Insider Media Limited

Labour leader Ed Miliband has accused the government fo failing businesses through the bank-backed Business Growth Fund (BGF).

The fund was launched in May by banks to provide equity of between £2m and £10m to businesses with good growth potential. It is backed by a group of banks – Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered – in conjunction with the British Bankers Association.

But the fund has only made two investments since it was set up – and none of them have been made in the Midlands. The first was made to Benefex, an online employee reward and benefits provider based in the South East; and London-headquartered travel management company Statesman Travel Group.

Speaking at a Commons debate, Miliband said: "The business growth fund was announced nine months ago, it has five offices and 50 staff. How many investments? A grand total of two. It is becoming a pattern with this Prime Minister: fanfare announcement then radio silence."

However, Prime Minister David Cameron hit back saying: "Let me just give [Miliband] the figures for what has happened under the bank lending schemes of this government. We have £190bn of new credit this year, up from £179bn last year. That is a huge increase.

"There is £76bn for small and medium-sized enterprises, up 15 per cent on last year. We are seeing more bank lending under this government, but we are seeing also the bank levy, so people in the banks are helping to pay to deal with the deficit that his government created."