Julian Knight: Welcome to the 'anti-bank', but it's only for the few

Amid much fanfare, customer-friendly Metro opens its doors – just the one branch so far, and that's in London
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The Independent Online

It promises a whole new approach to banking – provided, of course, you live in central London close enough to pop into its solitary branch or self-styled "store".

Metro, the first high-street bank to open in the UK since the 1800s, is finally here. And its launch day was something to behold – with a job lot of balloons and face painting for kids bringing more than a touch of the village fête to the occasion. Only the sharp suited PRs gave the game away that this is a serious business with millions at stake as they attempt to roll out a model pioneered in the US of simple banking focused on customer service.

Naturally, it's easy for me to be jaundiced, hearing such things. Almost every hour of every day I listen to some bank or insurance press officer drone on about how much their clients care about their customers when I suspect some would merrily see them all boiled down for glue if it meant they turned another penny profit. OK, I am exaggerating – a little – but the evidence of their can't-give-a-damn attitude is being felt by thousands of small and medium-sized businesses across the country who are having the life squeezed out of them by new borrowing terms.

But Metro says it wants to change all that. It has the key advantage of being a new name unencumbered by PPI mis-selling, unfair bank overdraft fees and other crimes against customers. It has its own set of promises, including to "surprise and delight our customers", (I've been surprised by my own bank several times in the past – such as when it decided that it didn't need to pay credit interest anymore). Metro also pledges to "deliver unlimited convenience, including seven-day opening" (poor staff having to give up their Sundays), and "no stupid bank rules", which is fairly open-ended.

A quick scan of its website, though, reveals something missing – interest rates. I can save anything from £100 in an instant-access, or from £500 in a fixed-term account, but it doesn't tell me what I'm going to get in interest. Like a summer blockbuster movie, Metro mortgages and ISAs are "coming soon", while the credit card is apparently available but again no sign of an interest rate. Until, that is, you delve deep into the terms and conditions, and there's the rub. The instant- access account pays a paltry 0.5 per cent; the fixed rate a slightly more palatable 2.5 per cent, and the credit card a competitive 13 per cent. All are a long way from market leaders, and the fact that the rates are so hard to find indicates that their marketing people know this. A bit more upfront honesty is needed. After all, its chairman, Anthony Thomson, is clear that Metro won't top the best buys as it doesn't have the economies of scale of a Lloyds or an HSBC. Instead, the proposition is all about offering different service standards, looking at what we despise about the big banks and doing the opposite.

However, it is such a small-scale proposition – 10 branches by next year, all in London – that the vast majority of Britons won't be able to sample this new difference, this type of anti-bank, if you like, until Virgin or Tesco enter the fray, and I seem to have been waiting forever for that to happen.

Pension change picks up speed

After years of vacillation, the tectonic plates of the UK pensions system are moving at something approaching speed. Last week we had the ending of the right for employers to fire workers for being over 65. Not before time.

As I've said many times, we can't hope to solve the crisis of people descending into old age penniless without allowing those who want to work to do so for as long as they can. And because this has been done by a largely Conservative government – and its interesting that the timing was announced while some of the biggest figures in business were in India with David Cameron – we've not heard a peep from employers.

In addition, the Government said that it was minded to keep tax relief on pensions at your marginal rate. Now, again, regular readers will know that I think tax relief is vital but that it's a travesty that around three-quarters of all the tax money put aside to top up a pension goes to the 10 per cent or so of workers who are higher-rate taxpayers. This inequality will stay, and really I'm not surprised. You see, consultation is with what are called stakeholders – that's the insurance companies and employer pensions schemes, and not you and me. It's in all these stakeholders' interests to keep the pensions tax relief status quo going – rather than making relief progressive so that basic-rate payers actually get a bigger tax break than at present.

This is for two reasons. First, they're all higher-rate taxpayers, as are the politicians. And, secondly, as far as the insurers and wealth managers are concerned, the real profitable business to write isn't the £30,000 to £50,000 pension pots most of us scrimp together but those of senior managers. These "stakeholders" are the only people politicians listen to, and to paraphrase Mr Cameron: "They're all in this together."

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