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Lib-Cons must force banks to lend a hand

Eric Musgrave

A few weeks in, it’s still taking time to get used to the idea of a coalition government. But the alliance of blue and orange - a fashion combination possibly not seen since the acid house music craze - is proving popular with many people I’m talking to.

Last week in Huddersfield, at a meeting of textile-focused members of UKFT (clothing fabrics, interior textiles and high-tech performance textiles were all well represented), a strong feeling was expressed that the new Government ought to force (or allow) the banks to start lending money more readily again - or to take on the funding job itself. While everyone wants to see the financial sector regulated, the lack of available funds is strangling opportunities for growth. Hopefully, the collective powers of two political parties can unlock this conundrum quickly.

A little more joined-up thinking from Westminster (and Brussels) would help too. According to recent press reports, the Lib-Con coalition is “broadly supportive” of seeking an EU agreement to unilaterally cut CO2 emissions by 30% by 2020. If UK textile manufacturers, for example, are so inefficient that they can improve their energy performance by almost a third in a decade - which is a pretty crazy assumption to accept - then the routes to improvement must inevitably involve substantial capital investment. Given the lack of working capital and bank funding, how are these (over-) ambitious improvements to be achieved?

While our double-headed Government cannot do much to influence international exchange rates, it has more scope to ease the straitjackets on the banks. Getting the message over early to the new administration is vital and UKFT has already contacted the 650 MPs best placed to assist British manufacturers.

Eric Musgrave is director general of the UK Fashion & Textile Association (UKFT)

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