No more Mr Nice Guy
IT WAS a gambit of the previous Chancel- lor, whose name for the moment escapes me, to call in the High Street bankers and tell them to be nicer to their customers. This diverted blame away from his policies. Now the Governor of the Bank of England has called them in again and told them to be nice to small businesses. They have, of course, tried that. It cost them a fortune (partly due to those policies) and some of them are not sure that they want another try. If so, it will have to be on different lines. No more lending money to compa- nies with none of their own. No more run- ning all the risks of investment without standing to gain its rewards. They will look for businesses with backers who can put in money and, better still, experience and judgment and time. The backers are there, so the bankers believe — it will be harder to find enough good propositions and hard- er still to bring the two together. The Busi- ness Expansion Scheme, which was meant to do this, will expire with the year. It had become a wangle, enabling Oxford colleges to pop their buildings, pass Go and collect from the Exchequer. I expect a successor in the Budget, and it will need one crucial change. The BES forbade the backers to go anywhere near their businesses. A new scheme should compel them.
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