On Monday, politicians and business leaders gathered at the Confederation of British Industry (CBI) annual conference. Simply Business CEO Jason Stockwood found the delegates looking to the future.
This year’s CBI annual conference took place against a pretty bleak background. Earlier in the day the CBI itself had warned that a combination of factors including high, complex taxation and excessive regulation were blunting the UK’s competitive edge. At the same time, delegates were all anticipating GDP figures which we knew would show that growth has slowed.
It was pretty surprising, then, to find a sense of cautious optimism amongst the audience. Throughout the conference there was a feeling that, despite the headline figures, things are moving in the right direction. Delegates seemed quietly positive about the good things that are happening in the UK economy, particularly within the SME sector.
I know it will win me few points with those who oppose the looming cuts, but I was impressed by David Cameron’s speech to the conference. The Prime Minister was bold and bullish in his championing of UK business, and that was refreshing to see. He seems genuinely optimistic about the potential that is so clearly demonstrated by Britain’s entrepreneurs, and ready to tackle the challenges they face.
Mr Cameron recognised that it is small businesses that will lead the way when it comes to building a sustainable recovery, and that we need to give these firms all the support they need. We should be thinking not just about the next six months, but about the next five or 10 years. Many of today’s micro businesses are going to be the next decade’s major employers – but only if we can foster the kind of environment they need. That is the major challenge for this government.
But politicians can’t do it on their own. The banking sector also has a major role to play – not just in the immediate recovery, but also in shaping the future that we want to see for UK businesses. In his speech to the conference, Barclays president Bob Diamond was keen to talk up his bank’s record on small business lending. Indeed, most of the major lenders now maintain that credit is available but small businesses aren’t taking it. This simply does not tally with what we are hearing from customers. Small businesses want to see tangible action from the banking sector. They want to see affordable credit. They want to see an end to excessive banking charges. And above all, they want to see Lloyds and RBS repay the trust that taxpayers have placed in them. We own these banks – they should be working for us, not the other way around.
Of course, if the banking industry’s old guard can’t keep up, new competitors will inevitably step in to fill the breach. I think we will begin to see a range of exciting alternatives to traditional bank lending. Companies like Funding Circle, which offers a peer-to-peer lending service to small businesses, are really leading the way here. In the absence of readily available bank finance, businesses will increasingly look to these new arrangements when they need to raise cash.
Businesses of all sizes are understandably nervous about what lies ahead. They are concerned about the implications of the Comprehensive Spending Review, and rightly so - the Chancellor’s plans will affect all of us. But there seems to be a burgeoning sense of positivity in the business community – a tentative feeling that the light at the end of the tunnel is getting brighter. I believe that the UK’s small business sector has the possibility to emerge from this transformative period stronger, more agile, and ready to take on the challenges of the modern marketplace.
But this will not happen without wholehearted support from government and the banks. That is why SMEs’ continuing calls for support must be heeded – and why at Simply Business we welcome any measures that will help this crucial sector.