Cable warns banks must lend or face tax

Vince Cable has warned the banking sector it faces the prospect of another tax on profits or existing widening loans if vital lending to UK businesses fails to pick up.

In the 'Financing a Private Sector Recovery', green paper, Mr Cable set out a range of finance options for different sized businesses, but the business secretary has also warned the banking industry would need to do its part after the help it had received from the government.

Representatives of the insolvency profession are broadly in support of the plan if viable businesses gain access to much-needed funds.

R3’s vice-president Frances Coulson said: "Our feeling on the ground backs this up, with 70% of the UK’s insolvency practitioners surveyed saying they had come across a business they believed to have a viable future unable to obtain finance from a bank or other lender.

"We would support measures to ease lending to any business with a viable future, which of course is the key eligibility criteria in itself - the balance with responsible lending cannot be overridden."

Further reading:

Read the business department report here: