Member Article

Businesses challenge incoming Bank of England governor

A group of businesses written to the new Governor of the Bank of England to express their concerns about how the current financial climate is impacting them.

Spearheaded by financial services firm, CashFlows, the group have written an open letter to Mark Carney, who is due to take up the post on July 1st.

The signatories come from a range of industries including publishing, health and beauty and financial services.

Alan Todd, director of Cambridge Business Advisors, put his name to the letter. He said: “I would urge Mr Carney in his first 100 days in office to look at the way start-ups and new businesses are supported. There’s still little knowledge of what Government schemes can offer. Despite all the money that is going into the various schemes there has been little promotion of the schemes themselves. T

“The two examples of Start Up Loans and grants to manufacturing companies – often SMEs are totally unaware these exist! Going back a few years, organisations like Business Link and its advisor network would have been advising local companies on what support was available. Business Link has now all but disappeared; it’s just a website. The Department for Business, Innovation and Skills now has to consider how they communicate with SMEs.”

In the letter, the businesses outline a gap in information and guidance on business finance, and a lack of transparency about how banks approve overdrafts, and determine charges.

They also argue the bank manager and business relationship has been “watered down,” effectively turning banks into call centres.

The group call for more local level, in-house small business support and guidance from bank managers. In addition to the challenges raised, the letter charges Mr Carney with recommendations for his first 100 days in office.

The recommendations include: ensuring better publicity of alternative financial services providers and support outlets; bringing back the bank manager relationship; make the Prompt Payment Code legally binding; enforcing transparency in bank charges and scoring structures; and to talk to 100 start ups in 100 days to gain a better understanding of British small businesses.

Damian Clarkson, MD, The London Kitchen, added: “My advice to Mr Carney would be this: don’t spend too much time with big business. Look to small businesses, as these are the companies that will grow and ultimately are the backbone of our economy.

“He needs to get out and meet the one-man bands that keep our country going. If business isn’t nurtured them you face the possibility of a lost generation of talent. People looking to setup flower shops or cupcake businesses, young people, the next generation – they’re all looking on and wondering if setting up a business is worth it and what level of support they would get. The Government and the Bank of England need to be doing more to help small businesses and freelancers – my neighbours and your neighbours.”

This was posted in Bdaily's Members' News section by Tom Keighley .