Credit plan a welcome move but will small firms benefit?
Wednesday, October 5, 2011
It being the season of party conferences, the team at PrintWeek Towers have been scouring the speeches of the great and, ahem, good in the hope of stumbling across some welcome respite from all the talk of double-dips and Credit Crunch 2.0.
hile the pickings may have been slim, among the subjects covered in the chancellor’s speech on Monday was his proposal to boost lending to SMEs via a multi-billion-pound ‘credit easing plan’ that centres on the Treasury supporting lending by creating corporate bonds to bundle business loans.
Any strategy to boost SME lending has to be welcomed, but as is always the case, the devil is in the detail and the detail is yet to be revealed – and won’t be until late November. The plan is reported to be similar to a successful US scheme, although questions are already being asked about what impact the scheme will have, other than grabbing a few column inches, and whether these bonds, with no proven UK history, will appeal to the markets. As far as impact on print goes, there are already concerns that firms on the smaller side of the accepted definition of SMEs – the vast majority of print businesses, in other words – will simply slip though the net.
However, at least in some way it’s an admission that Project Merlin, whose goal was to force banks to increase business lending, has failed and that something needs to be done. And if the chancellor’s plan does get off the ground, then while the direct impact on print may be limited – there’s still an argument that the trickle-down effect of improving banks’ confidence in lending to SMEs will boost high-street lending, hopefully to companies of all shapes and sizes. We can but dream.
Darryl Danielli, editor, PrintWeek