The business secretary Vince Cable has outlined his controversial new vision for the future of British industry – including the introduction of a government-led ‘business bank’.
The proposals are still under discussion, but include a new institution to encourage businesses to invest in capital and drive expansion – which potentially may operate through alternative finance providers.
Cable said he planned to “lift the barrier that poor access to finance puts on growth.” Adding: “By helping firms to invest in capital, businesses expand and create jobs.”
The idea was welcomed by Anil Stocker
, head of policy for the Next Generation Finance Consortium
. He said:
“The role of the ‘business bank’ should be to provide support to both banks and alternative finance institutions – and also to educate business owners about the financial options they have.
“A number of innovative new alternative finance institutions have sprung up in the wake of the banking collapse… A truly diverse lending landscape is within sight, and public sector initiatives must ensure that they embrace it as a goal.”
However, not everyone was so convinced, with Rob Donaldson, head of mergers, acquisitions and private equity at Baker Tilly, slamming Cable’s strategy as “a cause for concern” and “(lacking) detail.” He said:
“Government would be better focusing its efforts on helping businesses by keeping taxes low and limiting regulation to sensible levels.
“This would, in my view, be a quicker and more effective way to make a real difference to the business community and help boost growth in the UK.”