Banking Boss Given Ministerial Post

A former banking boss has been drafted in by Business Secretary Peter Mandelson (pictured) to fill a top ministerial post, in a moved aimed at shoring-up the UK banking sector.

Mervyn Davis, lately Chair of Standard Chartered, will be granted a life peerage, which will allow him to join the government. Mr Davis will take up the Trade Promotion and Investment cabinet job, in a bid, by Lord Mandelson, to turnaround the struggling UK banking industry.

Mr Davis played a pivotal role in the multi-million pound government bail-out of British banking institutions late last year.

He will step down from his £650,000 job to concentrate on what he described as a "public service".

The appointment coincided with the unveiling of Lord Mandelson's new strategy to support small and medium sized enterprises.

Under the scheme, bank's will be offered £20bn to stimulate lending for smaller businesses.

Fifty percent of these loans will be backed by the government.

Companies with an annual turnover of up to £500m will qualify for the scheme.

"We are offering specific solutions, not a blanket subsidy," Lord Mandelson said.

A package worth more than £1bn will be put in place to support lending to firms with less than £25m annual turnover. The government will back 75% of these loans.

Over £50m will be made available to growing businesses.

A major problem for fledgling businesses and smaller companies at present is the lack of lending in the money markets.

Lord Mandelson said: "UK companies are the lifeblood of the economy and it is crucial that the Government acts now to provide real help to support them through the downturn and see them emerge stronger on the other side."

(PR/JM)