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10/03/2012 - Trebles all round for bankers while small firms go short of funding...

IT IS expected that Barclays bank will later this week announce bonuses for their top officials that will stir up again public anger over the amounts that leading banks chose to reward their top brass regardless, it would seem, of how things are in the real world.

The Sunday Times of 4 March 2012 sets out the kind of figures that leading bankers can expect to receive. Chief executive Bob Diamond is possibly going to receive a bonus of up to £3.4m on top of his £1.3m salary. In 2010 Diamond is estimated to have been paid a total of in the region of £6.7m while the heads of the bank’s investment banking divisions, Rich Ricci and Jerry del Missier, are reported as having possibly both earned more than £10m in the same period. More potentially bad publicity looms for Barclays as the Treasury is currently looking two of the bank’s ‘tax-planning schemes’ which exchequer secretary David Gauke has described as “aggressive avoidance to get an unfair advantage”.

So while the pay and bonus cash flows in the world of high finance, how are things for small businesses? Solidarity has previously reported on the problems that small businesses have experienced in getting the necessary credit from banks to expand or even to just stay afloat in these troubled times. Have things improved any as the banks allegedly start to recover from the devastating events of 2008? In a short but very illuminating article in the Daily Mail of 24 February 2012 the continuing hurdles faced by small businesses in getting loans are set out. Regional agents of the Bank of England are quoted as finding: “Smaller firms continued to report that credit conditions were tight, with persistent pressure from banks to commit to asset-backed forms of lending rather than overdrafts”. Small business groups have highlighted cases where credit worthy small businesses have faced demands from banks that their owners put up their homes as security for loans and the Federation of Small Businesses says that even where loans are offered they are sometimes turned down because the banks are looking for 10% or more in interest. With the base rate currently at 0.5%, Solidarity cannot describe charging 10% and above on loans as anything else but blatant usury of the worst kind by the banks.

The coalition government has made a lot of talk of supporting the small business sector and of “re-balancing” the economy with the revival of the UK’s devastated manufacturing industries. It is time for them to back their words with action by unblocking the flow of credit to business and ensuring that the banks, especially the ones bailed-out with taxpayers’ money, treat small businesses fairly.

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