Follow through commitments

It said: “The banking sector reform proposals have the potential to help the quarter of small businesses still struggling to access affordable finance and we welcome support for those grappling with broadband access and looking to play their part in moving towards a low carbon economy - however, small firms must feel the benefit of these proposals rather than becoming victims of pre-election rivalry.

”Any changes in the governance of the finance sector must not be pure political rhetoric, but must translate into improvements in access to finance for small firms. Access to finance needs to be improved through more competition for small business banking on the high street and improving the availability of mortgages for the self-employed. The role of Regional Development Agencies and their devolved equivalents should be expanded to provide more flexible finance locally, while the Post Office Network should be turned into a Post Bank offering support for small firms by utilising the Post Office Network. The FSB has also called for the Chancellor to be creative when selling off parts of the nationalised banks of Lloyds Banking Group, RBS and Northern Rock by ensuring they can only be purchased by new entrants to the market and provide a greater focus on small business banking.

John Walker, national policy chairman, Federation of Small Businesses, said: "It has been a tough year for small businesses, with shoppers spending less, larger companies paying their small suppliers later and banks only just starting to lend again, although often at high rates.

"Many are starting to feel confident about their future prospects and it is important that any legislation in the next few months, particularly on the banking sector, helps to develop the good feeling rather than being used to divide up the political ground ahead of the General Election."