Suffolk/Essex: Chambers welcome Government plan for ‘Business Bank’

CHAMBER of commerce leaders in Suffolk and Essex today welcomed plans for a Government-backed bank to increase lending to businesses.

The new institution, intended to lift the block on growth caused by the shortage of finance for firms that want to expand, was announced by Business Secretary Vince Cable alongside a series of strategies to support growth in key sectors of the economy.

Mr Cable said the aim was to give businesses the “certainty” they need for long-term development, although he conceded that the details of the business bank, including its size and how it would work, were still being thrashed out.

In a speech at Imperial College, London, Mr Cable said the business bank would tackle the gap in “long-term, patient capital for businesses”, not just by plugging it but by shaking up the market.

“The measure of the institution’s success will not be the scale of its own direct interventions, but how far it shakes up the market in business finance and helps to ease constraints for high-growth firms,” he said. The sectors earmarked for particular support – those in which Britain is felt to have a competitive advantage and are deemed vital to growth – include aerospace, automotive and life sciences, higher and further education and professional and business services, the information economy, construction and energy.

John Dugmore, chief executive of Suffolk Chamber, said: “We have repeatedly urged ministers to take the bold step to establish a British Business Bank, which could help kick-start growth and jobs in the UK for decades to come

“A business bank would be able to help prevent a repeat of the financing difficulties faced by many companies since the credit crunch. What’s more, a business bank could help many new and fast-growing companies become the UK’s future champions.”

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David Burch, director of policy at Essex Chambers of Commerce, said: “The concept of a business bank is one we very much welcome.

“The idea has been pushed by the British Chambers of Commerce, to which we are affiliated, for some time and we are pleased the Government is taking it seriously. We now wait with interest to see the details of the proposal when they emerge.”

The key sector strategies were also “a positive move”, representing recognition by the Government that it needed to do more to get the economy moving, he added.