Martin Whitfield MP: We need a trustworthy banking system to support and help SMEs to prosper
The critical bond of trust which must exist between enterprise and business banking has never been lower, writes Martin Whitfield MP.
Small and Medium sized businesses are the ‘lifeblood’ of our economy, a throwaway remark we MP’s are often too guilty of overusing, but it’s one that will always hold true.
It perseveres because these companies, according to the department for Business, Energy, and Industrial Strategy, account for 99.9 percent of businesses in the UK and turnover £1.9 trillion each year. When these enterprises flourish, Britain’s economy keeps pace.
However, the critical bond of trust which must exist between enterprise and business banking has never been lower. Rocked by PPI complaints, the HBOS Reading fraud and the toxic culture of the RBS Global Restructuring Group, the industry has systematically failed small businesses across the UK.
Beyond the brick and mortar of local banks, lies a relationship between a business owner and a financial advisor. I’m concerned that these scandals have not only broken this bond, to exasperate the problem, the very buildings themselves are disappearing from our high-streets
This is an issue disproportionality affecting Scottish consumers, since 2015, 368 branches will have been closed by the end of this year. These closures have been shoddily replaced by alternative banking solutions such as our dwindling post-office network and a mobile banking bus that rolls into town twice a week.
That’s if the mobile banking service makes it into town at all. In my own constituency, it broke down before it could even reach its first stop.
The people of East Lothian are fully aware you can’t always rely on every promise made on the side of a bus. However, for the 20 million people who still rely on face-to-face banking services, this is symbolic of a decline in the relationship between the banks and their customers.
We are approaching an interesting demographic tipping point, where online banking will within time, become the dominant tool for consumers to access financial services. Yet for businesses who still value the judgement, the security and assurances of a specialised financial advisor I do not believe a full transition to online banking will serve the interests of these companies.
Today, I will be taking this issue to parliament and debating the general failures that exist within our banking system. I will be taking the frustrations of my constituents and arguing that this industry, which used to command a huge amount of respect within communities, takes a greater interest in restoring the trust of its consumers.
Small Businesses are the lifeblood of our economy, an economy that needs a trustworthy banking system to support and help SME’s to prosper.