Budget: Regional Banks 'Would Boost Firms'
Ed Miliband has called for economic recovery to be aided by a network of regional banks to boost business lending.
The Labour leader told the British Chambers of Commerce (BCC) annual conference that a Labour Government would act to ensure that such lenders had a "civic duty" to promote growth to counter a "banks that like to say no" culture stifling vital investment.
The conference is set to become a hub for demands ahead of next week's Budget statement by George Osborne.
The Chancellor is under pressure to boost growth in a flat-lining economy as fears persist that the UK is heading for confirmation of a triple-dip recession.
Mr Miliband, who has faced calls to outline Labour plans for tackling the economy, claimed that a £4.5bn slump in investment in the final quarter of 2012 was proof government initiatives were failing while big banks carried on with a 'bonus as usual' approach.
A report for Labour's Small Business Taskforce identified poor access to finance as a key barrier to growth - with many firms forced to use credit cards and overdrafts to fund expansion.
Banks have argued that there is little demand for cash because companies are worried about a lack of economic demand.
But Mr Miliband said he had heard from countless businesses refused legitimate finance by "banks that don't know your businesses or who don't seem to care."
Addressing next week's Budget, he called for infrastructure investment, a temporary cut in VAT and for the re-introduction of the 10p tax rate.
The Prime Minister has already signalled there will be no deviation from 'Plan A' as far as tackling the deficit is concerned.
In a video message to the conference he said: "We are sticking to the course."
But it is reported that the Government is looking to boost private investment. According to the Financial Times, Qatar has begun talks to invest up to £10bn from the state into infrastructure projects in Britain.
The BCC released its own economic forecast to mark its conference, predicting a fall in its initial GDP growth estimates to just 0.6% for 2012.
It has called on the Treasury to support its plans for a £9bn private investment in infrastructure spending including projects such as house construction and road repairs.