The Deputy Prime Minister has launched a new attack on banks for failing to lend to firms that are “crying out for cash”, and has called for more local banks to be set up to compete with high street giants.
In his speech at the Institute of Directors Annual Conference, Clegg urged businesses to suggest their own ideas to ministers for how to get finance more easily.
The Government has been criticised for not doing enough to force banks, including those with billions of pounds of backing from the taxpayer, to lend.
Mr Clegg has said that he will seek to increase the pressure on banks by suggesting a range of methods in which traditional businesses can “bypass” the need for traditional bank loans. Saying: “Yes, get your balance sheets in order… but don’t unnecessarily hoard capital when businesses need loans. Don’t sit on your hands while firms are crying out for cash.”
One attractive possibility will be to encourage “peer-to-peer lending” or Angel investing, with investors being introduced to firms needing cash through organisations that act like “dating agencies that match people with money to entrepreneurs”.
Mr Clegg also said that he wants to see more small, independent banks lending to local businesses to rival the well-known high street giants that are slow to provide loans.
Paul Jones
Harvard alumni and former New York Times journalist. Editor of Business Matters for over 15 years, the UKs largest business magazine. I am also head of Capital Business Media's automotive division working for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.
