Speaking at the NACFB Expo in Birmingham today (26th June) David Raw, managing director at UK Finance, outlined what he sees as the key “quick wins” for an incoming Government following the upcoming General Election.
Noting the likelihood that the election will lead to the first Labour Government in 14 years, Raw said regardless of political persuasion, Parliament should keep small businesses (SMEs) at the heart of policy.
Quick wins to boost this key part of the economy included making the Growth Guarantee Scheme permanent, tackling the issue of late payments, taking a closer look at capital rules, and unlocking private investment in net zero.
On a grander scale, Raw said the new Government’s approach to the overall regulatory environment would be a key issue, stating that this should foster competition and “not unduly burden financial services firms.”
He said the market needs “proportionate regulation and policy responses, as this has a serious impact on the ability of the sector to provide much-needed finance.
“Too much, or inappropriate, regulation undermines this.”
Looking back over the shape of the commercial finance and SME markets over the past decade or so, Raw said that the pandemic made “significant economic and social damage,” in addition to rising energy bills and sharp rate increases.
He said: “This caused a major change for businesses, and it’s unlikely we’ll see a period of low rates again in the foreseeable future.”
In addition, following the Global Financial Crisis, lenders tightened their criteria, while demand for business finance has “remained relatively subdued” following the pandemic, as businesses focus on the repayment of Covid-19 loans.
Nevertheless, Raw said this market had remained “remarkable resilient,” with commercial lenders lending at near-record levels post-pandemic.
He added: “There is cause for cautious optimism about the direction of travel, but there remains a degree of uncertainty about how strong the rate of recovery will be.”
