24-12-2007
FSB hits out at business finance move
The Federation of Small Businesses (FSB) has accused the Competition Commission and banking industry of not listening to smaller enterprises.
A decision by the Competition Commission to lift the temporary price controls that were supposed to assist small and medium enterprises (SMEs) has been criticised by the federation, which claims banks make £2 billion a year in profits from small business finance.
Until this latest ruling, HSBC, Barclays, Lloyds TSB and the Royal Bank of Scotland had agreed to offer small businesses with free banking or with an account that paid interest on balances of at least 2.5 percentage points below the key interest rate.
Mike Cherry, FSB financial affairs chairman, said: "We are very disappointed the commission has reached this decision and ask that it is urgently reviewed.
"When the whole case is looked at it is clear to see that the commission has been deaf to the actual experiences of small businesses."
He also said that the four banks had failed to promote the business finance price controls to SMEs.
The Competition Commission has asked the Office of Fair Trading to ensure that small businesses know how to switch banks accounts.