Cable presses banks on business loans
Vince Cable pledged to redouble pressure on banks to lend to businesses in a drive to create a betterbalanced economy where wealth is wire duct spread around the regions.
In his first speech since joining the cabinet, the business secretary yesterday ditched a key part of the industrial activism pursued by cable trunking his predecessor, Lord Mandelson.
Mr Cable said the government would make “strategic choices” on issues such as skills training, research and support for technologies but would “rarely” make grants or loans to individual companies, as Labour had done.
He warned that the UK’s economic difficulties meant that a rebalancing of the economy, to boost manufacturing, stimulate private sector growth in wire duct the regions and lessen dependence on the City of London, could not be achieved quickly.
“We face deep-seated problems. A very fragile recovery, at home and in our continental European neighbours. A massive budget deficit. A dysfunctional banking system. An economy that is highly unbalanced both in its sectors and its regions,” he said.
Mr Cable said he now agreed that early action to tackle the budget deficit was essential and that economic growth must come from the business sector cable trunking and through trade.
He held out an olive branch to the City, saying it was “one of the UK’s most valuable clusters of specialist expertise”. But he said the Con-Lib coalition must take a “tough line with parts of the banking system, which have not served enterprise in this country as well as they could”.
Mr Cable laid out three priorities for the sector – separating retail and investment banking, resolving the question of a levy on banks to reflect the fact that cable channels the taxpayer was providing insurance, and redoubling efforts to ensure bank lending agreements were being honoured.
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