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Archbishop Welby calls for closer investor relationships to support small businesses

25 October 2013

WITHOUT "a deep spiritual base in the Christian tradition", economic growth by itself was "insufficient" for the country's well-being, the Archbishop of Canterbury, the Most Revd Justin Welby, said on Thursday. His remarks came before the Office for National Statistics' confirmation on Friday that the UK economy grew by 0.8 per cent over the past financial quarter.

Speaking at a conference, "Blueprint for Better Business", in central London, Archbishop Welby called for investors to take a more "holistic" view of business, and for more support for small-business start-ups. He criticised the "distancing of the investor from the thing in which they invest".

The Archbishop gave the example of a painter and decorator from the North East, who had been laid off in the recession of 2008-10, and took 18 months to secure a £200 loan to start a business.

"After 18 months of unemployment, he managed to get a loan for the money he needed to start his own painting-and-decorating business," Archbishop Welby said. "He started it, he paid off the loan in three weeks, and he has a full order book . . . for about seven months."

The painter and decorator now employs three people. "The loan he needed was £200 to buy a ladder, some paint brushes, and a basic stock of tools for the job he needed to do," the Archbishop said.

"What kind of financial-services system do we have in this country when someone who needs £200, and is going to work their socks off once they've got it, can't get it for 18 months? What kind of hope does that give across this country, and how does that challenge our investment, our financial services, and the use of the monies we have?"

Archbishop Welby said: "We have to have a financial-services system that recognises the dignity of that human being, his integrity, and enables him to take risks, to succeed, and to fail. . .

"Our financial sector today has the largest sum of money it has ever had, both as a proportion of GDP and in absolute terms in cash holdings. Unless financial services and investment begins to look at a whole view of this country . . . and to challenge the inability of the economy to care for those on the edge, there is not a good future."

The Archbishop said that investors and lenders had to move from an "adversarial" relationship with stakeholders and lenders. This positioning "ends up with punishment rather than learning and redevelopment" when things go wrong.

"It's very difficult to do that with small companies, and therefore we need to look again at our structures, and see how we can be diversified enough and have enough subsidiarity to be able to relate to different areas, and not do everything wholesale from one place, far away from those who need it.

"I know that sounds idealistic, but I also understand from 20 years of working mainly in areas of deprivation that it doesn't work when you're a long way away.

"We have to ask ourselves: what is the social purpose of business? What kind of society do we want to be in and want our children to inherit? And if our financial-services system is not delivering that kind of investment, then we have to think again."

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