by business editor Trevor Sturgess

tsturgess@thekmgroup.co.uk

Small firms have welcomed plans to ring-fence retail from "casino" banking operations, claiming they would promote safer banks and more competition.

Sir John Vickers, chairman of the Independent Commission on Banking, published his final report this morning.

By separating retail from investment activities, it aims to protect account holders from a future banking meltdown, and taxpayers from bailing out failing banks, as they did with RBS, Lloyds Banking Group and Northern Rock.

Roger House, chairman of the Federation of Small Businesses for Kent and Medway, said: "If fully implemented, not only will it make the sector safer for both businesses and current account holders, but it will also help to improve competition – something which the sector so badly needs."

The report recommends easier account switching to cut the time and cost which has put off many businesses moving.

Mr House said: "A slow and complicated switching process is an uncompetitive aspect of UK banking.

"Moving banks should be as easy as it is to move gas or electricity, without having any disruption to the service offered.

"These proposals will help make it easier so that small firms have the confidence to move between banks to get a better deal."

The CBI, the employers lobby group, warned that the UK was going it alone with ring-fencing and it could damage business and threaten growth.

Consumer watchdog Which? said: "Consumers can't afford to bail out the banks again and they don’t trust bankers to change their behaviour."

The Chancellor has promised to act on Vickers' recommendations but they are unlikely to come into force until 2019.

Banks oppose the plans, warning that they will raise costs – estimated by Vickers at up to £7bn - to customers.