Business secretary accepts industry isn’t taken seriously enough but says Coalition is committed to its growth.
Business secretary Vince Cable admitted the fashion industry is not taken “seriously enough” as an economy-boosting sector but insisted its role is crucial to “building the economy”.
Speaking exclusively to Drapers during a tour of Central Saint Martins College’s new building in King’s Cross, Cable said fashion is seen, unfairly in his opinion, as an “incidental luxury”. “The Government has an obligation to support it,” he said. Asked whether the industry’s impact on the economy is taken seriously enough, he said it was not.
Cable said the reason for his visit to the university, which was followed by a tour of Jaeger and Aquascutum’s head offices, was to bring together the “two big strands” of his role. “I’m responsible for universities and for building the economy, and the creative industries are central to that,” he told Drapers. “I wanted to come here to know if [Central Saint Martins] needs any funding.”
He added: “The Government is committed to the continued growth of the [creative] sector. Last year we set up the Creative Industries Council with figureheads from across the creative and digital industries. We are supporting creative companies through research and development tax credits, enterprise finance guarantee schemes and grants from the Technology Strategy Board.”
As part of the visit, Cable held private meetings with Nigel Carrington, rector of the University of the Arts London, of which Central Saint Martins is a part, and Harold Tillman, owner of Jaeger and Aquascutum and chairman of the British Fashion Council.
“Vince Cable is a man who takes everything on board; he’s a very serious-minded person and not looking for PR. People listen to him,” Tillman told Drapers. “But the problem is about banks. Bringing interest rates down is not what people are looking for. People are looking for money to grow, but I don’t believe banks are helping businesses that are asset-backed and the Government is not giving them the incentive to.”
According to Anupam Jhunjhunwala, chief executive of value retailer Store Twenty One, banks tend to assess businesses on their sector and for retail, in particular, the tough trading conditions and that of business partners are discouraging lending.
He said: “Luckily we are backed by our parent company, so banks tend to look at us as a whole group. “The biggest thing the Government could do to help is to restore consumer confidence. People aren’t spending because they don’t have enough money. They’re cautious because of cuts and job losses. It’s this that is hitting retail most.”
An HSBC source denied there is a problem with banks lending to retailers. One of the issues has been retailers securing long-term loans to fund working capital and short-term cash generation which leads to cash shortages, the source added. “Where’s the cash going to come from for the next cycle of orders?”
Being able to demonstrate sustained cash flow and an ability to repay is key to lending, the source argued.