Labour would set up a British Investment Bank to widen the availability of credit to small firms, shadow Business Secretary Chuka Umunna pledged today as he met businesses in Bristol.
He said the bank – likely to be an extension of the recently-launched Green Investment Bank – would fill the gap left by the main UK banks which he accused of failing to lend to businesses. It could even have local branches where managers would be in tune with the needs of local businesses.
He also vowed an incoming Labour government would keep the private sector-led Local Enterprise Partnerships (LEPs) set up by the Coalition after it scrapped the Regional Development Agencies and would seek to re-introduced an easily-accessible Business Link-style network of local business advisors.
Visiting Bristol to back Marvin Rees, Labour’s candidate in the city’s mayoral election, Mr Umunna met a group of business leaders at law firm DAC Beachcroft’s office in the city before heading to Cater Business Park in Hartcliffe. He also visit law firm Osborne Clarke.
In a short speech followed by a wide-ranging question-and-answer session over lunch at DAC Beachcroft, the shadow business secretary tackled issues spanning student visas and higher education, house-building and the economic outlook.
He admitted that Labour had made mistakes during its period in office but heaped praise on the party’s last business secretary Lord Mandelson, who he said had taken the right approach to partnering with industry to boost the economy, particularly the automotive sector which he said was now reaping the rewards of that policy.
“An active government must work in partnership with business to grow the economy,” he said. “It’s not a 1970s concept of picking winners. It’s about understanding what business needs.”
He accused Chancellor George Osborne of being opposed to such an industrial policy “for ideological reasons” and said Business Secretary Vince Cable was now in favour but “doesn’t have the clout across Whitehall to introduce it”.
Speaking about the short-term economic outlook, he said: “Clearly the economic climate is very difficult. Yesterday the bank of England revised down its growth forecast to 0% and the latest trade figures today show the worst trade deficit since records began in 1997. The economy is in a precarious situation. Only Italy out of the G8 countries is in a double-dip recession.”
He said when Labour left office in 2010 the economy was not in recession and unemployment was falling. A future Labour government would deal with the deficit, he said, but would encourage growth. Doing nothing, as he accused the present government of, was storing up problems for the future, such as inter-generational unemployment.
The economy also faced challenges from constant technological change and from fast-growing economies, not just Brazil, Russia, India and China but the ‘next 11’ which includes a number of African countries.
But he said many MPs on the Conservative benches thought government business policy should simply be to “cut taxes, liberalise labour laws and leave you alone”.
“But we should be working with you to set out a proper policy,” he said.
The DAC Beachcroft lunch was co-hosted by Bristol executive recruitment consultants Moon.
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Right: Chuka Umunna meets Bristol business leaders (Photo courtesy of Moon Consulting)
