Tough times ahead, warns Ken Clarke MP

Ken Clarke, Rushcliffe MP and Shadow Secretary of State for Business, Innovation and Skills, was in Nottingham recently to address an audience of business leaders from across the East Midlands.

The former Chancellor of the Exchequer was the guest speaker at an Entrepreneurs’ Dinner, organised by business advisory firm Deloitte, at Harts restaurant.

The purpose of the event was to bring together some of the region’s leading entrepreneurial businesses to discuss the effects of the economic downturn, the opportunities that exist, the actions taken so far, what more needs to be done and the routes to recovery. 

Speaking at the dinner, Mr Clarke predicted tough times ahead, warning businesses to expect “a bumpy ride and a bumpy recovery”.  He also emphasised that the next four to five years would be challenging for whichever party wins the next election but that a business-friendly government would be crucial to the future well being of the country.

He said: “The key role of government will be to create an environment in which entrepreneurship can flourish.  This will involve attracting more inward investment to the UK and ensuring that business funding is provided through the most effective delivery mechanisms. We must also ensure that the UK fully exploits the commercial and economic benefits of our first-class research and development culture to generate jobs and income in the UK.”

Deloitte Entrepreneurs' Dinner

Ken Clarke MP with David Jones and Mark Doleman from Deloitte

David Jones, corporate finance associate partner at Deloitte in Nottingham, who also spoke at the event, said the current economic situation presented challenges and opportunities to all businesses across all sectors.

He said one of the biggest concerns for local businesses was the ability to access capital.

“The government’s quantitative easing measures have been aimed at freeing up capital but there is still a widely held belief that banks remain unable to lend,” he said.

“Local businesses have reported having banking facilities reduced, even where there are no defaults or trading difficulties.

“This tightening of credit has clearly made the tough times more difficult for many but could also restrict the ability of businesses to react as and when demand recovers. Responding to any upsurge in demand will depend on the availability of working capital to finance growth, meaning that the quantity of credit is as much of an issue as the price.

“The availability of credit will therefore have a significant impact on the pace of economic recovery.”

Mr Jones said anecdotal evidence suggested that business confidence was starting to return to the region, albeit slowly.

“One of the positives to come out of recent events is the growth in exports that firms in the East Midlands have experienced in the last 12 months,” he said.

“Local businesses now expect positive, albeit marginal, growth in some key performance indicators. In our region, firms have reported an overall increase in year to date turnover and over the next 12 months sales are expected to grow further.

“Looking ahead, businesses are more positive, expecting profits to grow by 0.2 per cent in the coming year.”



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