The British Business Bank: Ten Questions
Today Vince Cable is apparently going to announce the creation of a ‘British Business Bank’. This follows similar recent comments from George Osborne.
So – is the government actually planning some sort of KfW style state investment bank? Probably not. As Tony Dolphin argued following the Chancellor’s comments, what the UK needs is a ‘proper’ government-backed lender whilst what is being proposed sounds more like a website drawing together existing programmes and branded a ‘bank’.
To judge how significant today’s announcement actually is, here are 10 questions I’ll be looking for an answer to:
- Will the new bank be able to borrow (unlike the Green Investment Bank)? I.e. will it be able to function like an actual ‘bank’ by borrowing itself and passing on that funding?
- How much new money will be committed to the new ‘bank’?
- Will it lend itself or will it lend through existing banks?
- How does this fit with the funding-for-lending scheme?
- What is the timeframe for getting this up and running?
- What will be its remit? SMEs or infrastructure? Both? Something else?
- Will it have an FSA banking license?
- How many staff will it have?
- Will we see legislation on this, or is just a rearrangement of some existing programmes?
- What will be the governance procedures?
Without answers to these questions it hard to see this as a real step forward.