Simon Read: Banks' discrimination is out of order and must be stamped out

Banks are discriminating against women, a damning report revealed this week. A study by Professor Noreena Hertz suggested discrimination against pregnant women and those on maternity leave, as well as female entrepreneurs seeking loans.

Hertz, of Duisenberg School of Finance, said: "I've uncovered evidence which shows that women face discrimination from banks when they are seeking business loans or applying for mortgages. It's as if we've gone back in time to the 1950s."

Banks have come in for so much criticism in recent years – and rightly so – but they all claim that they are now putting things right in terms of treating customers fairly. Hertz's report – commissioned by the Institute for Public Policy Research think-tank – suggests otherwise.

Her evidence includes cases of women rejected for mortgages when on maternity leave; of banks rejecting mortgage applications from women when they found out they were pregnant; of women being asked about their "family planning" when applying for a home mortgage; and of lenders insisting that pregnant women or women who have just given birth be back at work before they can get a loan.

She also claims that women are forced to pay 1 per cent more on a business loan than men. She says that female entrepreneurs claim they are questioned significantly more often than male applicants about whether they have done enough research into their business.

Hertz says the Government has a legal obligation to investigate her claim and a legal duty to eliminate prejudices and practices based on stereotyped roles.

"Banks need to be put on notice that such behaviour is both unlawful and unacceptable. It is also economically damaging to the UK as a whole," she points out.

The British Bankers' Association hit out at the research, saying that it is "based on a small number of website postings". However it said that it would look closely at the accusations.

Meanwhile Nick Clegg has told the Equalities minister, Lynne Featherstone, to examine the problem.

Hertz may have done her research through social media and websites such as Mumsnet, but that shouldn't lessen the concerns raised by her conclusions. The banks claim that they do not discriminate. For instance Halifax, Britain's biggest lender, told me: "We base our lending decisions on a person's income, not on whether they have a young baby."

But with Britain's banks' appalling record when it comes to dealing with customer complaints, it's easy to believe the conclusions of this study. Rather than dismissing the evidence, banks must prove that they don't treat women differently or charge them more for loans.

And if the Government's probe into the issue reveals more widespread discrimination, then the banks should be forced to pay for treating women as second-class citizens.

s.read@independent.co.uk