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Page last updated at 07:44 GMT, Monday, 2 August 2010 08:44 UK

Bank business lending 'not good enough'

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A member of the Commons Treasury select committee has said that the level of bank lending to small business is "not good enough" and has hinted that parliament may revisit the issue of bankers' pay and the whole structure of the industry if the situation does not improve.

As the UK's five main banks are set to announce a return to profit, Michael Fallon MP told Today presenter Sarah Montague that they are not meeting their targets for lending to small businesses. They are, he said, insisting on much tougher conditions before loans are agreed "and that's not good enough".

Mr Fallon said that banks "have come through the recession with a great deal of help from taxpayers... now they've got to help fire up the economy".

And he added: "If the old banks are too big and too slow and too uncompetitive, then maybe we need to look at the structure of banking."

But Peter Ibbetson, chairman of Small Businesses for NatWest and RBS, insisted that those two banks are doing what they can to help.

"We are approving 17 out of 20 applications that come to us. We are starting about 2,000 start-ups every week. So we are there speaking to many, many businesses...

"There are some clearly who we find it difficult to help but they are the ones we regard as not viable. And it would be quite wrong of us to help businesses and support businesses if we don't regard them as viable."


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