Cable lambasts banks again

19th Jul 2010 12:33

Business secretary Vince Cable has launched another broadside at the UK banks, accusing them of ripping off their customers and misleading comments over small business borrowers.In an interview with the BBC, Cable said customers were suffering as competition between the banks had had been affected by the credit crunch. "The UK bank sector is now even more concentrated so there's less competition, less choice and bigger temptation for banks to earn margins at the expense of their customers," he said. "When we talk about restructuring the banks what's going to come out of this is a more competitive system where the customers are not ripped off," he added.In a separate interview, Cable also accused the banks of misleading comments over the scale of their lending to small businesses.Recent comments by the state-controlled Royal Bank of Scotland and Lloyds Banking that their loan application approvals stand at more than 80% reflects the fact banks had made it more difficult for businesses to apply for loans, the business secretary said."This is misleading. I think they are raising the hurdle. All the evidence from business, from the Institute of Directors and other bodies, is that banks are not lending as much as is needed," he said.A government initiative to look at alternative ways of financing for small companies other than straight bank debt launches this week.The discussion paper will look at options such as equity and public market instruments, tax incentives to encourage investment in young companies and regional stock exchanges.