Vince Cable plays hardball with UK banks

Vince Cable, the new business secretary, has today issued a statement suggesting that those banks in the UK who do not increase their lending will feel the wrath of the UK government's new tax regime. Despite the fact that lending in the UK to consumers and businesses is still relatively low Vince Cable does not believe there is a long-term problem. So can the UK government finally come to the aid of consumers and businesses?

It looks as though the UK government is calling upon banks in the UK to reduce bonuses and increased lending to ensure that UK businesses and consumers are able to navigate their way through the recession. However, despite the fact that the rest of the UK is struggling financially the banking sector would appear to have moved out of recession quicker than anybody else. As a consequence, we have seen some massive bonus payments over the last few weeks and indeed many believe this is the start of new boom times for the sector.

While in all honesty Vince Cable appears determined to increase the level of lending in the UK, both to consumers and businesses, talk is cheap as we have seen with the past government. The proof will be in the pudding, i.e. when we see UK lending increase, and until then many people will reserve judgement on how successful Vince Cable's new move could be.