The chair of the Treasury Select Committee, Mel Stride MP, has written to six high street banks to respond to difficulties faced by SMEs opening new business current accounts.
The high street banks are Natwest, HSBC, Barclays, Lloyds Banking Group, Metro Bank and Santander.
- Whether their criteria for opening business accounts has changed since the start of the pandemic
- Whether waiting times have increased
- How customer complaints have been handled
Commenting on the correspondence, Mr Stride said: “As the recovery from the pandemic gets underway, many SMEs will continue to need vital support from financial institutions. It’s critical that these institutions are adapting to the requirements of SMEs as the economy starts to pick up. The committee wants to know more about the state of the business current account market, and whether action needs to be taken to mitigate the difficulties faced by SMEs.”
Other MPs who sit on the Treasury Select Committee include arch Brexiteer Conservative MP Steve Baker and Labour members Rashanara Ali and Dame Angela Eagle.
The committee exists to question and have oversight of both the Treasury and HMRC, as well as the Bank of England and the Financial Conduct Authority.
Banks have been given a month to respond to Mr Stride’s letter.
Responding to the news, Rich Wagner, CEO and founder of Cashplus Bank, said: “For many years viable UK small businesses have been let down and made to jump through hoops by dominant high street banks that are only really interested in serving larger, established businesses. Nonetheless, it is shocking that many of the largest players chose to slam the door shut completely at a time of desperate economic need and when company registrations were hitting record monthly highs.
“This crisis has shown that it is innovative digital challengers who are truly committed to breaking down barriers and finding responsible ways to offer banking and, crucially, lending services to the smallest and newest UK businesses. The government must look again at schemes to level the playing field in this market and direct more effort and resources to making these initiatives stick so that small businesses can benefit from the banking services they deserve as they lead the economic recovery from Covid-19.”