Banks should accept responsibility for mis-selling scandals in order to rebuild trust with small businesses, Labour MP Toby Perkins has said.
The shadow minister for small business said access to finance remained a major hurdle for independent firms.
While banks are working to address issues that led to mis-selling, they must acknowledge previous mistakes, Perkins said.
He said: “We had very little competition in a genuine way, and a culture in the banks that was all about short-term.
“Some of those cultural questions the banks are on the way to resolving. Part of that process of redemption is the banks owning up to what actually happened, and not making it difficult for people to get justice about wrongs in the past.”
Recent weeks have seen banks again come under fire for the treatment of small business customers. In October, the Competition and Markets Authority (CMA) criticised HSBC and Northern Ireland’s First Trust Bank for telling small business customers they must open a current account to qualify for a business loan.
The CMA subsequently announced a full competition inquiry into the dominance of Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland (RBS).
More than £1.5bn as been set aside for compensation over mis-sold interest rate hedging products (IRHP). The scandal cost Yorkshire Bank £250m in the six months to September 30.
Labour’s proposals for a regional bank network could “make a real difference” to small businesses, Perkins added.
Speaking at the launch of the Small Business Saturday national bus tour in Leeds, the Labour MP for Chesterfield said lowering business rates should be a government priority.
Small businesses are essential to a strong economy, providing jobs and retail diversity, Perkins said.
Perkins urged people to support initiatives like Small Business Saturday, which aims to promote independent firms.
He said: “The thing we can all do is just get out there and spend a bit of time every year to think, ‘am I shopping local?’”
“You get a more varied offer if you get off the beaten track.”