely a rebranding exercise of schemes which already exist and are not doing enough to help business."
© 2013 Press Association