The head of an influential group of MPs has written to some of the UK’s biggest banks over concerns that small businesses are struggling to open accounts.
Mel Stride, who chairs the Treasury Select Committee, has asked Lloyds, Metro Bank, Santander, Lloyds Banking Group, HSBC and Barclays to explain their current policies on business accounts.
Mr Stride said that the committee has heard reports, both from constituents and in the media, that small and medium-sized enterprises (SMEs) have faced difficulties opening new business current accounts.
He asked the banks to explain if they have changed their criteria for opening new accounts since March last year when the Covid-19 lockdowns first started.
He also asked bank bosses to say if customers or potential customers are facing longer wait times, how they can complain, and if the banks had been receiving more complaints than usual.
Mr Stride also asked banks if they were weighing up a potential withdrawal from the SME market.
“As the recovery from the pandemic gets under way, many SMEs will continue to need vital support from financial institutions,” Mr Stride said in a statement.
“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.”
The banks have been given a month to respond to Mr Stride’s letter.
Many of the UK’s smallest businesses have been on life support over the last year, relying on Government loans, grants and furlough payments to their staff in order to survive.
Several banks have been landed in trouble with Competition and Markets Authority because they required businesses to open a current account in order to access Government-backed Covid loans.