Member Article

UK is "bad capitalist" nation, says Northwest chief

A North West financier has claimed the UK is a nation of “bad capitalists” and warned that we will fall behind our international competitors if we don’t take “radical action”.

Manchester-based chief executive of The UK Manufacturing Accelerator, Malcolm Evans, has said in a research paper that there is a lack of commitment to business growth within the UK government.

The research, backed by a campaign named the Building Britain’s Balance Sheet, is sceptical of the Government’s soon-to-launch Business Bank.

It says: “It is unclear how the new ‘Business Bank’ might convincingly address the core issues. It is not a ‘bank’, it is a money wholesaler reliant on existing channels of allocation of capital.”

Mr Evans added that various government initiatives are failing to connect with the intended sectors, and criticised the Regional Growth Fund for not taking more risks with their lending.

He said RGF and other such investment funds are playing it too safe, and are “chronically underfunding” growth businesses across the country.

Mr Evans said: “At least half of the just-announced £80m for the North West is destined to end up in various schemes instead of going into real business.”

The paper goes on to compare the UK with the U.S, and suggests their example of supporting businesses on a funding structure of one third debt and two thirds equity is one we should follow.

An “unhealthy reliance on debt” was also highlighted as being exacerbated by a “debt drought”, despite efforts from the Government through the Funding for Lending scheme.

Mr Evans called for co-ordinated action on national enterprise culture, as well as an open dialogue about the role of the banks.

He also said the UK needs to focus away from schemes in favour of real businesses, the creation of a new class of “patient capital” and a raft of measures to boost investment by individuals, new capital providers and the private sector.

Views expressed in the Building Britain’s Balance Sheet paper were based on discussion, interviews and consultation carried out and compiled by Mr Evans.

This was posted in Bdaily's Members' News section by Miranda Dobson .