| Government must act to help SMEs on the brink Across England and Wales, there are small companies in industries as varied as law firms to electrical appliances stores who feel increasingly aggrieved at what is beginning to look like a predatory practice perpetrated by some of the mainstream commercial banks. Many businesses feel as though they were not supplied with full information or a wide variety of scenarios when their loans were accompanied by a "hedging" product supposedly designed to smooth out the peaks and troughs of interest rate liabilities. Further, we believe this issue is of such importance that we will seek to amend the current Financial Services Bill as it progresses through Parliament to improve the rights of small businesses in the future. Furthermore our amendment calls on the Government to consider giving SME representative bodies the right to complain about market failures to the Financial Conduct Authority (FCA), the new specialist consumer protection authority created under the Bill. So alongside our call for ministers and regulators to take urgent action now, Labour is also proposing an amendment to the Government's Financial Services Bill which will require the Government to bring proposals before the Commons within three months to make it easier for groups of SMEs to bring collective proceedings before the courts in respect of financial services claims, giving small firms similar rights to the thousands of consumers eventually compensated for missold PPI products. But as pressure mounts in Westminster, among affected businesses and from the legal profession, there is a noticeable reluctance on the part of the Government to take the lead and stand up for the hardworking victims in scores of small firms throughout the country. We have written to Vince Cable, the Business Secretary, whose silence on behalf of Britain's small companies has been deafening. The products, sold as protection and a form of insurance, have time and again become huge and unanticipated liabilities in their own right. The stories of the way these products were sold, the paperwork that accompanied them and the terms and conditions attached come from too many different sources to be dismissed as coincidence or carelessness. Standing up for the SMEs that include so much of Britain's jobs, growth and tax revenues is something Ed Miliband, Ed Balls and Chuka Umunna have put at theheart of Labour's vision of good capitalism. Last week more than 20 MPs met with victims of this emerging scandal along with their lawyers to find out more about the alleged mis-selling that's occurred. They are telling us that the heavy downside costs they face because of the current Bank of England base rate situation are paradoxically pushing otherwise healthy businesses to the brink of bankruptcy. Now there is a real opportunity for this Government to follow this lead and do what is right; Vince Cable and the Treasury must not let Britain's small businesses down. |
Sunday, 29 April 2012
Government must act to help SMEs on the brink
