The FMB has said that Labour’s Shadow Chancellor John McDonnell was right to highlight the problems SMEs face accessing finance in his speech at the Labour Party Conference. The FMB has opined that McDonnell would do well to apply his more interventionist approach to housebuilding finance.
“The Shadow Chancellor is correct in identifying the difficulty SMEs have in accessing finance as a key barrier to growth,” Brian Berry, Chief Executive of the FMB, said. “In few industries is this more true than in house building. Despite some improvements in recent years, too many SME house builders struggle to secure finance on affordable terms. If these firms can’t borrow, they can’t build. McDonnell has spoken about funding investment in infrastructure, and it’s vital that housing is not excluded from such plans.
“Businesses are often understandably sceptical of Government intervention, but this is one area where it would almost certainly be welcomed. Mr McDonnell could do worse than to revisit some innovative ideas in this area, such as the Help to Build policy of guarantees on private loans to SME house builders, which were endorsed by the Lyons Review and made it into the last Labour manifesto. The idea of well-funded regional development banks could also have a real part to play in an improved financial offer to the SME house building sector. By improving access to finance for SME builders we can generate sustainable locally-based growth, skilled long-term employment and go a long way to achieving the increased supply of new homes which all sides agree we need to build.”