Fairer deal for small firms

TRADE Secretary Patricia Hewitt is shortly to announce an overhaul of big banks' dealings with small businesses and a new code of practice to ensure a fairer deal for small firms.

The code, being drafted by the British Bankers' Association, aims to make it easier to switch accounts and to make charges more transparent.

Other key proposals include informing customers when interest rates are changed, sympathetic treatment of those who fall into arrears, and new complaints procedures. The code, due to take effect at the end of March, is modelled on that already in force for personal customers.

Hewitt has been considering a report from the Competition Commission. Its recommendations follow a probe completed two years ago into big banks' behaviour by Don Cruickshank, now Stock Exchange chairman.

The clampdown on the banks is expected to be much milder than their worst fears, which included the forced disposal of some branches, limits on the prices they could charge, and a windfall tax.