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?

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

PROMOTED VIDEO
Voices
Oscar Pistorius is led out of court in Pretoria. Pistorius received a five-year prison sentence for culpable homicide by judge Thokozile Masipais for the killing of his girlfriend Reeva Steenkamp
voicesThokozile Masipa simply had no choice but to jail the athlete
Arts and Entertainment
Sister Cristina Scuccia sings 'Like a Virgin' in Venice
music

Like Madonna, Sister Cristina Scuccia's video is also set in Venice

Arts and Entertainment
James Blunt's debut album Back to Bedlam shot him to fame in 2004
music

Singer says the track was 'force-fed down people's throats'

News
i100
Life and Style
The Tinder app has around 10 million users worldwide

techThe original free dating app will remain the same, developers say

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Helpdesk Analyst

    £23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

    Senior Helpdesk Analyst / Service Desk Co-ordinator

    £27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

    Senior Pensions Administrator

    £23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

    Corporate Actions Administrator / Operations Administrator

    £25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

    Day In a Page

    Two super-sized ships have cruised into British waters, but how big can these behemoths get?

    Super-sized ships: How big can they get?

    Two of the largest vessels in the world cruised into UK waters last week
    British doctors on brink of 'cure' for paralysis with spinal cord treatment

    British doctors on brink of cure for paralysis

    Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
    Let's talk about loss

    We need to talk about loss

    Secrecy and silence surround stillbirth
    Will there be an all-female mission to Mars?

    Will there be an all-female mission to Mars?

    Women may be better suited to space travel than men are
    Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

    'They poured water on, then electrified me...'

    If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
    James Wharton: The former Guard now fighting discrimination against gay soldiers

    The former Guard now fighting discrimination against gay soldiers

    Life after the Army has brought new battles for the LGBT activist James Wharton
    Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

    Panic over Ebola threatens to infect the midterms

    Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
    Premier League coaches join the RSC to swap the tricks of their trades

    Darling, you were fabulous! But offside...

    Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
    How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

    How to dress with authority

    Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
    New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

    New book on Ian Curtis sheds fresh light on the life of the late singer

    'Joy Division were making art... Ian was for real' says author Jon Savage
    Sean Harris: A rare interview with British acting's secret weapon

    Sean Harris: A rare interview with British acting's secret weapon

    The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
    Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

    Tim Minchin interview

    For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
    Boris Johnson's boozing won't win the puritan vote

    Boris's boozing won't win the puritan vote

    Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
    Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

    Tim Wheeler: Alzheimer's, memories and my dad

    Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album