Britain’s banks will be hit by big fines if they fail to treat their customers fairly, under new measures to be announced today in the Queen’s Speech.

Steps to reform the financial sector and tackle the economic crisis are likely to form the core of the Queen's address to Parliament with ministers eager to make a voluntary code of banking practice legally binding.

The steps follow concerns that smaller businesses are being damaged by sharp practices from lenders, many of which are failing to observe their own guidelines by changing terms and conditions on loans with little or no notice, leaving borrowers short of cash.

Under a new system to be outlined by the Queen today, a new statutory banking code would be policed by the Financial Services Authority, the City regulator.

Companies which fail to adhere to the rules could be hit with unlimited fines — a sharp turnaround from the present system which merely “names and shames” banks which flout a set of guidelines that are not legally binding.

A host of other measures are likely to be included in the speech, including a clampdown on benefit fraud and efforts to get more people into work.

A new Marine Bill will also be proposed to pave the way for the development of more renewable energy schemes off Britain’s coasts, including wind and tidal power projects.

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