New bank could help businesses get finance
A BRANCH of a government-backed bank which aims to increase lending to businesses could start operations in Plymouth.
The move, unveiled as part of wider plans to support UK industry, aims to tackle the shortage of finance for firms and stimulate economic growth.
Business Secretary Vince cable said details of the institution's size and how it will work were still being hammered out, but he has raised the prospect of it operating through so-called challenger banks like Handelsbanken, The Co-Op and Aldermore.
The Swedish lender Handelsbanken has a branch in Plymouth.
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The news came as the Secretary of State outlined the Government's vision for industry to give businesses the 'certainty' they need for long-term development and investment.
In a speech in London, Mr Cable announced the launch of the business bank to tackle the gap in "long-term, patient capital for businesses", not just by plugging it but by shaking up the market.
He said: "The measure of the institution's success will not be the scale of its direct interventions, but how far it shakes up the market in business finance and helps to ease constraints for high-growth firms."
Mr Cable also announced that £67 million of funding had been secured by 34 successful bids under the Employee Ownership scheme which enables firms to provide training for staff.
Mr Cable said: "Government makes decisions every day that affect the British economy, but has for too long done this in an ad hoc way.
"Government needs to be more like business, by making strategic plans and sticking to them.
"Our first part of that plan is lifting the barrier that poor access to finance puts on growth, by helping firms to invest capital, businesses expand, and create jobs."
He said there was a role for an institution that could promote lending to companies that struggled to get long-term loan capital.
But Mr Cable's announcements coincided with the publication of a damning report by the Public Accounts Select Committee into the Government's flagship Regional Growth Fund.
MPs found just £60 million out of a total £1.4 billion had actually reached frontline projects.
Labour accused the government of creating chaos and confusion in industries from defence to renewables and transport.