Financial regulation is neededSo, it’s time the Government acted and introduced meaningful regulation, which in turn will encourage more SMEs to access the funding necessary to expand – bringing with it the economic prosperity this country so desperately needs. Because, just at the moment, the signs don’t look so rosy. “The Government has already tried to head off the committee’s recommendation to create an independent tribunal system to protect those SMEs involved in disputes with financial services firms.” It would rather create a voluntary ombudsman scheme to address complaints from those SMEs with an annual turnover of up to £10m. The Government’s argument is that it “doesn’t believe there is a clear enough case for bringing SME lending into regulation” and the financial services industry has “changed significantly” over the last decade. Well, that ‘aint anywhere near good enough.
Does the government care about SMEs?I’d say the Government is running scared of the big financial institutions and surely it was the very lack of regulation and oversight that ended with some of those institutions coming cap in hand to the taxpayer for a massive bail-out. Regulation is desperately needed so SMEs have the confidence to access funding without the fear that the previous “widespread and systematic” mistreatment of customers never happens again.
“I’d like to remind the Government that, at the beginning of last year, small businesses accounted for 99.3 percent of all private sector businesses and SMEs employed a total of 16.3 million people – 60 per cent of the UK’s private sector employment.”More importantly, according to the Federation of Small Businesses, the combined annual turnover of SMEs was £2 trillion. As John Major would say a not inconsiderable amount. The best line to emerge from this whole sorry exercise in booting this vitally important issue into the long grass comes from Nikki Turner, director of campaign group, SME Alliance. Referring to the fictional ‘Silence of the Lambs’ character, she said: “The idea that because banks are not behaving as badly as they did a decade ago, it’s all OK, is like inviting Hannibal Lecter to dinner because he hasn’t killed anyone recently.” Let’s hope the Government doesn’t allow any more financial institutions to feast upon our unprotected SMEs – complete with fava beans and nice Chianti…
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