Cable ups the heat on banks

BRITAIN’S biggest banks are today set to face up to small business organisations and business secretary Vince Cable in an attempt to show that they are committed to rebuilding trust between the sector and smaller firms struggling to get access to credit.

Cable will chair the first meeting of the Small Business Economic Forum, which will also be attended by representatives from HSBC, Barclays, Lloyds Banking Group, the Royal Bank of Scotland, Standard Chartered and Santander, as well as the Federation of Small Businesses, the Bank of England, the IoD and the CBI.

The business secretary said the measures agreed last week by the banking taskforce – including a new £1.5bn funding facility for small businesses and a new code on lending which will allow firms to independently appeal banks’ decisions – represented a “modest” start to reforms.

Cable is also privately calling on banks to show restraint in the upcoming annual bonus season, warning unadulterated excesses from the banks will not be tolerated amid a wider culture of austerity.

Chancellor George Osborne also yesterday called on banks to sign up to a code of practice on tax avoidance by November. Only four of the 15 big UK banks have signed so far.