Chancellor’s infrastructure boost vital for SMEs, says Hampshire Trust Bank

Chief executive officer Mark Sismey-Durrant said SME contributions to the economy were fast becoming more significant particularly in Northern powerhouses, therefore better infrastructure was needed to drive economic growth.

Chancellor Philip Hammond (pictured) had used his first (and last) Autumn Statement to announce a new National Productivity Investment Fund which will provide £23bn of additional spending in areas such as transport, digital communications, research and development, and housing.

Hampshire forecast in a recent report that SME contributions to the economy in cities such as Leeds and Manchester were set to grow 15% by 2020.

Therefore better rail and road links to connect these cities with the rest of the UK were crucial in driving economic growth, Sismey-Durrant said.

He said: “With UK SMEs set to contribute £217bn to the economy by 2020, there is no doubt that support for the country’s smaller businesses is particularly important. Infrastructure projects that improve connections and enable SMEs to conduct their business with one another with greater ease and efficiency will be vital in ensuring this predicted growth remains firmly on track.”

SMEs to tackle the housing crisis

Sismey-Durrant also pointed to SME housebuilders as the key to solving the country’s housing crisis and helping the government reach its housebuilding targets of one million new homes by 2020.

He echoed the views of fellow specialist lender LendInvest, among others, which had called on the government to implement measures to create a stronger SME construction sector in September.

Responding to the Communities and Local Government Committee’s inquiry into the housebuilding industry, LendInvest had asked the government to offer SMEs preferential deals on public land as well as banning larger players from holding on to land banks.

“It is not enough to set ambitious housebuilding targets without addressing the challenges in the sector that are preventing developers from delivering the targets that the government aspires to achieve. Instead, measures should be taken to address the shortages in land, opportunities for finance and the lack of skills in the sector to truly get Britain building,” the lender said.

The Chancellor pledged an additional £2.3bn to be directed towards housebuilding in his Autumn Statement, to be used for projects such as roads and water connections that will support the construction of up to 100,000 new homes.

On top of that, £1.4bn would be used to provide 40,000 new affordable homes and further £1.7bn to speed up the construction of new homes on public sector land, Hammond said.

Sismey-Durrant said the injection of funding was “encouraging news”. He said: “The number of new homes currently being built was significantly below the level needed to meet demand, so it is crucial we focus on boosting supplies. We believe SME housebuilders are key in helping to fill the housing gap and specialist banks play a crucial role in providing finance to this important sector.”