Recovery could be 'choked off' warns CBI

CBI director-general John Cridland has warned that the UK’s recovery will be “choked off” unless efforts are stepped up to give business access to finance. Setting out a menu of ideas, he argued that good ideas from the Government had so far been “lost to poor implementation”.

His plan includes giving ‘corporates’ an incentive to invest in supply chains rather than hoarding cash, improving Government trade finance measures, and making the New Buy scheme more appealing to first-time buyers.

Mr Cridland said: “We need to raise levels of finance in the economy to support our growth aspirations. We need an ‘action this day’ approach, and the lesson so far is that we must not allow good intentions to be lost to poor implementation. I want to see urgency to stop the recovery being choked off by a lack of finance.”

He added: “We need to refresh our approach to financing so that it’s squarely behind our long-term vision for a rebalanced economy. We have to focus our financial firepower on high-growth firms, global exporters and the UK’s dynamic larger companies. Measures to support high-growth medium-size businesses must be at the forefront. They need more than pure bank finance, and to make more use of equity to fund expansion. None of this is new, but the time for action is now.”