Commenting ahead of the publication of the Banking Reform Whitepaper, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

“Sustainable economic growth means strengthening the UK banking system. However, addressing the problems of bank lending to businesses relies upon the government putting transparency and improving competition at the heart of any reforms. While the difficult relationship between businesses and banks won’t be fixed overnight, progress relies on reforms that will support enterprise and growth. Businesses need the ability to switch easily between banks, access to clear and transparent products and more choice between providers.

“A more competitive lending environment can only be achieved if those responsible for implementing reforms treat the nitty gritty of account switching and direct debit redirection as seriously as they do the ring-fencing of retail operations. When dealing with big changes to the regulatory framework for an industry of such massive size and scope, the guardians of change need to ensure that smaller measures to promote competition do not get lost behind the bigger headline-grabbing measures. Only then will we come close to achieving a good deal for business customers.

“When talking about the banking system that we want tomorrow, we have to look at the failings of the banking system today. Younger, smaller and higher growth firms find it much more difficult to access finance than others. The creation of state-backed business bank to lend to these businesses is something that the government can do now to give impetus to a stagnant economy.

“The financial sector is vital to the economy, and it is important that the UK continues to provide the right environment so the sector can prosper and grow. It is in everyone’s interest to avoid a repeat of the recent financial crisis, by improving regulation. In reforming banking rules, the government must be mindful of creating an environment that allows financial services firms based in the UK to compete internationally. We must be cautious of super-equivalence.”


Notes to editors:

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 104,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

Media Contacts:

Liz Larvin
Tel: 020 7654 5813 / 07825746812
Email: l.larvin@britishchambers.org.uk

Lisa Morrison
Tel: 020 7654 5812 / 07717682221
Email: l.morrison@britishchambers.org.uk