Help us give the bankers a grilling
- Published Date: Monday 31st January 2011
I was down in London last week to meet with Vince Cable.
The Business Secretary asked me to be part of an Entrepreneurs’ Forum established as part of the government’s agenda to engage with business people on how best to foster a culture of enterprise.
The panel includes former BBC Dragon James Caan and Bravissimo founder Sarah Tremellen – it was great to join them for the first time to discuss the barriers that are preventing people from starting up and growing their own business.
We discussed a number of issues but the conversation kept on returning to the lack of available funding from the banks.
Start-ups are not being given access to investment and established businesses are not being given the money to realise new growth opportunities.
As the confidence returns to the market and new contracts are won, this will require a significant pre-investment before businesses will see the money drop into their bank accounts.
And that’s where the challenge lies as working capital comes under for increasing pressure within the SME business community during 2011.
I’ve lost count of the number of business people I’ve spoken to in the past few months who have won new business but don’t have the cash to fund it.
You may be reading thinking the problem can be solved by simply working an advanced payment clause into the contract.
In an ideal world yes, but we are not in an ideal world at the moment. Everyone is being squeezed and not many businesses have this luxury.
The reality is that short-term cash-pipeline is being turned off when it is needed the most – and if the banks don’t lend, business will be unable to grow.
During the forum meeting in the capital, Vince suggested that I join him in his next sit-down with the chief executives of HBOS and RBS.
He didn’t need to ask me twice to give them a grilling on behalf of Scottish Sun readers.
We all have questions we want to ask the country’s top bankers and if you have one please send it to me by clicking Here
You deserve an answer right from the top, and you can be assured I’ll get you one.
Aside from the banks not lending, it’s been a pretty gloomy week as news filtered through that our economy showed 0.5 per cent negative growth in the three months leading up to January.
I could almost hear a collective groan across the country as Bank of England boss Mervyn King told us all that we’ve never had it so bad.
In his first speech of the year, the country’s most powerful banker admitted that many households are in misery.
And it’s little wonder – real wages are no higher in 2011 than they were in 2005 but inflation has ballooned by 12 per cent in the past four years.
Figures from the Office for National Statistics show the average salary has increased by only 7.6 per cent since 2007, from £24,043 to £25,879.
In the meantime, however, rocketing household bills have more than wiped out such wage rises.
In addition to those granted meagre, below-inflation pay rises, millions have had their wage levels frozen while some have had their pay cut.
Mr King said the wage squeeze is likely to continue this year, with inflation currently at 3.7 per cent but an average predicted pay rise of only 2.1 per cent.
And he piled on the gloom by declaring that the cost of living is set to keep on rising, making a situation which he described as ‘uncomfortable’ even worse.
It’s not good is it?
Some of you will get wage rises in the next year and some will have to take a hit and tighten the belt further, that’s just the way it is.
The important thing is to be in employment and playing your part in making your employer stronger in order to exploit new opportunities across an emerging marketplace.
Times are hard I know, and you can be forgiven for wondering if it’s ever going to get better.
But stick with it, the good times will come back.
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