Download FSB calls for moratorium on interest rate swap repayments and

FEDERATION of SMALL BUSINESSES
Focus on small business in Kent and Medway
FSB calls for moratorium on interest rate swap repayments
and questions whether big banks’ culture will ever change
The FSB welcomes the FSA’s ruling that
Interest Rate Swap Agreements (IRSAs)
were mis-sold to small businesses. But
in addition to the moratorium imposed
on the sale of these swaps, the FSB
also wants an immediate suspension of
repayments on these products.
The FSA and the Financial Conduct
Authority must also now carry out a
thorough market review to establish
how the market should operate - if at
all - for small businesses. It must also
review the level of protection small firms
are afforded under regulation as well as
investigate whether other banks, other
than the big four, have been involved in
mis-selling interest rate swaps.
Suspending repayments immediately
would relieve and possibly rescue small
firms that have been burdened with
huge bills – in most cases for years.
However, it will not resurrect the many
small businesses that have already been
destroyed by this appalling breach of
trust: firms that turned to their banks
for support and who were instead
exploited.
Britain’s hope of escaping recession
relies largely on the optimism and
entrepreneurial spirit of its small firms,
who collectively produce more than half
the country’s GDP. But that optimism is
being shattered by the ever-lengthening
series of scandals emerging from the
banks they have been forced to deal
with through lack of competition and
regulation.
At what point will big banks’ chief
executives take responsibility for the
litany of scandals their employees
have been found guilty of and which
are causing untold damage to small
businesses and Britain’s economy?
It is not enough that the guilty banks
should simply be forced to repay the
money they tricked out of their small
business customers. The situation will
not improve until and unless punitive
measures are taken to stamp out these
sharp practices and the fundamental
attitude of the banks towards their small
business customers changes. The top
managers of these huge institutions
must be held accountable.
The scale of the mis-selling scandal is
still not clear. Too many affected firms
have still not come forward and live in
fear that if they speak out, their loans
will be foreclosed and their banks will
force them out of businesses. This
ruling by the FSA should give them the
confidence to step forward and they
must now do so.”
FSB London calls on London Councils to fight
for a “2012 Business Fund” to help businesses
adversely affected by The London 2012 Games
The FSB is calling on London Councils to
argue for a 5% chunk of the £500million
under spend from the Olympics budget
to assist small businesses that will be
adversely affected.
Recent FSB survey work showed that
38 per cent of businesses felt that
the London 2012 Games would have
a negative effect on their business –
compared to 13 per cent who feel it will
bring a positive effect.
With many businesses saying that
transport and parking restrictions will
have a detrimental effect, the FSB is
urging local councils, through the over
arching body, London Councils, to
champion small businesses who are
potential losers from the Games.
The FSB is calling for a ‘2012 business
fund’ to be administered by the Boroughs
and the Greater London Authority, similar
to the High Street Fund which supported
many businesses in the aftermath of the
London Riots.
Sue Terpilowski, Greater London
Policy Chairman, Federation of Small
businesses, said: “London Councils
should support the drive to access
£25million of the £500million under
spend as the transport restrictions,
deemed necessary by LOCOG, are out
of the control of business. What we
don’t want to see is businesses struggling
to survive as a result of loss of trade.”
“Some local councils have offered
business rate discounts to businesses
which is welcome. However we should
and must go further. We believe that
a significant amount of businesses,
particularly those situated within or on
the cusp of the Olympic Boroughs, could
lose a significant amount of passing
trade. These are the businesses that
need to be properly compensated if they
can prove that their profits have been
damaged as a result of the 2012 Games.”
If that is the case then it seems obvious
that we should be developing some form
of class action here in Kent. The FSB has
already highlighted the problems of the
West Kingsdown businesses as their
businesses will be “fenced in” with the
closure of the A21 for several days outside
Brands Hatch for the Paralympics. The
fact that neither KCC or Sevenoaks
District Council approached the matter
in a conciliatory matter from the outset
has demonstrated a fundamental lack of
understanding of the impact on those
businesses by the road closure, and a
failing in the duty of care for those that
they have been elected to represent.
A Kent hotel company operating hotels
in Folkestone and Canterbury bought
two Interest Rate Swap Agreements
(IRSA) from Barclays Capital in 2007-08.
Since the BASE rates fell below 3.25%,
they have penalised with these IRSA and
have been paying a “kicker rate” which
currently amounts to over £700,000.
As a right of membership,
FSB members have access to the
following services:
So fundamentally it’s about trust. Trust
of an organisation that hitherto we have
been virtually obliged to work with.
New solutions are perhaps coming
forward, but there needs to be a huge
shift in approach to the whole concept
of how a finance institution perceives,
measures and handles the risk coupled
with some healthy alternatives creating
a genuinely competitive market.
FSB Legal Protection Scheme
Insurance for legal and professional
fees, plus legal and taxation advice.
Roger House
Kent and Medway Regional Chairman
Quantitive Easing
FSB comment
The point of quantitative
easing is to get more money to
businesses so they can invest
and grow. But it is clear this
money isn’t getting through. The
banks say there is insufficient
demand for loans. However,
that is completely at odds with
our own research showing fourin-10 small firms are refused
credit. We hope the recently
announced ‘funding for lending’
proposals will finally mean
that more of this money starts
to filter through into the real
economy so that the small
firms wanting to grow can get
hold of it. As always, the key is
implementation and until then
the jury’s out. We therefore
await for details on those
proposals.
FSB Focus on the Rural Economy
The FSB issued a national report earlier this year as part of its sector focus studies.
While rural businesses already make
a significant contribution to the GDP,
there is significant untapped potential
to generate economic growth and
employment. This potential is untapped
as a result of the unique barriers faced
by firms in rural locations.
Rural businesses are very often based
at a considerable distance from the
markets they serve. If we are to reduce
the effect of this barrier by providing
efficient transport links, putting in place
a fast and efficient digital infrastructure
and deploying effective policies for
growth, we can unlock the huge
potential rural economies have to offer.
Government needs to put in place
policies that ensures rural firms are
FSB Kent
and Medway
Region
Contact:
Allington Library
Castle Road
Allington
Maidstone
ME16 OPZ
Tele: 0845 463 5315
Fax: 01622 761126
Email: [email protected]
Web: www.fsb.org.uk/151
served by their local authorities.
This includes local authorities being
innovative and flexible for example
in the promotion of the benefits of
farm diversification and tourism. It is
also crucial for both central and local
government to finally deliver a planning
system that is responsible to small
businesses’ needs and allow them to
play their part in creating vibrant rural
communities.
While planning reform is vital, the
report recently published by the FSB
looks at how we might address the
key barrier of distance to market. It
examines the ways in which we by
improving transport links and providing
adequate digital infrastructure, we can
realise the true potential of the rural
economy.
THE KEY RECOMMENDATIONS INCLUDE
1. CREATING SUCCESSFUL RURAL ECONOMIES
•C
OMMUNITY SERVICES: Recognising
the value of the Post Office Network in
supporting businesses and communities.
The FSB calls for the publication of a
credible plan that creates a sustainable
model and protects the current size of the
network. We believe the creation of a post
Office Bank is one solution.
• The FSB also calls for full national public
consultation before Post Office Ltd
proceeds with the proposed rollout of the
Locals model.
• RURAL RATE RELIEF: The Department
for Communities and Local Government
should encourage local authorities to make
greater use of the discretionary element of
rural rate relief.
• Local authorities need to be placed under a
duty to identify eligible small businesses, to
make this fully automatic and ensure all are
awarded Small Business rate relief (SBRR).
• Councils should make greater use of the
wide range of reliefs they are able to offer
to small rural firms.
•T
OURISM: Given the inclusion of aviation
into the EU’s Emission Trading Scheme,
consideration should be given to a
reduction or removal of air passenger Duty
to encourage more international tourists to
these shores.
• Local authorities should dedicate resources
to stimulate business growth in local rural
economies by taking advantage of the
forthcoming localisation of business rates
review.
• F ARM DIVERSIFICATION: Local authorities
should provide tailored guidance on
appropriate types of farm diversification
suitable for their localities and what farmers
need to do to give them the best chance of
submitting a successful planning application.
•T
here should be an assumption in favour
of permitted development for small
agricultural buildings and larger agricultural
buildings should be subject to prior
notification rather than full planning control.
2. ENCOURAGING SUSTAINABLE
DEVELOPMENT
• The development of local plans by councils
must reflect the positive stance, of the
National Planning Policy Framework
towards business growth in rural areas.
• Local authorities should ensure the
sequential test is not applied to small scale
rural development applications.
• Local authorities should only require
proportionate information in support of
planning applications, provide jargon free
guidance to applicants and adopt a ‘projobs’ approach.
• Local authorities should ensure local
business communities have a key role
KEY BENEFITS OF
FSB MEMBERSHIP
in neighbourhood planning, and that
their needs are fully reflected in local
development policies.
• Government and local councils should
quickly implement the key recommendations
of the Portas review in local high streets,
such as making local parking policies more
reflective to the needs of shoppers, to
ensure our market towns and villages remain
vibrant, viable business communities.
• Local Enterprise Partnerships (LEPs) should
work strategically together.
• Local authorities and LEPs should
undertake a strategic review of redundant
building stock within their areas in order to
promote adaptive re-use of such premises
for business or residential purposes.
• Government should be proactive in
promoting the ‘Home on the farm’ scheme
across England.
3.IMPROVING ACCESS TO MARKETS
• ROADS: The Government, The Highways
Agency and the local authorities must
recognise the damage that poor road
infrastructure creates on businesses and
the economy as a whole and commit to
more investment in the repair, maintenance
and upgrading of UK roads.
• Government should re-examine its decision
not to legislate for local authorities to
have the ability to introduce mandatory,
competitively priced, bus-only multioperator ticketing schemes for bus services.
• After 24 months the Government should
review whether its response to the
Competition Commission’s report on local
bus services has delivered the changes
needed to improve rural bus networks.
• The FSB calls for the delivery of high speed
broadband (20Mbps) to 98% of the rural
economies by 2015.
• Government should urgently proceed with
the spectrum auction to allow small rural
businesses to benefit from a full range of
4G services.
FSB Care
Exclusive member benefits for serious
health conditions.
FSB Business Banking
Exclusive free business banking
designed for small businesses offering
a number of unique features.
FSB Merchant Service
Exclusive card acceptance service
available to FSB members at
competitive, discounted rates.
FSB Insurance Service
Hassle-free insurance and advice.
FSB Telecom
Significant savings on fixed and
mobile call charges.
FSB Diamond Account
7 day notice business deposit
account. The interest rate tracks
Base Rate. A great alternative to your
current account.
FSB Factors
Perferential rates on business
factoring for FSB members.
FSB Independent Financial Services
Personal financial planning, life
insurance, group pensions and more.
FSB Medical
Private medical care, travel, personal
accident, dental, income and cash
plan for FSB members. Also Vehicle
Breakdown Recovery Club for cars,
vans, taxis and motorcycles.
FSB Credit Card
Platinum card specially designed for
FSB members.
FSB Finance for Business
Individually tailored finance to meet
the needs of small businesses.
FSB Fuel Card
Accurate fuel management and
control with FSB discounted fuel card.
FSB Online Directory
Promote your business, access new
customer, search for products and
services, easily update your details.
FSB Supporting Services:
FSB Mobile Card Payment
Terminals
Fully managed solution to merchants
requiring Mobile Electronic Point of
Sale (MEPOS) on a short, mid or long
term basis or purchase.
HOW TO JOIN?
www.fsb.org.uk/info
Call 0808 2020 888