George Osborne has revealed plans to launch a small business bank that will help fund small businesses to meet requirements for growth strategy, as a part of a series of measures that would help revive the ailing British economy.
The UK manufacturing body, EEF, has published a report which shows manufacturers going through toughest trading conditions for three years with output, orders, confidence and profits all plummeting. Hence, the government has come up with the plan.
The government-backed small bank will not be in line with the high-street banks nor take deposits, concentrating solely on private sector. The small bank will be responsible for carrying out many schemes belonging to the Business Department, such as the Business Finance Partnership and Enterprise Capital funds.
“The bank would bring together all the alphabet soup of existing schemes” available to small businesses”, The Chancellor was quoted as saying to The BBC, adding, “The creation of a business bank won’t have an instant impact but it will underpin future jobs, investment and confidence and create a decisive legacy for this Government.”
The Treasury is modeling its banking design based on US, Germany and Ireland which follow similar versions. Going ahead, the Treasury believes that the small bank could form the centre for small networks that would eventually join private sector and operate joint projects.
Although the move has been hailed by one and all, John Longworth, director general of the British Chambers of Commerce, has urged the Prime Minister to take immediate steps to appoint a minister for a speedy creation of the bank under the planned cabinet reshuffle.
“The creation of a business bank won’t have an instant impact but it will underpin future jobs, investment and confidence and create a decisive legacy for this Government”, he said.