The FPB has stressed the need for smaller companies to shop around for the best deal following the announcement of plans by the Competition Commission to lift price controls on the UK's four largest banks.

Matt Hardman, the FPB's Campaigns Manager, said: "It's inconsistent for business groups that campaign against regulation and believe in competition to support price controls. Our aim is to make competition work and encourage smaller businesses to negotiate with their banks, shop around for the best service, and change banks if they are not satisfied."

Mr Hardman said that the FPB commissioned a biennial survey of the major banks' performances from Nottingham University.

"The survey, released in the autumn last year, showed clear evidence of a general improvement in the banks' performances as experienced by smaller businesses. The performance index shows the highest level since 1998."

"While slightly more smaller businesses considered switching banks, the report suggested this was because of a change in attitude, due to measures taken by the Office of Fair Trading (OFT)."

The survey covered 3,700 firms, and explored attitudes to 7 major banks, including the ‘big four' covered by the price controls: HSBC, Barclays, LloydsTSB and the Royal Bank of Scotland. Of these 'Big Four' banks, Barclays had the highest percententage of respondents not considering changing banks (almost 70%), while LloydsTSB had the lowest (about 55%).

However, the survey found that the taking of personal collateral for loans at the levels often required was still a fundamental issue for smaller businesses. Mr Hardman added: "We will continue to monitor the performances of the major banks through our biennial survey and our many contacts with our members. The big four are said to have a market share of 85%; it's important that they do not abuse their dominant position."