Business secretary Vince Cable has described the City’s financial services sector as “Champions League” but called for a better relationship between it and the “real economy” of the UK.
In his speech at the Mansion House, Cable says the UK has “a financial services industry in London that plays in the Champions League with overseas owners to match, and a British business finance system which struggles in the second division”.
He adds: “We have some of the world’s smartest, most creative financiers, doing brilliantly in the City or Canary Wharf while there are also smart creative British entrepreneurs – or even run-of-the-mill smaller businesses – still struggling to raise finance to operate and expand.
“They depend, as one put it to me the other day, on the three ‘Fs’: friends, family and fools – shunned by banks, unable to access equity markets.” (article continues below)
Cable says the gap between small enterprises, dependent on owners’ equity and credit, and larger quoted companies was a longer-term problem.
“Wherever I meet groups of business people around the country I am given fresh anecdotes about how hard it is to deal with the banks, how few choices there are, how swift and arbitrary the treatment can seem. I hear this weekly in my constituency surgery. I hear it from academics, business titans and even the right wing tabloid press, usually the first to scold politicians like me for interfering in business,” he says.