Cable to confirm plans for new business bank

BUSINESS Secretary Vince Cable will today confirm the creation of a new business bank backed with £1bn of Government funding.

Mr Cable will set out plans which he hopes, with private sector support, will see the bank eventually supply an extra £10bn of lending to business.

He said: “For decades British industry has lacked the sort of diverse, long-term finance that is quite normal elsewhere. We need a British business bank with a clean balance sheet and a mandate to expand lending rapidly and we are now going to get it.   

“Alongside the private sector, the bank will get the market lending to manufacturers, exporters and growth companies that so desperately need support.  It will be a lasting monument to our determination to reshape finance so it can finally serve industry the way it should. Its success will not be the scale of its own direct interventions but how far it shakes up the market in business finance and helps to ease constraints for high-growth firms.

“Having a functioning, diverse supply of finance is an integral part of the Government’s industrial strategy. It is all about making the right decisions now to secure our long-term industrial success.”  

The business bank will be run at arms length from the Government. It will not conduct face to face lending but will look to increase the supply of funding to businesses through existing banks and other financial institutions.