Manufacturing

Chris Ruane Excerpts

Thursday 24th November 2011 Commons Chamber

[Guy Opperman]

I completely agree. To put it in the vernacular, we need a go-to guy who is the one person looking after manufacturing.

[Chris Ruane (Vale of Clwyd) (Lab)]

Or a go-to girl!

[Guy Opperman]

Of course, it could be a woman—I accept that entirely. I was using the term generically. Such a Minister could provide co-ordinated responses to the concerns of manufacturing businesses. Having such a Minister would send out a message that this really matters. I challenge anyone to say that that is not a good idea. It is something that successive Governments have consistently failed to do, and I do not blame previous Governments for that, but doing it would send out a positive message for the future.

The second issue I want to address is banking and the chronic deficit that every Member of the House must be facing in their constituency—a lack of bank financing for businesses. Every one of us, in every constituency surgery, will regularly have businesses coming to us and saying, “I cannot get the funding I need,” or “I cannot get the borrowing I used to have.” It is a chronic problem. Much good work is done by business angels and credit unions—those hon. Members who attended the debate on credit unions yesterday will know that very positive steps were discussed there—but when it comes to bank finance, the system of the main banks is clearly logjammed. What can we do about that?

Currently, to set up a bank one needs £110 million-worth of assets—of cash, effectively—or the Financial Services Authority will not allow it. If the FSA relaxed that rule or changed the figure to £10 million, for example, then prominent local businessmen or businesses in a local community could set up a local bank.

Traditionally, the problem has always been that banks go bust, as they did in the 1920s and ’30s, because they over-borrow and over-lend in effect. If there were a restriction such that they could not exceed the money held on deposit with the Bank of England, the only loss that could be sustained would be the funds in that bank. The effect would be true localism. Someone could set up the bank of Hexham—or, in the Minister’s case, the bank of Bognor—and that bank would be specifically focused on providing small and medium-sized enterprise lending to local businesses.