Look beyond London, urges British Chambers

Economics Editor,Sean O'Grady
Monday 28 April 2008 00:00 BST

One in four British companies has already begun to feel the effects of the credit crunch on the running of their businesses, the British Chambers of Commerce said yesterday, but the business group also claimed that the economy was being much less seriously affected outside London.

The BCC said 25 per cent of companies now thought that the credit crunch was damaging their ability to access fresh funds. More than one -in-three said the credit crisis had forced them to change their plans for expansion this year.

But a majority of companies, especially those outside the troubled finance and property sectors, report no significant problems as a result of the credit crunch. In his keynote speech to the BCC Convention, which opens today in Liverpool, the director general of the BCC, David Frost, is expected to stress these differences.

"If you lived your life in London you would often be left with the impression that the economy was about to fall off a cliff – from my visits around the country I can assure you it is not," Mr Frost will say.

"When I speak to them, be it in Aberdeen, Birmingham, St Helens or Rotherham, they not only inspire me with their success, but they tell me that whilst business is challenging they are doing well. They tell me that far too much attention is paid to what happens in the Square Mile and Canary Wharf and not the real economy outside. Perhaps this is a reflection of our national preoccupation with financial services."

Mr Frost's thoughts chime with comments made by Richard Lambert, director general of the CBI, who has repeatedly said this year that businesses outside of the capital are not reporting a significant slowdown.

The BCC's poll, conducted by Populus, also revealed a widespread disaffection with politics among the 250 mostly smaller businesses surveyed. Some 85 per cent of businesses do not believe that politicians understand the needs of business, with neither major party receiving much support.

When asked whether a Labour or Conservative government would prioritise the needs of business the answer was low for both: Labour are on 14 per cent, with the Conservatives at 22 per cent.

The BCC said business taxation was the most important priority for the next Government.

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