LON­DON-Britain's busi­ness sec­re­tary launched a fresh at­tack on banks yes­ter­day, say­ing their un­will­ing­ness to lend to small busi­ness­es is hold­ing back an eco­nom­ic re­cov­ery. Speak­ing at the Lord May­or of Lon­don's trade and in­dus­try ban­quet, Vince Ca­ble said thou­sands of firms are trapped in a "val­ley of death" be­cause they can't se­cure cred­it they need.

Ca­ble told the au­di­ence that Britain's re­cov­ery "is be­ing im­per­iled" by the very in­sti­tu­tions-banks-that caused the 2008 fi­nan­cial cri­sis in the first place. The busi­ness sec­re­tary al­so used the speech to back away from a con­tro­ver­sial pro­pos­al to split the Roy­al Bank of Scot­land. The pro­pos­al came to light Tues­day when the BBC pub­lished a pri­vate let­ter from Ca­ble to Prime Min­is­ter David Cameron.

Yes­ter­day, Ca­ble con­ced­ed that the idea to carve up RBS would de­lay re­turn­ing the part-na­tion­alised bank to the pri­vate sec­tor and could fall foul of Eu­ro­pean Union rules.

AP