By Emb. Hashmi
Vince Cables Business Bank lacks Action Plan
The government-backed “business bank” planned by Business Secretary Vince Cable will need an estimated £40bn to successfully boost lending to UK firms, says the think tank IPPR.
It says the bank must also be able to tap bond markets for up to £100bn.
The IPPR also recommends the government allow the bank to invest in infrastructure projects such as road building to help regenerate the economy.
Mr Cable announced plans for the business bank the week beginning 10th September 2012.
Mr Cable hopes such a bank will “shake up the market” and help increase and improve overall lending to firms.
However there are major questions in the city on how the new ‘business bank’ will be structured and funded, the government seems to still be working this crucial factor out.
The Federation of Small Businesses has said;
“Mr Cable, a Liberal Democrat member of the coalition government, has said the details are still in ‘gestation’ but may involve some state lending, although the Treasury, with Conservative Chancellor George Osborne in charge, is understood to be against this”.
The IPPR’s chief economist, Tony Dolphin, said: “Because the chancellor will not spend more government money boosting aggregate demand in the economy, he has been reduced to indirect schemes like funding for lending to support growth.
“What we need in the UK is a fully-fledged British investment bank designed to suit the particular circumstances of our economy.”
