Small enterprises may be heartened to learn of the government’s plan to introduce a state-backed bank dedicated to business, but just how excited should businesses be in the wake of a multitude of business policy failings?

Chancellor George Osborne and business secretary Vince Cable have announced their ‘consideration’ of the creation of a new bank to improve the flow of credit to companies following a long-standing call from the British Chambers of Commerce for such an institution.

On the part of this observer though, praise is suspended given how many times entrepreneurs have been burned by the lazy rhetoric of successive governments that purport to put business first, but whose initiatives often fall woefully short of the mark.

Think, for example, of the Enterprise Finance Guarantee scheme, which was introduced to help smaller businesses struggling to secure finance to get bank loans, but which saw lending under the scheme plummet right up until the initiative was given the axe recently.

Then, there’s the ‘no fault dismissal’ policy, an initiative intended to give small businesses more power to hire and fire, which the government thought through so carefully that it was scrapped after companies turned out not to be too keen on it after all.

Efforts to encourage businesses to consider apprenticeships haven’t exactly been met with rapturous applause either. February’s policy to encourage apprenticeship hire, which included incentive payments of £1,500 for small businesses to take on interns, was undermined by the fact that 63 per cent of small businesses say that, bribe or not, they simply cannot afford to pay apprentices right now.

These are not encouraging precedents on which to forecast future policy success. And with regards to the mooted business bank, just how will such an institution significantly increase the availability or suitability of credit for SMEs?

It is intended that the bank would complement existing banks and other lenders, with an emphasis on helping 'dynamic and fast-growing companies' which report difficulty accessing finance, as well as address discouraged demand among some existing bank customers.

But as Gary Wilkinson, CEO at Cambridge & Counties Bank says, without knowing about how a business bank intends to eventually ‘partner’ with existing banks, it is difficult to see how its relatively limited ‘online’ distribution channel, without close customer contact and service, would fully understand and satisfy the diverse needs of UK SMEs.

Time will tell whether this turns out to be yet another half-baked initiative.

See also: SMEs get more bank finance