HC Deb 11 March 1992 vol 205 cc550-1W
Mr. French

To ask the Chancellor of the Exchequer what discussions he has held with chairmen of major clearing banks following his initiative last year on the treatment by banks of small businesses; what information he has on the measures taken to ensure that each bank has dealt satisfactorily with complaints, especially in relation to any compensation made to borrowers; and if he will make a statement.

Mr. Norman Lamont

I am pleased to say that seven banks—Midland, Lloyds, National Westminster, Barclays, TSB and the Bank of Scotland and the Royal Bank of Scotland—have now published codes of banking practice for their business customers. The codes are well written, in plain English and they all reflect the seven principles I outlined in my statement on 17 July to the House Official Report, columns 181–83. In some cases they go beyond. All the codes explain how complaints may be pursued, and that would include any requests for compensation where errors have been made.

The codes are, of course, only now being implemented. I have not held any further discussions with the chairmen of the banks. In the final analysis, it is the reaction of customers, not the Government, which matters, as the Treasury and Civil Service Select Committee said in its report published on Monday. I warmly welcome the Committee's encouragement to small businesses to compare the different banks' codes and stimulate competition by letting the banks know if they do not feel the codes meet their requirements in any way. Four of the banks have said explicitly that they will be reviewing their codes so that further improvements can be made in the light of customer opinion. I hope that the others will do the same. I believe these codes are an important step in improving the relationship between banks and their small business customers. But I hope that small businesses will also play their part in building and maintaining effective relationships with their bankers by discussing with them, in advance, any problems or opportunities they may foresee.