Robert Jenkins, of the Bank of England’s financial policy committee believes cutting bank bonuses by £1 billion will generate £20 billion for SMEs.

Robert Jenkins, of the Bank of England’s financial policy committee believes cutting bank bonuses by £1 billion will generate £20 billion for SMEs.

Jenkins told parliament: ‘Every billion less on bonuses would support £20 billion of additional small to medium business lending.’

Federation of Small Business chairman John Walker says bankers have ‘grown richer on the money that could and should have been lent to UK plc.’

Walker adds: ‘We know if the banks had limited bonuses to pre-crisis levels they could have generated over £50 billion of additional capital to lend to SMEs.’

However, Mike Conroy, HSBC’s head of market insight and planning believes the media exaggerates problems faced by SMEs securing finance.

He says: ‘Here at HSBC we are approving 80 per cent of all applications.

‘If you look at the independent SME finance monitor it shows that there is a proportion of business owners who feel put off by the media and believe banks won’t lend so don’t ask.’

Chilton Taylor, Baker Tilly’s head of capital markets thinks over-the-top bonuses and the resulting lack of lending to SMEs, have left a hole for venture capitalists to exploit.

He says: ‘Because the banks are failing to provide finance at sufficient levels there will be more demand from equity markets.

‘Venture capital trusts are now able to choose between a wider range of SME investments than ever before.’