Battered and bruised by the government’s sanctions on what it sees as excessive bonuses, high street banks Barclays and HSBC have proved unwilling to play ball with Alistair Darling, who wants to set up a National Investment Corporation for small firms worth £1bn.
The government has never been less popular with the banking industry and, worse still for the chancellor, some have privately accused him trying to win votes through his election-friendly plans for the banks.
Darling had been expected to announce substantial contributions to the fund in his pre-Budget report last week. But news was conspicuously absent.
Plans announced in September by Gordon Brown revealed that £200m of the total was to come from eight overseas investment banks, said to include Goldman Sachs, Citigroup and Morgan Stanley. Each was to have contributed £25m.
According to Sky, not one of the foreign banks bothered to show their faces at a meeting called by the Treasury on Thursday to discuss the proposals.
Separately, Barclays announced today a new £150m fund set up to invest in small businesses.