30 years ago, manufacturing as a percentage of the UK’s gross domestic product was 30%. It has subsequently diminished in that time to around 15% of GDP – or in today’s money, around £3200 billion.

Why hasn’t this been noticed? Is it the act of a magician; is it a conjuring trick? Where has this £3200 billion a year gone? The fact of the matter is that up to two years ago we hadn’t noticed its absence and, fuelled by cheap and available credit, through a consumer orgy of greed we spent our way in the shops out of this problem and retailers, wholesalers as well as financial services provided us with this ability and made up the shortfall in GDP.

This became apparent when the music stopped; the banks stopped lending money to the consumer as well as each other and as a consequence we are beginning to feel the pinch of spending decline.

It has gone too far in the case of bank lending. Entrepreneurs are the life blood of the economy and are job creators but they cannot do it without the support from the banks. The government’s overriding objectives as owner of two of the major banks in the UK should be to encourage and, if necessary, legislate the banks to lend again. Nobody expects the banks to lend to a poor covenant or an extremely risky transaction but the pendulum has swung from ‘Gung Ho lending’ to ‘Shutting Up Shop’, and a sensible midway point is needed.