The Federation of Master Builders (FMB) has supported calls from the Chancellor and the Treasury Select Committee for the banks to increase support for small businesses as news emerges that Britain's five biggest banks are back in profit.

Brian Berry, Director of External Affairs at the FMB said: "The Government is right to be warning the banks that businesses must be allowed to borrow money. Without this funding the banks are delaying the economic recovery and putting more jobs at risk. Small businesses need access to credit on reasonable terms and unless the banks are prepared to act responsibly the Government must take direct action to force them."

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According to the FMB small construction companies are still struggling to survive in the current economic climate in which one late payment from a customer may cause a cash flow crisis that can send a firm to the wall if the bank withdraws its support.

Mr Berry continued: "Many firms are unable to secure loans or even retain their existing overdrafts, and as a result many are going out of business which is pushing up unemployment in the building sector. It is totally unacceptable for banks to be charging higher rates to small businesses and jeopardizing their futures, in order to fund the return to bonus bonanzas for banks."

(CD)