Cable puts thumb screws on the tight-fisted banks
Vince Cable, the Business Secretary, will step up the pressure on the UK's high street bankers tomorrow morning when he confronts them at the first meeting of the Small Business Economic Forum.
Mr Cable is expected to tell bankers from the Royal Bank of Scotland, Lloyds, Barclays, Standard Chartered, Santander and HSBC that they must listen to the needs of small businesses which are still suffering from funding difficulties brought on by the crash. They will also debate the new £1.5bn Business Growth Fund, unveiled last week by the Bank Taskforce to plug the funding gap, and the Enterprise Finance Guarantee which underwrites lending.
Behind the scenes, Mr Cable is urging the bank bosses to show restraint in the upcoming bonus season, particularly at such a sensitive time when jobs and pay in the public sector are being slashed. Privately, he has warned them that if they do pay out big bonuses again, they will face new bonus or windfall taxes. Bonus payments worth more than £7bn are expected to be paid out to the UK's bankers this year.
Mr Cable is chairing the forum which is headed by Mark Prisk, the Small Business minister. Also attending will be members of the Institute of Directors, the CBI, the Federation of Small Businesses and the Bank of England.
One of the criticisms being levelled at the banks is that the fund will lend to companies with a turnover of between £10m and £100m rather than to the smallest companies, and start-ups, which find it tougher to raise funds. The taskforce has promised to improve relations with SMEs in 17 areas, ranging from access to finance and the promise that banks will be open about why they turn down loan requests.
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