YORKSHIRE should become the home of an investment bank which backs growing businesses, according to Shadow Chancellor Ed Balls.
Mr Balls made the comments after meeting six Yorkshire-based entrepreneurs who have increased their sales and created jobs after taking part in a mentoring and business development scheme supported by the investment bank Goldman Sachs.
The Goldman Sachs programme – which is called 10,000 Small Businesses – has been rolled out nationally after a successful launch in Leeds in 2010. So far, one-third of the 614 companies who have completed the programme have come from Yorkshire. Mr Balls, the Morley and Outwood MP, praised the Goldman Sachs scheme after meeting the businesses at the Prashad Indian vegetarian restaurant in Drighlington, near Bradford.
Mr Balls said afterwards: “We need more businesses to expand and grow, and create jobs, and create great ideas and take them to market. The programme is a real godsend because, talking to the business owners here today, it’s obviously made a massive difference to them, and their networks and their confidence.”
Ms Balls said he wanted commercial banks, and banks in the City of London to work for the UK.
He added: “We want them to work to make Britain a stronger and better place for the future, and clearly some things have gone wrong in all these banks and they have got to be sorted out – the question is do the banks hope that the problems go away... or do they try and lead cultural change? You’ve got Goldman Sachs saying ‘We’re going to do something so people can see that we’re making a contribution to the economy.’
“It’s clearly working. It doesn’t absolve everything that has gone wrong, but I’m really pleased Goldman Sachs are supporting businesses here in Yorkshire.
“Enterprise education is really important... it’s teaching young people to work in teams, to solve problems and be good communicators. We need people with those skills in the public and the private sectors.”
Mr Balls said the businesses that had taken part in the Goldman Sachs programme had gained more self-belief, and they wanted to pass this on to young people.
But he added: “We’re still seeing business lending falling. Too often you hear of companies that are having a really hard time. The recent Royal Bank of Scotland report showed how things had gone wrong culturally in RBS.
“I want our banks to do a better job, and I think they’re trying to. We want to have more competition so there are more banks trying to provide those services.
“For these early stage growth companies, sometimes there are propositions that the banks find hard to deal with. Other countries like America and Germany have had institutions to fill that market gap.
“In America it’s called the small business investment company. We’re saying, ‘Let’s have a British investment bank to back growing businesses.’
“I would like to see it having a location here in Yorkshire backing growth businesses. Sometimes, businesses expand by equity and having new partners come in. Sometimes debt finance is the right way forward. If the commercial banks aren’t delivering you’ve got to fill the gap. We want to make sure we do that.”
Four years ago, Goldman Sachs announced that it was funding a business education programme in Yorkshire to help small businesses grow.
Around 188 small business owners and social enterprise leaders have graduated on the Goldman Sachs programme in Leeds. Under the programme, entrepreneurs go on a four-month business and management course which has an emphasis on real-life practical experience.
Partners in the scheme include the Saïd Business School, Aston Business School, Leeds University Business School, Manchester Metropolitan University Business School and UCL.
Yesterday, Mr Balls met Bobby Patel, who has developed the Prashad Indian vegetarian restaurant with help from the Goldman Sachs scheme.
Prashad started life as a small Indian vegetarian deli in Bradford run by the husband and wife team Mohan and Kaushy Patel. It is now an award-winning 70-seat restaurant in Drighlington.
For video, visit www.yorkshirepost.co.uk/video