Partner Article

Cable sets out timetable for business bank

Vince Cable is set to outline a timetable for a state-backed business bank, with initial investments commencing in the autumn.

The Bank will receive £2.9bn of commitments through existing government schemes, as well as £1bn of starting capital.

An advisory group for the Bank will be chaired by Scottish banker Sir Peter Burt, and will advise on how the capital should be used.

By 2013, the Government hopes to have rolled out an extended Loan Guarantee Programme, and by next year the Bank will be fully operational.

Katja Hall, CBI Chief Policy Director, said: “This should give confidence to businesses that there is now a long-term solution to plug the finance gap for patient capital in the UK.

“Businesses didn’t want a host of new finance initiatives introduced as part of the Business Bank but simplification of existing support. Bringing all government financial support and advice initiatives under one roof will improve access for smaller firms, helping them fulfil their growth potential.

“Boosting the diversity of finance available to businesses is important, so it’s good that the Bank’s first focus will be on investment in alternative finance and existing equity schemes.

“The Government now needs to maintain the momentum and develop a dynamic and nimble body which works alongside the private finance market.”

TUC general secretary, Frances O’Grady, suggested the Bank should also be allowed to raise funds on the capital markets like other investment banks, and its remit should include support for infrastructure projects too.

This was posted in Bdaily's Members' News section by Tom Keighley .