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MPs have raised concerns over the treatment of small businesses by major banks after figures showed more than 140,000 accounts were shut down by lenders over the past year.

As part of an inquiry into access to finance, the Treasury Committee gathered information from eight banks, including the so-called big four, on how many business accounts had been shut down.

The data showed that out of about 5.3 million accounts held by small and medium-sized enterprises (SMEs), 141,620 were forcibly closed by banks – 2.7% of the total.

The banks – Barclays, HSBC, TSB, Lloyds, Santander, NatWest, Metro Bank and Handelsbanken – gave a variety of reasons.

Lloyds and NatWest were among those who cited concerns about financial crime and fraud while HSBC UK said that about two thirds of the more than 26,000 accounts it closed in the 12 months to the end of October were related to customers’ “financial viability”, or the accounts being dormant.

But the committee said it was concerned that banks were giving a range of reasons for readily closing down business accounts with little or no notice.

It highlighted that just three banks blamed “risk appetite” as a reason behind forced closures, with about 4,200 cases listed.

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Committee chair Harriett Baldwin said: “The fact that only three lenders included ‘risk appetite’ in their criteria indicates these discussions may not be systematically recorded – leaving questions over whether decisions on the debanking of certain businesses, based on what banks perceive as a risk, are happening informally.”

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Harriett Baldwin. File pic

“We can see from these figures that thousands of small businesses fall foul of their bank’s risk appetite definition, leaving them without access to a bank account.

“I hope publishing this data can aid scrutiny of the decisions taken by banks and help to ensure legitimate businesses are not being unfairly treated.”

Martin McTague, national chair of the Federation of Small Businesses responded: “The number of small firms affected by debanking is high, and underlines the need for the FCA to shed light on this issue, by requiring banks to publish quarterly statistics.

“These should include the reasons for the bank’s decision to close an account, and demographic information on affected businesses, to keep tabs on whether certain groups are being disproportionately affected.

“Having your bank account closed suddenly – with little to no notice – is immensely disruptive to a small firm. You can’t pay staff or suppliers, while incoming funds will be delayed, putting pressure on cashflow and your ability to continue trading at all.

“Where possible, banks should give a reasonable amount of notice that they intend to close an account, and should share the reasons behind the decision, in case there has been a misunderstanding which the customer can clear up.”

The figures were published by the committee ahead of evidence, due later today, from Economic Secretary to the Treasury Bim Afolami.

He is expected to face questions on whether small businesses are being treated fairly by banks.

A separate report by the All-Party Parliamentary Group on Fair Business Banking, released recently, cast doubts on whether banks could be wrongly labelling customer accounts as a fraud risk to cover up concerns about costs and their reputation.

It found banks are more driven by profit and reputation, rather than tackling financial crime, when they decide to debank a customer.

The scrutiny by MPs is taking place against a backdrop of wider concern over the treatment of individuals.

The issue shot to prominence through the Nigel Farage debanking row last year that, ultimately, cost the the-then NatWest chief executive her job.

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November: Farage to seek millions in damages

A spokeswoman for the FCA said earlier this month: “Under the law, banks and building societies can make commercial decisions about which customers they serve.

“We have said before that it might be time to look at whether all individuals, businesses and organisations should have the right to an account but it would be for the government and parliament to legislate for that.

“Within our remit, we are clear that banks should treat individual customers fairly and act proportionately to tackle financial crime. If we find firms are not doing that, we will act.”

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Gail’s backer plots rare move with bid for steak chain Flat Iron

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Gail's backer plots rare move with bid for steak chain Flat Iron

A backer of Gail’s bakeries is in advanced talks to acquire Flat Iron, one of Britain’s fastest-growing steak restaurant chains.

Sky News has learnt that McWin Capital Partners, which specialises in investments across the “food ecosystem”, has teamed up with TriSpan, another private equity investor, to buy a large stake in Flat Iron.

Restaurant industry sources said McWin would probably take the largest economic interest in Flat Iron if the deal completes.

They added that the two buyers were in exclusive discussions, with a deal possible in approximately a month’s time.

The valuation attached to Flat Iron was unclear on Sunday.

Flat Iron launched in 2012 in London’s Shoreditch and now has roughly 20 sites open.

The chain is solidly profitable, with its latest accounts showing underlying profits of £5.7m in the year to the end of August.

It already has private equity backing in the form of Piper, a leading investor in consumer brands, which injected £10m into the business in 2017.

Flat Iron was founded by Charlie Carroll, who retains an interest in it, but the company is now run by former Byron restaurant boss Tom Byng.

Houlihan Lokey, the investment bank, has been advising Flat Iron on the process.

McWin has reportedly been in talks to take full control of Gail’s while TriSpan’s portfolio has included restaurant operators such as the Vietnamese chain Pho and Rosa’s, a Thai food chain.

A spokesman for McWin declined to comment.

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AA owners line up banks to steer path towards £4.5bn exit

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AA owners line up banks to steer path towards £4.5bn exit

The owners of the AA, Britain’s biggest breakdown recovery service, are lining up bankers to steer a path towards a sale or stock market listing next year which could value the company at well over £4bn.

Sky News has learnt that JP Morgan and Rothschild are in pole position to be appointed to conduct a review of the AA’s strategic options following a recovery in its financial and operating performance.

The AA, which has more than 16 million customers, including 3.3 million individual members, is jointly owned by three private equity firms: Towerbrook Capital Partners, Warburg Pincus and Stonepeak.

Insiders said this weekend that any form of corporate transaction involving the AA was not imminent or likely to take place for at least 12 months.

They added that there was no fixed timetable and that a deal might not take place until after 2026.

Nevertheless, the impending appointment of advisers underlines the renewed confidence its shareholders now have in its prospects, with the business having recorded four consecutive years of customer, revenue and earnings growth.

A strategic review of the AA’s options is likely to encompass an outright sale, listing on the public markets or the disposal of a further minority stake.

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Stonepeak invested £450m into the company in a combination of common and preferred equity, in a transaction which completed in July last year.

That deal was undertaken at an enterprise valuation – comprising the AA’s equity and debt – of approximately £4bn, the shareholders said at the time.

Given the company’s growth and the valuation at which Stonepeak invested, any future transaction would be unlikely to take place with a price of less than £4.5bn, according to bankers.

The AA, which has a large insurance division as well as its roadside recovery operations, remains weighed down by a substantial – albeit declining – debt burden.

Its most recent set of financial results disclosed that it had £1.9bn of net debt, which it is gradually paying down as profitability improves.

AA owners over the years

The company has been through a succession of owners during the last 25 years.

In 1999, it was bought by Centrica, the owner of British Gas, for £1.1bn.

It was then sold five years later to CVC Capital Partners and Permira, two buyout firms, for £1.75bn, and sat under the corporate umbrella Acromas alongside Saga for a decade.

The AA listed on the London Stock Exchange in 2014, but its shares endured a miserable run, being taken private nearly seven years later at little more than 15% of its value on flotation.

Under the ownership of Towerbrook and Warburg Pincus, the company embarked on a long-term transformation plan, recruiting a new leadership team in the form of chairman Rick Haythornthwaite – who also chairs NatWest Group – and chief executive Jakob Pfaudler.

For many years, the AA styled itself as “Britain’s fourth emergency service”, competing with fierce rival the RAC for market share in the breakdown recovery sector.

Founded in 1905 by a quartet of driving enthusiasts, the AA passed 100,000 members in 1934, before reaching the one million mark in 1950.

Last year, it attended 3.5 million breakdowns on Britain’s roads, with 2,700 patrols wearing its uniform.

The company also operates the largest driving school business in the UK under the AA and BSM brands.

In the past, it has explored a sale of its insurance arm, which also has millions of customers, at various points but is not actively doing so now.

By recruiting a third major shareholder last, the AA mirrored a deal struck in 2021 by the RAC.

The RAC’s then owners – CVC Capital Partners and the Singaporean state fund GIC – brought the technology-focused private equity firm, Silver Lake, in as another major investor.

A spokesman for the AA declined to comment on Saturday.

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US-EU trade war fears reignite as Europe strikes back at Trump’s threat

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US-EU trade war fears reignite as Europe strikes back at Trump's threat

Fears of a US-EU trade war have been reignited after Europe refused to back down in the face of fresh threats from Donald Trump.

The word tariff has dominated much of the US president’s second term, and he has repeatedly and freely threatened countries with them.

Money blog: Trump sends message to UK on energy bills

This included the so-called “liberation day” last month, where he unleashed tariffs on many of his trade partners.

On Friday, after a period of relative calm which has included striking a deal with the UK, he threatened to impose a 50% tariff on the EU after claiming trade talks with Brussels were “going nowhere”.

The US president has repeatedly taken issue with the EU, going as far as to claim it was created to rip the US off.

However, in the face of the latest hostile rhetoric from Mr Trump’s social media account, the European Commission – which oversees trade for the 27-country bloc – has refused to back down.

EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.

“We stand ready to defend our interests.”

President Donald Trump speaks to reporters after signing executive orders regarding nuclear energy in the Oval Office of the White House, Friday, May 23, 2025, in Washington, as Commerce Secretary Howard Lutnick and Defense Secretary Pete Hegseth listen. (AP Photo/Evan Vucci)
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Donald Trump speaks to reporters in the Oval Office on Friday

Fellow EU leaders and ministers have also held the line after Mr Trump’s comments.

Polish deputy economy minister Michal Baranowski said the tariffs appeared to be a negotiating ploy, with Dutch deputy prime minister Dick Schoof said tariffs “can go up and down”.

French trade minister Laurent Saint-Martin said the latest threats did nothing to help trade talks.

He stressed “de-escalation” was one of the EU’s main aims but warned: “We are ready to respond.”

Mr Sefcovic spoke with US trade representative Jamieson Greer and commerce secretary Howard Lutnick after Mr Trump’s comments.

Mr Trump has previously backed down on a tit-for-tat trade war with China, which saw tariffs soar above 100%.

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US and China end trade war

Sticking points

Talks between the US and EU have stumbled.

In the past week, Washington sent a list of demands to Brussels – including adopting US food safety standards and removing national digital services taxes, people familiar with the talks told Reuters news agency.

In response, the EU reportedly offered a mutually beneficial deal that could include the bloc potentially buying more liquefied natural gas and soybeans from the US, as well as cooperation on issues such as steel overcapacity, which both sides blame on China.

Stocks tumble as Trump grumbles

Major stock indices tumbled after Mr Trump’s comments, which came as he also threatened to slap US tech giant Apple with a 25% tariff.

The president is adamant that he wants the company’s iPhones to be built in America.

The vast majority of its phones are made in China, and the company has also shifted some production to India.

Shares of Apple ended 3% lower and the dollar sank 1% versus the Japanese yen and the euro rose 0.8% against the dollar.

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