Chancellor of the Exchequer George Osborne has revealed plans for a state supported small business bank as part of a raft of plans announced today to boost the ailing British economy.
The bank will exist to solve one of the key problems small businesses are suffering at the moment: the inability to get credit from the banks. The problem has been highlighted previously by business secretary Vince Cable and business groups. It is understood that the new bank will operate predominatly online and wouldn’t, in the first instance, have any branches.
The chairman of the Federation of Small Business (FSB) John Walker has welcomed the move saying: “With a third of businesses missing their growth opportunities as a result of not getting all the credit they need, we believe this bank will help firms grow and invest and get the recovery back on track.”
Labour have criticised the plan, citing it as further evidence that previous schemes such as Project Merlin and the coalition government’s general economic policy are not working. They also claim to have suggested such a bank more than a year ago. Shadow business secretary Chuka Umunna said: “It would seem to indicate George Osborne doesn’t have confidence that credit easing and funding for lending will solve the problem.”