Business lobby group The Federation of Small Businesses (FSB) has condemned the Competition Commission, after it decided to lift price controls on Britain’s four largest banks servicing small businesses.
The rules, imposed after an investigation in 2002, meant that banks had to offer free money transmission services or an interest rate of at least 2.5% below base.
However, the Commission said the measures had always been temporary, designed to last until behavioural undertakings put in place to make the market more competitive had time to take effect.
Christopher Clarke, the Commission’s deputy chairman, said: “We remain convinced that competition in this market is best served by continuing to improve customers’ awareness of the banks’ individual offers and their ability to switch providers.
“We think that the price controls are no longer necessary and that the remaining competition issues are best addressed by the behavioural undertakings that remain in place.”
However, the FSB heavily criticised the move, claiming it did not meet the needs of small businesses.
Mike Cherry, the FSB’s financial affairs chairman, urged the Commission to review the decision.
He said: “This has been a tumultuous year for small businesses and this is the latest in a long line of body blows.
“It is clear to see that the Commission has been deaf to the actual experiences of small businesses, while the big banks have been dumb in offering those options that had been agreed.
“To take this away now is a travesty,” he added.
© Crimson Business Ltd. 2007
