A Midland peer has said the demise of the ‘Captain Mainwaring’ type of bank manager has been “disastrous”.
Lord Kumar Bhattacharyya, a Labour peer, told the Lords that small business was still struggling to secure finance, he warned.
The Warwick Manufacturing Group founder praised the recent Growing Your Business report by Lord Young which urged greater support for small business, with start-up loans made available to all entrepreneurs, and the Enterprise Finance Guarantee scheme extended.
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“But we need to go much further,” insisted Lord Bhattacharyya. As Lord Young said, when banks started to remove the manager from their branch network they inadvertently broke many of their links with SMEs. This has had a disastrous effect.”
Lord Bhattacharyya said he had long argued for a dedicated Business Bank with real scale, preferably with a regional or sectoral focus, so lending decisions could be made by bank managers that knew their businesses – something that Labour had embraced as part of its policy review.
And, in another boost for the SME sector, he urged reform of corporation tax in a bid to fund compulsory skills training.
Lord Bhattacharyya said: “We don’t need government to spend more, but for our businesses to invest in their people. We should create Sector Training Boards, with the power to issue training levies, as they do in construction, so that all firms have a common incentive to invest in their employees.“
Approach skills in this way, and we might be able to rid ourselves of our cumbersome skills bureaucracy.”
He went on: “I’d like to see corporation tax fall to 15 per cent, though that would be expensive. So why not reduce, even abolish, corporation tax for firms with a tax liability of less than £10,000 who are subject to Sector Skills Levies?”