BusinessCompany NewsCable warns banks must lend or face tax

Cable warns banks must lend or face tax

Business secretary Vince Cable says banks will be hit with another tax if they pay staff but hold back on lending to companies

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:

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