Banks' proposal for £500m small firm fund slammed as a 'drop in the ocean'

Big six bosses to meet George Osborne and business secretary Vince Cable to discuss £500m financing plan

 

Chancellor George Osborne and business secretary Vince Cable are to meet bosses from the big six banks, including the bailed out royal Bank of Scotland and Lloyds Banking Group, to discuss a plan to set up a £500m fund to finance small business. Photograph: Lewis Whyld/PA

A proposal by the big banks to set up a £500m fund to finance small business has come under fire as an inadequate response. The bosses of the big six banks are to meet business secretary Vince Cable and chancellor George Osborne on Wednesday to present their idea.

The six banks – bailed-out Royal Bank of Scotland and Lloyds Banking Group along with Spanish-owned Santander, Barclays, HSBC and Standard Chartered – will each pledge to contribute £50m-£100m but will ask the government to match their contributions with taxpayers' cash.

The bankers are aware that their proposals for fresh government funds could be rejected given the pressure ministers are under from the comprehensive spending review, which is expected to slash at least 25% of most departmental budgets.