Labour has outlined plans to utilise a state-owned British Business Bank to provide funding for female-led businesses, should it secure victory in the upcoming general election.

As part of its financial inclusion agenda, Labour intends to establish funding targets specifically aimed at supporting businesses led by women through the British Business Bank. These targets will be complemented by a comprehensive review of the financial exclusion experienced by women.

The announcement of these initiatives by shadow City minister Tulip Siddiq on Monday follows a thorough review of Labour’s financial services strategy earlier this year by ten City experts.

Siddiq’s proposal entails setting new performance benchmarks for the British Business Bank, directing investment towards businesses led by women and ethnic minority founders. Additionally, the bank will be mandated to produce reports on the diversity of applicants considered for funding.

While the exact funding targets remain unspecified, Siddiq’s office affirmed that they will be established in collaboration with the British Business Bank. Notably, a report from 2019 revealed that only 1% of venture capital investment in the UK was directed towards companies founded by women.

The funding commitments will be unveiled during an event celebrating women in the City, hosted at the headquarters of the Association of British Insurers (ABI) on Monday. Labour will also pledge to initiate a thorough review of female financial exclusion, overseen by a committee chaired by a Treasury minister and involving various government departments. This review aims to identify and address the barriers hindering women from accessing financial benefits enjoyed by their male counterparts.

Labour’s focus extends to the disparity in financial literacy, the “financial advice gap,” and the concerning “gender pensions gap,” which sees women in their 50s having, on average, a third of the retirement savings of men.

Ahead of the event, Siddiq emphasized the importance of Labour’s plan in promoting gender equality within the financial services sector and addressing the prevalent financial exclusion faced by women.

Meanwhile, the British Business Bank refrained from commenting on Labour party policy.

In a separate development, the Sunday Times reported that Labour has enlisted prominent business leaders, including former Bank of England governor Mark Carney, Aviva’s chief executive Amanda Blanc, and Barclays’ CEO CS Venkatakrishnan, to advise on the creation of a national wealth fund.