Mixed messages harming lending

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Britain’s coalition government has been accused by a leading Sheffield industrialist of being “naïve in the extreme” and sending out mixed messages to the banks over investment in industry.

Speaking in the Cutlers’ Hall, Master Cutler Professor Bill Speirs said the Government was pressing banks to straighten out their balance sheets while also urging them to lend more money.

“How can they do both? These are two things that are mutually exclusive,” said Prof Speirs, who, as Master Cutler, is widely regarded as the leading spokesman for manufacturing in the Sheffield City Region.

Prof Speirs said the lack of funding for small and medium sized enterprises (SMEs) was a serious problem for the region, which has few large scale corporate businesses and a predominance of advanced, but smaller, manufacturers.

“Funding is a real issue for SMEs and the government hasn’t addressed it. There isn’t money for growth and trying to get money out of the banks is appallingly difficult. There are means for larger corporates to get cash, but there is an issue in the Sheffield City Region that banks are not investing in our SMEs,” said Prof Speirs.

Returning to a theme he has addressed before during his year in office, the Master Cutler said the Government was wrong to claim that manufacturing could create jobs to replace those being lost in the public sector.

“It isn’t going to be straight forward. There will be some pain and, for the government to say manufacturing is going to mop up unemployment is naïve in the extreme,” said Prof Speirs, adding that the city region was not expecting hand outs, but manufacturing had to be freed from unnecessary regulation and given support for research and development, which banks could not provide because it was too risky.

“If industry in the UK is going to grow and survive, it needs to use technology,” continued Prof Speirs.

“We need to develop new technology continuously. If we don’t we will lose our competitive edge and it is fundamental that, despite the austerity, we need to find a mechanism that allows research and development to be funded to create growth for the future.

“That means the government needs to find the money for research and development.”

n Prof Speirs hands over as Master Cutler next month to the first woman to lead the organisation in its 387 year history. Pam Liversidge will also be the first former Mistress Cutler to head the Sheffield-based company.