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Lend to small firms or face a profit tax, Cable tells banks
Posted by Dan Martin in Finances, Regulation on Mon, 26/07/2010 - 15:50
Banks which refuse to lend money to viable businesses or pay excessive staff bonuses face new taxes on their profits, the government warned today.
Business secretary Vince Cable said small companies were facing a "very serious problem" when it comes to credit and more measures may be necessary to force UK banks to lend.
Launching a new Green Paper from the Department for Business, Innovation and Skills in consultation with the Treasury, Cable claimed that £50bn of new funds for small and medium sized companies could be freed up by slashing payouts to bank staff and shareholders.
As well as considering taxing the profits of banks which fail to support businesses, ministers are also looking into regional stock exchanges, encouraging venture capitalists and business angels to invest in a wider range of businesses and the extension of the Enterprise Loan Guarantee scheme introduced by the Labour government.
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