24 March 2000

Bank charges played down

ACCUSATIONS that banks are overcharging small businesses have been played down by farmers representatives.

Claims of excessive market power, notably among the big four banks, are contained in a report by Don Cruickshank, the Treasurys special banking investigator, released this week.

Despite it suggesting that customers are being overcharged by up to £5bn a year, many in farming believe banks are supporting the industry during a time of real crisis.

Reg Haydon, chairman of the Tenant Farmers Association, says: "I dont think it is a time to start knocking banks; they have stood with farmers so far (during the crisis) and many need their continuing support." His view is reiterated by the National Farmers Union.

Bankers have defended their position. John Page, head of Barclays Agricultural Banking, says it is a fiercely competitive market with little scope for overcharging. "Some farm clients are recording a third successive year of losses; we have not passed on the cost of that risk to customers."

But farmers should monitor bank charges closely. Steve Ellwood, head of agriculture at HSBC, says: "We track that sort of thing carefully and there is an extremely low incidence of overcharging, but criticism is not without substance. Mistakes occur."

Farmers should remember each account holder can negotiate terms, reminds accountant David Missen of Larking Gowen. "Dont assume you get the same deal; banks are in business themselves. But given the service they provide, the charges are fair." &#42