Cable unveils vague plans for new bank

The Business Secretary said the bank will be set up using £1 billion of public money with "a larger private-sector contribution" that will support up to £10bn of loans to small and medium-sized companies.

But exact details about where the money will come from to fund the bank will not be announced until December 5 when the party makes its autumn statement.

But Unite, the TUC and Prospect indicated that the funding was not enough and Mark Littlewood of the Institute of Economic Affairs argued the bank will not be open in time to address the short-term problems businesses face.

Unite assistant general secretary Tony Burke said: "What we had today was more warm words about a national investment bank, but little detail.

"British business and the British economy is crying out for more ambition and urgent action from the government. The £1bn announced today is a drop in the ocean and will not go nearly far enough to generate the jobs and growth the country is crying out for.

He noted that Germany's state investment bank has serious government backing to the tune of £40bn.

A TUC-funded report by the Institute for Public Policy Research last week also called for an ambitious state investment bank with £40bn of investment over four years.

Outgoing TUC general secretary Brendan Barber said: "It's a shame that so many businesses have gone to the wall in the two years it's taken the government to agree to the scheme.

He also criticised the government's investment of £1bn.

"If this bank is as good as ministers claim it will be, they should give it the backing it deserves and vastly increase its funds.

"Multiplying the government's stake tenfold could support £100 billion of additional lending. This is the level of support businesses really need," he added.