Business Secretary Vince Cable today announced plans for a state-backed ‘business bank’ and long-term partnership with industry as part of the coalition’s industrial strategy.
Setting out his vision for the future of British industry, Cable said the government would produce a number of ‘sector strategies’ aimed at boosting areas such as advanced manufacturing.A business bank was needed ‘to help companies invest in capital and drive their expansion’, he added.
The government was still discussing the scale and operation of the institution, but it could operate through what he called ‘challenger banks’, such as the Co-operative. These are the companies that are taking on the ‘Big Four’ established banks – HSBC, Royal Bank of Scotland, Lloyds Banking Group and Barclays.
Any business bank would not only boost lending capacity, but could also use existing support schemes, such as government guarantees, to support business expansion.
Speaking to business leaders at Imperial College, London, Cable also announced that £67m of public funding would be provided to help 34 firms design new vocational training programmes under the Employer Ownership Pilot.
This is expected to create 11,000 apprenticeships and up to 27,000 full time equivalent non-apprenticeship vocational training opportunities. The companies will also contribute a total of £98m to the scheme.
Cable also said that the government would further reform its own procurement to recognise its ‘role as a customer and develop a more intelligent partnership with its own supply chain’.
He said that ‘government makes decisions every day that affect the British economy, but has for too long done this in an ad hoc way’. Instead, Whitehall ‘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. ‘But I am also setting out a clear and ambitious vision, a commitment far beyond the usual political timescale that will continue to bear fruit decades later.
‘It will give our businesses certainty, allow them to make their own plans, and know that the full weight of government is behind them. We will work in a strategic partnership with industry, focusing our support on specific sectors. This is our commitment to growth in action.’
CBI director general John Cridland said Cable’s commitment was ‘a valuable first step on this critical path to future success’ for the economy.
He added: ‘British business has been challenging the government to put in place firm foundations on which our companies can build their long-term futures and rebalance our economy.
‘The UK is a world leader in many sectors and if we are to secure significant growth in the decades to come, the government must enable them to capitalise on their competitive advantages and stay ahead of international rivals.'
