The influential Treasury Select Committee is to launch an investigation into small business lending amid a growing scandal about banks’ treatment of the economically vital sector.
The investigation was prompted by the testimony of Government adviser Lawrence Tomlinson and Sir Andrew Large, a former deputy governor of the Bank of England.
Both men have produced reports sharply critical of Royal Bank of Scotland, with Mr Tomlinson’s containing allegations that RBS’s Global Reconstruction Group forced viable businesses into bankruptcy.
Sir Andrew described that as “extreme” but said he would be gravely concerned if regulators, currently investigating the bank, found it to be true.
The inquiry will focus on three issues; access to finance for small and medium sized enterprises, the scope for opening up the sector to more competition and the treatment of SMEs by banks.
The first evidence session will take place on Tuesday.
The committee’s chairman Andrew Tyrie said: “SMEs report that they are struggling to secure adequate access to finance, from banks and elsewhere. It is vital to a sustainable economic recovery in the UK that this market be restored to working order.”