Secretary of State for Business, Innovation and Skills, Vince Cable, has revealed details of a new government-backed bank which plans to boost lending to small and medium sized business (SMBs) that operate in high-growth industries.
Speaking at the Liberal Democrat’s autumn conference, Cable also reiterated the coalition government’s commitment to new technologies.
Working with Chancellor of the Exchequer, George Osborne, Cable plans to launch a British ‘business bank’ that will combine a billion pounds worth of new government capital with a ‘larger private sector contribution’.
He said: “This will apply leverage through guarantees to support up to ten billion pounds of finance to small and mid-sized business – a significant portion of all the lending currently available.”
This is the latest in a string of government announcements that are aimed at achieving long-term economic growth through the support of industries that foster innovation, entrepreneurs and start-ups.
The most successful of these being the government’s ambition to create a technology hub in the UK, dubbed Tech City, which is based in the Shoreditch area of London. This has led to a number of internet companies investing in the area, including Google.
Cable said: “We are so good at so many things in this country – but for too long the mirage of growth based on property speculation and financial gambling has hidden the harder virtues of making things productively. We must get behind successful British-based firms in vehicles, aerospace, life sciences and creative industries and our world-class scientists and universities.”
“I have been working at the heart of Government to make this happen. Despite spending cuts, we have increased apprenticeships by over 60%. We launched German-style innovation centres so that British industry can access the newest technologies in advanced manufacturing, bioscience, sustainable energy, and digital.”
Cable went on to say that many of the UK’s leading banks are not only anti-business, but anti-small business. He said: “They threw traditional relationship banking over the side and sold useless insurance and dodgy derivatives instead.”
“This is no time for the state to be stepping back. We need a new British business bank with a clean balance sheet and an ability to expand lending rapidly to the manufacturers, exporters and high growth companies that power our economy.”
Cable recently also spoke out in favour of opening up borders for scientists and technologists in the ongoing debate over the offshoring of IT skills. He said in July that the UK should actively be encouraging ‘brain circulation’.