Banks must aid small players

The UK government has helped bail out the banks and now it is the duty of our once-great British institutions to pass on this help to millions of small commercial businesses.

Chancellor Alistair Darling said on 30 October that banks should use a £4bn package of support from the European Investment Bank to help small-to-medium sized firms through the credit crunch: "I really do think it is important that British banks play their part. We, on behalf of the taxpayer, have a put a lot of money into the banking system and we recognise its importance.

"They, in turn, have to recognise the importance, not just to the country but to banks themselves, in ensuring that small and medium-sized enterprises get the support they need."

This is a polite way of giving the banks a kick up the backside and shows that government patience with the banks is running out. There have been far too many media stories of companies being poorly treated by the banks when trying to extend even modest credit facilities.

It is in the banks' long-term interests to help British business and keep employment levels high and they should not be waiting for interest rates to fall before helping. The small business community employs more than 10 million of our workforce whose taxes have gone towards the bailout, while everyday, tens of businesses are being faced with the harsh reality of closing their doors.

Having contributed so significantly to an unsustainable boom, banks must act now to help keep a recession at bay that is likely to be highly protracted: they have the opportunity to payback some of their wrongs.

With RSA warning that 11% of small business owners (those with turnovers of less than £1m) can no longer afford to operate due to the decision of banks to cut funding and rising costs, now is the time for action before it is too late.