A business-led economic recovery risks being undermined unless the Government increases competition in banking, EEF, the manufacturers’ organisation, has warned.
Responding to the Parliamentary Commission on Banking Standards, EEF, which represents almost 6,000 UK manufacturing and engineering businesses, warns without access to competitive finance economic recovery could be stifled. EEF has written to Treasury officials warning that, while there is focus on banking standards and ethics, an issue for growth in manufacturing is more access to finance for investment.
Terry Scuoler, chief executive of EEF, said: “Problems with accessing finance hold back growth. With business investment still a third below its pre-recession peak, getting finance at the right price and terms and conditions remains a huge problem for small and medium-sized businesses. Many of them have disengaged from banks all together.”
In its submission to the Treasury, which is expected to formally respond to the banking commission ahead of this summer’s parliamentary recess, EEF warns that investment remains 34 per cent below the pre-recession peak, adding that poor access to finance, is a key reason for this performance.