Commentary: Small firms need own ombudsman
Wednesday 16 December 1992
The banks are happy with the findings, especially as they emerge during a week in which their top men have been called in to see the Chancellor about small business lending. Barclays Bank, the Department of Trade and Industry, the European Commission and the Rural Development Commission helped the Economic and Social Research Council with the pounds 1.4m cost of the project.
David Lavarack, head of small business services at Barclays, claimed the report upheld 'much of what we have been saying over the last 12 months'.
The programme was co-ordinated by Prof David Storey of Warwick University's Centre for Small and Medium-Sized Enterprises, and took in research by several academics with the aim of increasing the understanding of small business and its importance to the economy.
It would be surprising, however, if this report helped the dust to settle quickly in the continuing row about small businesses and banks. The recession is destabilising the relationship, because it is killing off large numbers of firms. The banks are the pressure point, because it is usually they who call closing time and put in a receiver. In the great majority of cases the banks have no alternative, but there are insensitivities, mistakes and injustices as well.
One reason for the explosions of anger that litter the Chancellor's correspondence in-tray is that the relationship between banks and small businesses is too one-sided, because a firm in trouble cannot in practice shop around for a new bank if it feels it is being mistreated. Neither can most small firms afford to go to law to fight their banks.
The Banking Ombudsman is restricted to dealing with private individuals and unincorporated businesses. Big businesses can look after themselves. But the majority of incorporated small businesses are also tiny and run in a very personal way (with most of their profits going to their directors.) In these circumstances, an ombudsman specifically for small incorporated businesses would make a lot of sense. With the argument between businesses and banks now so polarised, the ombudsman would also be able to find out how much genuine abuse there is. And the Chancellor would have someone to pass all those letters to.
- 1 This is what the one in ten British men who pay for sex need to know
- 2 Lee Evans announces retirement from comedy on The Jonathan Ross Show
- 3 These grandmas smoking weed for the first time are wonderful
- 4 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 5 Angelina Jolie confuses everyone with 'ay up me duck' East Midland's greeting to Derby actor Jack O'Connell at awards show
Jeff Fletcher dead: Britpop guitarist is decapitated by lorry in horrific traffic accident
These grandmas smoking weed for the first time are wonderful
Jimmy Ruffin dead: Motown legend, who wrote 'What Becomes of the Brokenhearted', dies aged 78
New York snowstorm: Five dead and state of emergency declared as 'wall of snow' buries Buffalo
Woman opens professional cuddling shop – gets 10,000 customers in first week
'Muslims pre-date Columbus in discovering America,' says Turkish president Erdogan
Former Tory PM Sir John Major says 'we would not have an NHS without migrants'
France 'blocks' Russian sailors from boarding a warship
G20 summit: David Cameron warns Vladimir Putin that Russia's relationship with the West is at a 'fork in the road' over Ukraine
Myleene Klass: Ed Miliband 'strikes back' by comparing UK's need for Labour's mansion tax to Hear'Say track
Coalition government has 'shifted money from poorest to better-off' through welfare cuts and tax reductions, study claims
iJobs Money & Business
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
$175 - $200 per annum, Benefits: full benefits: Carlton Senior Appointments: P...
Not specified: Carlton Senior Appointments: Senior MD Financial Advisor - San ...