Real Business - Darling to banks: "Invest in small firms"

Darling to banks: "Invest in small firms"

Chancellor Alistair Darling is encouraging UK banks to plough investment capital into small businesses, sources have told The FT newspaper.

In today’s edition of the paper, The FT reports he held meetings with top British and international finance chiefs to discuss a new lending initiative that could see hundreds of millions of pounds diverted to entrepreneurs.

Banks including Barclays, HSBC, Goldman Sachs and Deutsche Bank have been asked to contribute between £25m and £35m, according to sources close to the meetings.

Darling is likely to want to grab a quick agreement and give details of the eye-catching plan in the pre-Budget report, which he will unveil on Wednesday.

But the chancellor could meet some stiff resistance; he and Prime Minister Gordon Brown’s pledge to slap a super-tax either on ‘excessive’ bonuses or directly onto the banks themselves has led to angry reactions in the City.