The Department for Business, Innovation and Skills was humming this morning. Lord Mandelson faced questions from reporters outside on Kraft’s decision to close down Cadbury’s Bristol Factory. Intriguingly, John Studzinski, the former HSBC high-flier who moved over to Blackstone, joined the crowds in the lobby. The private equity firm has been linked with a number of moves into the UK banking sector – whether it’s by acquiring RBS’s 300 branches, taking over Northern Rock with VIrgin Money, or launching a new bank. Studzinski’s presence at BIS may hint at imminent news…
Trade minister Lord Davies reflected the energetic mood, insisting to Real Business that the tide had turned in the UK economy and that the UK is moving into a phase where Britain’s innovative, export-minded businesses can prosper.
"Access to finance is no longer the issue," the former chairman of Standard Chartered repeated on several occasions. "It’s now about getting business to have the confidence to invest and to look internationally".
This view, says Lord Davies, was shared by a delegation of bank credit officers, small business lobbying groups, enterprise champion Lord Sugar and others who gathered yesterday (9.2.10) at BIS. One senior banker who was at the meeting agrees that there was consensus in the room: "we all agreed that the problem is not about supply of finance," the banker says, "it’s about demand". In other words, the banks are open for business; but not many people are coming through the doors.
This should come as little surprise. Britain’s SMEs are still in a state of shock after the deepest recession in living memor, one that has seen order books plummet and margins decimated. Many SMEs are currently fearful of inflation and interest rate rises that will see the cost of finance rise even further.
Davies is scathing of media pessimism about the UK economy. Having met and been "inspired by" thousands of businesses since his appointment as trade minister, he believes that Britain is one of the best environments in which to do business and is a world leader in science and innovation. We should not talk Britain down, he insists. Insiders at yesterday’s meeting also say that the government in on a "fightback" against media doom-mongers.
We’ll be reporting on other key Davies messages tomorrow. For now, here are a few tasters:
Every household must have broadband Britain needs more women in enterprise "I’ll defend Lord Sugar" Making government procurement more SME-friendly Great companies have strong values The future for venture capital And why Britain needs better role models, not just Cheryl Cole
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