Unite the Union has called for the creation of a National Investment Bank to counter dire economic conditions for British businesses.
Unite’s plea comes after last week’s announcement of extremely poor PMI results and in conjunction with news from the CBI that business optimism fell among SME firms in the second quarter of 2012.
Unite says a National Investment Bank would ‘short circuit’ the need to use existing banks that “continue to fail businesses and entrepreneurs seeking credit to underpin their development plans and employ more workers”.
Unite’s general secretary, Len McCluskey said: “The recent disastrous manufacturing figures show that a lack of demand is at the heart of the crisis facing the UK.”
Mr McCluskey envisaged a National investment Bank which would focus on small business and investment in national infrastructure projects “such as a massive house construction programme”. He also said such a bank should support a joined-up manufacturing strategy.
Mr McCluskey said that the recently announced Funding for Lending scheme was taking the wrong approach to stimulating growth. “The problem with the Funding for Lending initiative is that previous attempts to encourage banks to funnel cash to businesses have not been successful,” he observed.
“This is because the banks are keener on the health of their balance sheets and appeasing their shareholders, rather than acting in the national interest.”
McCluskey is confident that a National Investment Bank would short-circuit this “self-interest” and called for government to step away from “its grim austerity programme and pump demand into the pockets of the people”.