Pulling together

It was good to see the new business minister, Michael Fallon MP, answering questions from the SMEs who will be critical to leading the recovery of UK plc. What came through from the debate was that finance is still available in the market and there are opportunities out there for manufacturers. That is highlighted by a 4% increase in net lending by Lloyds Banking Group in 2012. We recognise the key role of manufacturing to rebalance our economy so that is why in the first nine months of 2012 we lent £2.6bn to the manufacturing sector. But we are now going further and in July 2012 we committed to an additional £1bn of lending to manufacturing businesses which will provide a boost to this important sector. Our £1bn manufacturing funding commitment is making finance more accessible, affordable and effective for the industry. The commitment draws upon the Lloyds Bank Funding for Lending scheme, offering manufacturers a 1% discount for new business loans and hire purchase. I think there is a big opportunity for us to work more closely with government in identifying and supporting the manufacturing sectors. Initiatives like Funding for Lending are a good example of pooling our resources to help frontline companies. But as well as sharing the benefits with existing customers, we are also looking for new customers. That is why we have sent more than 100 of our relationship managers and credit controllers on a week-long manufacturing induction course run by the Warwick Manufacturing Group. We want our managers to be able to empathise with the very difficult demands of running a manufacturing site. All our research shows manufacturers want a relationship manager who understands what it's really like to run a modern factory. The course is a stepping stone towards that. Our relationship managers learn about 5S, Six Sigma and, most importantly, they go out and spend a day in a manufacturing site. That time is not spent in the boardroom, but walking the factory floor to get a flavour for what is really going on in the business. By having an appreciation of what manufacturers do, we are going to be able to add far greater value through our services. We are also backing this up by handing greater lending powers to local managers. I applaud what Michael Fallon had to say on cutting red tape. I think excessive bureaucracy is a massive burden on UK businesses, in particular on SMEs. Anything the government can do to alleviate the pain would be welcome. Overall, I was left with the impression that the government has a will to help UK manufacturing, but it is doing so through lots of individual initiatives. What would be good is if there was an overall policy focused specifically on this sector. Perhaps that will come over the course of the next few years. If it does then, for me, there is one stand-out area where the government can help manufacturing and that is skills. There's a drought in skilled engineers coming into the sector, which is going to be a major drawback for manufacturing growth. The situation is urgent and we have to work out a way of promoting engineering much more effectively as a career option in schools. The government has to help us spread the message in the national media. What about launching a national manufacturing week? We have a great story to tell. British manufacturers lead the world in all sorts of innovative and exciting engineering fields. The factory environment is also increasingly cutting edge and far removed from the chimney stacks of yesteryear. Yet, when you see a story on the news, the TV crews are always interviewing a factory employee in overalls with heavy production going on in the background. That kind of manufacturing does exist and we should be proud of it, too, but there is much more depth to the industry which the wider public should know about. In the interests of our economic growth, it is vital that banks, manufacturers and the government urgently seek to redress the balance.