TaxCorporate TaxCable to banks: Lend or face higher taxes

Cable to banks: Lend or face higher taxes

Banks that do not lend to small and medium enterprises will face higher taxation

BANKS WILL face higher taxes if they fail to lend to small businesses, the business secretary has announced.

Vince Cable said that recent bank lending trends to small and medium enterprises “were not encouraging”, the Evening Standard reported.

“It’s a deal with the banks. If the banks don’t deliver, there are options open to the Government, including taxation,” Cable said.

A report is to be published on Monday detailing how much banks are a total lending target of £190bn for 2011, including £76bn to SMEs.

The Evening Standard quoted a Treasury source who said that banks are “broadly on track” to meet the £190bn target.

However, he added: “It will be disappointing if, within the overall total, lending to SMEs is behind schedule. But it is still early days.”

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