Julian Knight: Small business is bleeding, but guess who still denies it?
Some 120 businesses a day folded in the first quarter. How many could have been saved by their banks?
Sunday 03 May 2009
It may only be May but we already have a winner for The Independent on Sunday's "statement of the bleeding obvious" award. It has to go to John McFall MP and his band of merry men and women on the perennially crusading Treasury Select Committee who released the second report last Friday into the UK banking crisis. It states that top bankers had made a "mess" of things by behaving in a "reckless" manner.
Now that's what you call insightful. Where the report got more interesting, though, and has created a spat was its annoyance at the treatment of small businesses by the banks. To paraphrase the committee, it said that banks were applying the squeeze to their small business customers.
I'm fortunate to know a fair few small business people and they all report the same thing; up until a few weeks ago they were having their borrowing cut arbitrarily and are being charged arrangement fees and rates you'd associate with corrupt government officials in banana republic not supposedly respectable banks.
What's the British Bankers' Association (BBA) response? It says that the few small businesses having a hard time in a recession are not giving an accurate picture to MPs, and that lending is actually up on a year ago. All fine then. Until you remember that this is from the same association that blamed journalists for partly creating the financial crisis by daring to report it.
The BBA has proven itself to be nothing more than a dissembling apologist for the completely inexcusable. As bankrupt as the institutions it represents. As for the plight of small business, there has been a trickle-down of cash of late, but for too long the missives from head office that lending must re-commence were ignored at a local level. The Federation of Small Businesses tells me that in the first quarter, some 120 businesses a day were folding. How many of those crucial wealth-creating firms could have been saved with a little flexibility and understanding from their banks? As for the Select Committee assertion that it will take a generation for banking to get back to normal, I ask – what is normal? If the MPs mean the past decade, let's hope we never go back to normal. Not to another speculative property bubble, which makes people wealthy for doing little and excludes a vast swathe of our society until it all goes pop and the under-30s can afford to join the merry-go-round and we start again.
Do as I say...
When it comes to my own personal finances I have a shameful confession to make. I opened a letter from my building society yesterday informing me that my savings account will be paying a whopping 0.05 per cent interest until further notice. That means that on £1,000 saved – taking into account compound interest – I will have earned a grand total of £10 in interest sometime around the summer of 2024.
Despite my exhortations in this column to shop around, I have committed the classic sin of not reviewing my interest rate. I sort of presumed that if not a best buy, it was hovering somewhere just below. It wasn't: my account has been the subject of savage cuts by an institution that got into trouble through bad investments. It reminds me of the Nationwide advert where a bank salesman character tells the saver that the big juicy rate initially on offer was there just to get them to bite, and has since been cut and they have been thrown into the "keep net".
Research by Investec Private Bank shows that only one of the best buy accounts from early 2007 is still near the top of the table. The others are now paying next to nothing or, in Icesave's case, has gone bust. Like millions of savers I have been thrashing around in the keep net for some time without even realising it. Do as I say, not as I do.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Board creates magnetic field to achieve lift
Follow the latest events from this Champions League fixture
Company reveals $542m investment in start-up building 'a rocket ship for the mind"
Like Madonna, Sister Cristina Scuccia's video is also set in Venice
Singer says the track was 'force-fed down people's throats'
techThe original free dating app will remain the same, developers say
- 3 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 4 Former East 17 frontman Brian Harvey turns up at Downing Street and 'demands to speak to Prime Minister'
- 5 The inventor of the Facebook 'like' button says he never made a 'dislike' button because he feared the 'unfortunate consequences'
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Lord Freud: Tory welfare minister apologises after saying disabled people are 'not worth’ the minimum wage
Lord Freud hangs on as MPs of all parties 'call for his head' over disability comments
iJobs Money & Business
£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...
£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...
£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...
£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...
Day In a Page
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village