In an open letter to Mark Carney, who takes over as Bank of England Governor today. BCC Director General, John Longworth, urges him to do more to ensure a stable business environment, which will help to secure the UK’s future competitiveness.On behalf of the Chamber of Commerce Network, John Longworth calls on Dr Carney to capitalise the British Business Bank and ensure that existing schemes, such as the QE programme and the Funding for Lending Scheme, go further to support real businesses.
Here is a copy of the letter in full:
Dear Dr Carney,
On behalf of the British Chambers of Commerce – representing 53 accredited Chambers, who in turn have thousands of member companies with millions of employees across the UK – we offer our congratulations as you take up your new role as Governor of the Bank of England.
There is no doubt that the economic situation today is better than when your appointment was first announced. Yet while we are seeing signs of a stronger recovery across the business community, we have no illusions about the challenges ahead for the UK economy, nor the complexity that you and your colleagues on the MPC will face in shaping monetary policy.
That said, we believe that the Bank of England can take real action under your leadership to help entrench that recovery and secure our future competitiveness – by helping to secure the flow of finance to the new, growing and dynamic businesses that need it most.
We urge you to use the Bank of England’s influence and balance sheet to:
- Capitalise the Business Bank as a major new player in SME finance, working with and alongside private financial institutions to unlock new sources of patient growth capital and risk capital. We are struck by the success and importance of the Business Development Bank of Canada in your native country, and hope that you can help the Business Bank to develop a similar vision and remit.
- Ensure existing programmes better support the ‘real economy’. We believe you can help stimulate lending to businesses by making the Funding for Lending Scheme more effective and by widening the existing Quantitative Easing programme to include the purchase private-sector assets including securitised SME debt (rather than just gilts).
- Lever in private investment in UK infrastructure, working together with the Treasury.
Finally, we would also ask that you focus on ensuring a stable business environment. This can be done by giving business as much certainty as possible on low interest rates, which have played a critical role in underpinning both business and consumer demand. At the same time, BCC’s Quarterly Economic Survey shows that inflation is a significant concern for companies across the economy. The MPC’s decision-making must take both of these important business concerns into account.
From Chamber members across the UK, we wish you success in your new post, and look forward to working with you intensively to entrench a business-led recovery and higher rates of economic growth and prosperity.
We look forward to meeting with you soon, as our accredited Chambers of Commerce do with Bank of England Agents in all parts of the UK.