Business bank not simply a re-branding exercise – Cable

BUSINESS Secretary Vince Cable has promised a state-backed ‘business bank’ will involve more than a rebranding of current Government support schemes.

Final details for the bank, which would look to improve the flow of finance to small businesses, have yet to be announced amid suggestions the Treasury sees the idea merely as a way of making existing initiatives more accessible.

Speaking at the MADE Festival in Sheffield, he said: “There’s no question of the Government being directly involved in face to face lending.

“A lot of analysts have suggested there is a massive funding gap between what business will need in the recovery and the supply of finance that’s likely to be available from the banking system given the problems they have had with the crisis.

“The question is where that money comes from. The problem is mainly in the wholesale market. The Government can help with that, we are discussing what precise form of intervention we can make – Government money guarantees, the scale and scope of that we are trying to plot out at the moment but there is clearly a need and Government has a role.

“It’s about interventions that will support the wholesale market and enable more funds to flow to business. They may be bank-funded, they may be non-bank funded.”

Cable used a speech at the festival to highlight the first wave of money going to businesses from the Government’s £82.5m Start-Up loans scheme launched earlier in the year.

New business minister Michael Fallon also used the event to launch a new initiative on reducing red tape facing new businesses.