Liberal Democrat peers are attempting to force banks to disclose the amount of credit they offer to small businesses by tabling an amendment to the financial services bill.

Supporters of the amendment, due to be debated on Monday, include the bishop of Durham, Justin Welby, appointed archbishop of Canterbury last week. The Lib Dems have convinced the government to give the Financial Conduct Authority spun out of the Financial Services Authority, a mandate to scrutinise whether consumers get fair access to banking services.

Led by Lady Kramer and Lord Sharkey, the peers are tabling an amendment that would require banks to publish figures for quarterly lending to small businesses on a postcode-by-postcode basis. The idea is to enable the public to see which banks are lending and which areas benefit from loans that are granted.

Lending to small businesses has been controversial since the 2008 financial crisis, with banks insisting they are willing to lend but do not receive enough applications, while businesses argue they are being starved of credit. A funding for lending scheme has been created by the government to reduce the cost of borrowing for banks, which they can pass on to households and businesses.

Lord Oakeshott who resigned as a Lib Dem Treasury spokesman in the Lords over the Project Merlin deal that attempted to boost bank lending, said: “Lib Dems in the Lords are determined to make the banks come clean. Bank of England figures show lending to small businesses has been negative for four quarters.”


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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.