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The British Business Bank (BBB), the UK’s state-owned development lender, is entering a bold new chapter. Under the leadership of CEO Louis Taylor, the institution has secured a major £10bn expansion in funding, aimed at driving Britain’s economic revival under Labour’s industrial strategy. Yet, as Taylor charts a forward-looking agenda to support innovation and regional growth, the organisation still carries the burden of its controversial pandemic-era legacy — one that will soon face further scrutiny during the Covid inquiry.
I. A Renewed Mission for Growth
1. A Strategic Funding Windfall
Louis Taylor’s tenure at the helm of the BBB has taken a significant turn with the awarding of a fresh £10bn mandate, increasing the bank’s funding capacity from £15.6bn to £25.6bn. The allocation is part of Labour Chancellor Rachel Reeves’s economic overhaul, where Taylor proposed a comprehensive expansion of the bank’s investment scope. Ministers, in Taylor’s words, “ordered pretty much the whole menu,” embracing the BBB’s proposal in full.
This injection of capital is intended to supercharge the bank’s role in nurturing UK startups and scaling high-potential businesses. Target sectors include advanced manufacturing, clean energy, creative industries, life sciences, defence, tech (including AI), and financial and professional services — industries seen as crucial to Britain’s long-term economic health.
2. Expanding Reach Beyond London
A key pillar of the BBB’s new mandate is addressing regional disparities. The bank plans to extend its investment programmes across the UK, identifying and funding promising ventures outside the capital. In addition, the BBB is launching an intensified direct investment strategy, allowing it to take equity stakes of up to £60 million in individual firms — a major shift that could help retain “future superstar firms” within the UK rather than see them gravitate abroad.
II. Shifting the Investment Model
1. Crowding In Rather Than Competing
Rather than rival private capital, the BBB aims to act as a catalyst — attracting further investment into companies that might otherwise struggle to secure funding. Taylor emphasized the importance of anchoring firms in the UK economy, explaining that when startups are backed predominantly by foreign investors, they tend to relocate overseas.
This new equity-focused approach is also designed to strengthen the UK’s innovation ecosystem. Whether it’s supporting cancer-prevention biotech firms or nuclear tech developers, the BBB wants to ensure Britain is not just incubating but retaining the next generation of industry leaders.
2. Balancing Risk and Reward
However, with ambition comes risk. Taylor admitted that the strategy involves high stakes, acknowledging that many of the businesses the bank supports may ultimately fail. Nevertheless, he argued that the potential returns — estimated to be up to 6% above the cost of government borrowing — justify the approach.
“We know some bets won’t pay off,” Taylor said. “But the successes should more than make up for the losses.” This outlook aligns with the broader Labour strategy of encouraging the City and financial regulators to embrace risk as a tool for national growth.
III. Pandemic-Era Scandals Still Cast a Shadow
1. Legacy of the Bounce-Back Loans
While the BBB’s forward-looking agenda is gaining momentum, its past continues to raise questions. Most notably, the bank played a central role in the government’s £47bn bounce-back loans scheme during the pandemic. While the initiative helped prevent economic collapse by providing quick cash to struggling businesses, it became infamous for widespread fraud and poor oversight.
A recent report from the public accounts committee criticized the government’s “flat-footed” response in attempting to recover nearly £2bn in losses, placing the spotlight once again on BBB’s operations during the crisis.
2. Links to Controversial Cases
The BBB also faced backlash for approving lenders like Greensill Capital for Covid loan schemes. Greensill, which ultimately collapsed, breached its lending limits and distributed £400m to Sanjeev Gupta’s Liberty Steel — a move that has since raised serious concerns over governance and due diligence.
Another issue drawing scrutiny is the Future Fund, established under then-Chancellor Rishi Sunak, which supported startups — including some with ties to Sunak’s wife, Akshata Murty. Though these actions occurred before Taylor assumed his post in June 2022, they remain part of the narrative the BBB must now defend before the Covid inquiry.
IV. Taylor’s Leadership in Focus
1. Repairing Reputation and Building Confidence
Despite the controversies, Taylor is confident that the inquiry will view the bank’s actions in a fair light. “We’re not resurrecting a broken reputation,” he said, defending the bank’s performance. Instead, he insists that the institution already holds a strong track record — one that he intends to preserve and strengthen.
Taylor points to the pandemic’s outcomes: up to 650,000 businesses and over 3.4 million jobs were sustained through the BBB’s interventions. The cost of fraud, in his view, was an unfortunate but necessary price for economic stability during an unprecedented crisis. “It was like paying an insurance premium to keep the economy going,” he argued.
2. High-Stakes Leadership with Clear Accountability
Earning £356,400 in 2024, Taylor is one of the most high-profile civil service leaders currently under the microscope. He’s navigated what he describes as “bruising endeavours” in public service and is now tasked with not just restoring trust but demonstrating value through the bank’s ambitious investment initiatives.
V. A National Investment Engine in the Making
1. Collaborating with Institutional Capital
One of Taylor’s most pressing goals is to attract more UK institutional investors to back homegrown businesses. The problem, as he sees it, is that too many startups end up relocating their operations, listings, or headquarters to foreign markets because capital originates elsewhere.
The BBB’s role is to act as a counterweight, anchoring economic value within the UK. “If there’s no UK money in these companies, they tend to gravitate to where their capital came from,” Taylor warned.
2. Minimizing Political Risk, Maximizing Economic Impact
The BBB’s future success will hinge not just on its financial returns, but also on its ability to avoid the political pitfalls of the past. With Labour in power and eager to boost the country’s economic performance, the bank has a pivotal role to play. But it must do so with greater oversight, improved due diligence, and transparency — especially as it begins placing direct equity bets using taxpayer funds.
Conclusion: From Crisis Manager to Growth Accelerator
The British Business Bank is at a critical juncture. It stands as both a symbol of past pandemic challenges and a beacon for future economic revival. Louis Taylor, steering the institution through political change and public scrutiny, is betting on innovation, regional investment, and private-sector collaboration to reshape Britain’s business landscape.
But with billions at stake and past failures still lingering, success will depend not just on bold ambition, but on careful execution and lasting public trust. The Covid inquiry may revisit old wounds, but the real test lies ahead — in whether the BBB can transform taxpayer investments into tangible, long-term national growth.
