Talk to a company inside London and you’ll hear the gloom stories of
the economic downturn; go further afield and you’ll get a response that
is more upbeat and accurate.
So argues David Frost, the director-general of the British Chambers of
Commerce, who yesterday said that “too much attention” is paid to what
happens in the capital.
His verdict stems for a survey of 250 small businesses, commissioned by
the group this month, which found that the majority have not been
affected by the credit crunch.
Typically, these firms are either not in financial services or are
located outside the capital, meaning their exposure to the turmoil,
which started in August, is limited.
“If you lived your life in London you would often be left with the
impression that the economy was about to fall off a cliff,” Mr Frost
told the BCC convention yesterday.
“From my visits around the country I can assure you it is not .When I
speak to them, be it in Aberdeen, Birmingham, St Helens or Rotherham,
they not only inspire me with their success, but they tell me that
whilst business is challenging they are doing well.”
In the survey, a quarter of firms reported problems accessing fresh
funds since the credit crunch, and just over one third had put off
expansion plans as a result.
But when asked whether their new funding or expansion plans were hit as
a direct result of the credit woes, about six out of ten firms answered
“no.”
It is not the first time that a brighter outlook than headlines might
suggest has been suggested: the CBI director-general Richard Lambert
has repeatedly said trading has not slowed outside of London.
Perhaps what’s to blame, Mr Frost argued, for the doom and gloom is a “pre-occupation” with financial services.
Heading off the counter-argument, he explained: “Yes London is the
centre of global financial services, but this should not detract from
the contribution to this country of the millions of small businesses
not engaged in financial services, but contributing to the wealth of
this country, be it in manufacturing or support services.”
Small companies, he said, are “the backbone of the British economy and
they are in the frontline of these intense global challenges. What has
impressed me over recent months has been their amazing resilience.”
However, the findings are not an excuse for small firms to get
complacent. The BCC believes too much focus has been placed on the
consumer driven economy to the detriment of an export led model, as
illustrated by the £50bn trade deficit.
But it is this area that, so far, members of the group are championing.
“They are succeeding in tough export markets,” Mr Frost said.
“They understand that the current global credit difficulties will
impact, but they tell me that far too much attention is paid to what
happens in the square mile and Canary Wharf and not the real economy
outside.”
Apr 29, 2008
Email this article
Printer friendly page
Previous Page
