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Banks deaf to small business needs?

24 April 2008

A decision by the Competition Commission to lift price controls on the four largest banks serving small and medium-sized businesses is "wholly misguided and needs an urgent review."

This is the opinion of the Federation of Small Businesses (FSB), following the withdrawal of a deal that meant Barclays, HSBC, Lloyds TSB and the Royal Bank of Scotland Group were supposed to offer small businesses free banking, or an account paying interest of at least 2.5 points below base rate on in-credit balances, or both.

FSB Financial Affairs Chairman Mike Cherry commented: "We are very disappointed that the Commission reached this decision – this has been a tumultuous time for small businesses, and this is the latest in a long line of body blows."

This complaint coincides with the review of the legality of bank charges in the High Court by Mr Justice Andrew Smith, whose judgment is expected before Easter.