Britain’s banks have been urged to lend more money to small businesses to help them see out the recession. In a recent meeting with bank chiefs, chancellor Alistair Darling said he was “extremely concerned” by the rate and costs of small business lending.

“We did not stabilise the banking system, rescue some banks out of some sort of charitable act or because we felt sorry for the banks,” he said. “Far from it. We did it because if you don’t have a banking system that provides credit for businesses, then you will make recovery and prosperity much more difficult.”

The government is now calling on the banks to free up credit to small businesses, a move which has been welcomed by the ACS. 

Chief executive James Lowman said: “We want to see those who want to invest being supported, and banks supporting retailers in managing cash flow, and we will continue to press government for this support.”

The meeting came in the same week that a survey by the British Retail Consortium (BRC) revealed a third of small and medium-sized retailers had experienced a reduction in bank lending in the last three months. 

The fall in lending had forced more than 60% of retailers to reduce staff levels, and undermined their ability to trade, the survey found.