Stephen Cooper, UK head of manufacturing at KPMG, comments on today’s industrial strategy launched by the Government:
“Any announcement which addresses issues around growth and investment in the UK economy is welcome. However, manufacturers have been crying out for a robust industrial strategy for years. The economic downturn hasn’t made it easy for businesses to expand and grow. Smaller businesses in particular have been hit hard and need help now if they are to survive the coming quarters. If this announcement turns rhetoric into actual action for Britain’s struggling businesses we could see our economy take a very important step forward.
“A new government-backed “business bank” dispensing loans to small and medium-sized enterprises (SMEs) is an important development because new regulations aimed at making big banks safer have been restricting their ability to lend to smaller businesses. Larger companies, especially if they are listed, generally have more financing options available to them. This means that the SMEs, who at the moment are bearing the brunt of the credit squeeze, suffer. There is one caveat though: any government-backed bank will need to avoid the pitfalls of the 1970s and will have to do their due-diligence before accepting loan requests.
“Help for SMEs could have important and positive knock-on effects for some larger businesses too, particularly in high tech manufacturing fields. For example, car manufacturers such as Jaguar Land Rover who are expanding rapidly at the moment are reporting that their growth is being constrained by smaller suppliers who are struggling to raise finance. Therefore initiatives to increase the availability of credit to SMEs should in the end help boost our manufacturing sector as a whole.
“Industry bodies across sectors will be hoping that today marks the beginning of an overarching industrial policy that could prove a turning point.”
For further information please contact:
Arti Mohan, Corporate Communications
Tel: 020 7694 8735
Mobile: 07768 858 085
KPMG Press Office: 020 7694 8773
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.