Banks should admit to SME mistakes

A Labour MP is calling for banks to admit to mistakes they have made in dealing with small and medium-sized enterprises (SMEs).

Toby Perkins, speaking to the Yorkshire Post, said it was vital for the major banks to issue an apology following a number of misselling scandals if they were to re-establish trust with the sector.

He added that many small businesses are still struggling to access finance and this is hampering their long-term plans.

“The culture in banking that followed the deregulation of the banks in the 1980s, through to the ‘carpetbagging’ in the ’90s when all the building societies disappeared, meant we had a very narrow banking sector,” explained the Labour MP.

“Some of those cultural questions, the banks are on the way to resolving. Part of that process of redemption is the banks owning up to what actually happened, and not making it difficult for people to get justice about wrongs in the past.”

Last month, the Competition and Markets Authority (CMA) criticised both HSBC and Northern Ireland’s First Trust Bank for claiming that any small business customers must open a current account before they were to qualify for a business loan.

The CMA has now announced a full inquiry into the role of Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland to look at how services to small businesses and personal current accounts holders can be improved.

Labour is proposing that the creation of a regional bank network could ensure more SMEs can access money and would encourage institutions to offer a range of tailor-made solutions.

The party has also suggested freezing and cutting business rates to help more small firms to expand and invest in new staff.

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