18/01/2018

0:00:00 > 0:00:03colleagues for the report.Thank you. We now come to backbench

0:00:03 > 0:00:10business. Before we begin today's debates, I should point out to the

0:00:10 > 0:00:14house though it is obvious that a great many people wish to speak this

0:00:14 > 0:00:20afternoon and we obviously have limited time, just under five hours

0:00:20 > 0:00:27for two important and heavily subscribed debates. Sometimes on

0:00:27 > 0:00:33Thursdays we are a little bit lenient with time, but the

0:00:33 > 0:00:36recommendation from the backbench business committee is that the

0:00:36 > 0:00:43person moving a motion should take around 15 minutes of the house's

0:00:43 > 0:00:48time. Over the last few weeks that has risen to well over half an hour,

0:00:48 > 0:00:58but today I am going to enforce the 15 minutes or thereabouts limit.

0:00:58 > 0:01:03That means about 17 minutes, not 27. I should also warned the house that

0:01:03 > 0:01:11there will be after the motion has been moved, there will be a limit on

0:01:11 > 0:01:15backbench speeches initially of five minutes, but that is likely to fall

0:01:15 > 0:01:22to four minutes. This is good. It is because there is so much interest in

0:01:22 > 0:01:28the subjects that we are debating this afternoon. The first motion

0:01:28 > 0:01:33from the backbench business committee is on the treatment of

0:01:33 > 0:01:36SMEs by RBS global restructuring group and I am pleased to call Clive

0:01:36 > 0:01:43Lewis to move the motion.Thank you. Can I just echoed your comments

0:01:43 > 0:01:50there, as generous soul as I am when it comes the interventions, I will

0:01:50 > 0:01:56limit the number I take to maybe two or three if at all possible because

0:01:56 > 0:02:02I do understand that the Holocaust memorial debate afterwards is

0:02:02 > 0:02:05critically important but I think everyone would want to see debated

0:02:05 > 0:02:09fully. Nonetheless, there are a lot of members here on both sides about

0:02:09 > 0:02:13that want to speak about an issue that is clearly something that has

0:02:13 > 0:02:17affected very deeply their constituents and small businesses

0:02:17 > 0:02:20across the country. I would like to thank the honourable members of the

0:02:20 > 0:02:26size for their support for this very important debate today, as well as

0:02:26 > 0:02:30the backbench committee for allowing the time and particularly its chair,

0:02:30 > 0:02:34the member for give Ted, who has made it quite clear to me and others

0:02:34 > 0:02:41that he was very keen for this take place and here it is. As the details

0:02:41 > 0:02:44of the various scandals that have hit our financial services sector

0:02:44 > 0:02:48have trickled out over the last year's, I think we all started by

0:02:48 > 0:02:53treating the stories we heard with a certain level of scepticism. It just

0:02:53 > 0:02:58did not seem to make sense. When I read letters from one of Mike

0:02:58 > 0:03:02constituents, my first reaction was the story he was telling simply

0:03:02 > 0:03:12could not be true. No bank could have dared to have behaved in such

0:03:12 > 0:03:15an egregious way. My constituent was forced by RBS was forced to buy an

0:03:15 > 0:03:24interest rate hedging product. RBS is then placed the business into its

0:03:24 > 0:03:35global restructuring group. He lost his business, his home, his marriage

0:03:35 > 0:03:39and I think it fair to say almost his sanity. His crime nothing more

0:03:39 > 0:03:47than being an entrepreneur who banked with RBS.Did I thank my

0:03:47 > 0:03:52honourable friend but giving way. Does he agree with me that the RBS

0:03:52 > 0:03:56global restructuring group had real cultural problems. When their top

0:03:56 > 0:04:01tips include the phrase rope, sometimes you just have to let

0:04:01 > 0:04:05customers hang themselves, there is clearly something very wrong

0:04:05 > 0:04:17occurring.I agree. Since 2008, we note that 16,000 small businesses

0:04:17 > 0:04:23were put into GR G and the vast majority of them were liquidated. I

0:04:23 > 0:04:27think that helped you all you need to know. This was meant to be is

0:04:27 > 0:04:30somewhere where they were put back to try to get them into a situation

0:04:30 > 0:04:34where they can come back as a viable business. Actually, it was more like

0:04:34 > 0:04:43an abattoir where they were stripped and taken apart.Does he agree with

0:04:43 > 0:04:52me that one of the reasons that many of members in the size funded almost

0:04:52 > 0:04:58unbelievable, affecting so many of our constituents, was because one of

0:04:58 > 0:05:03the conditions put on any settlements of the GR G group raised

0:05:03 > 0:05:07with businesses that were in trouble were gagging orders confidentiality

0:05:07 > 0:05:11agreements that has prevented them from speaking openly about the

0:05:11 > 0:05:19plight that they faced questions I agree.Some businesses were put into

0:05:19 > 0:05:23GRG simply for saying I am not happy with my bank, I want to move. They

0:05:23 > 0:05:29ended up in GRG. Also when we talk about how they were stressed, this

0:05:29 > 0:05:37is a term that I think is something that the bank used as a wanted as it

0:05:37 > 0:05:42saw fit, so many of these businesses who were there were treated in such

0:05:42 > 0:05:46an appalling way and I think you have raised that point very clearly.

0:05:46 > 0:05:51I will just make some progress than I will take two more. As time has

0:05:51 > 0:05:56gone on we have discovered that Andy Gibbs is not alone. Not even one of

0:05:56 > 0:06:00hundreds but one of thousands. As many members will be where the

0:06:00 > 0:06:04stories keep coming. Backed up by evidence. It is not at the point

0:06:04 > 0:06:07where it has become clear we have not just a series of individual

0:06:07 > 0:06:13scandals, but a full systemic danger that needs to be addressed by this

0:06:13 > 0:06:18House. I want to focus briefly on what got us here, more importantly,

0:06:18 > 0:06:24how we work towards a constructive solution.Does the honourable

0:06:24 > 0:06:29gentleman share my discussed that four and a happy years after

0:06:29 > 0:06:34Secretary of State I referred many of these cases to the FCA we still

0:06:34 > 0:06:42only have an interim report. The BBC has seen a copy of the final report

0:06:42 > 0:06:45which contains the following incriminating phrase. Management

0:06:45 > 0:06:50knew or should ignore and that this was unintended and coordinated

0:06:50 > 0:06:54strategy and that the mistreatment of business was a result of that.

0:06:54 > 0:07:02And that the head of GRG responsible for that policy, Nathan Bostock, is

0:07:02 > 0:07:08now chief executive of Santander. Thank you. I think it is a valid

0:07:08 > 0:07:13point you have raised. One of the things that I hope we can here today

0:07:13 > 0:07:18from the government is action on this issue. For long enough now

0:07:18 > 0:07:22small businesses medium-sized businesses, many of Mike

0:07:22 > 0:07:27constituents are tired of the foot dragging that has gone on. The

0:07:27 > 0:07:30Treasury Select Committee is in support of this being published.

0:07:30 > 0:07:35Even the FCA would probably conclude it would be helpful if this was

0:07:35 > 0:07:40published. It is long overdue that this was published so people can see

0:07:40 > 0:07:43the full scale of what RBS and potentially other banks have been up

0:07:43 > 0:07:57to.The point he was making earlier about this being failing businesses,

0:07:57 > 0:08:00Mike constituent Andrea Willis who is with us today, her business was

0:08:00 > 0:08:05not failing but the bank absolutely refuse to accept any kind of funding

0:08:05 > 0:08:09for a short term loan payoffs, attributing it to a larger loan

0:08:09 > 0:08:15payoff. J had to come up with the full cost of multiple loans, around

0:08:15 > 0:08:19£635,000, making it completely impossible for her. That is exactly

0:08:19 > 0:08:23what these banks have done, making it impossible for hard-working

0:08:23 > 0:08:25people to run their business when they were not in trouble in the

0:08:25 > 0:08:36first place.I agree. From my time I have heard so many similar stories

0:08:36 > 0:08:40of companies that have potentially been forcibly distressed by the bank

0:08:40 > 0:08:47and then carved up like a Sunday roast and just that way. As many

0:08:47 > 0:08:51members themselves will be aware of the stories keep coming, backed up

0:08:51 > 0:08:55by evidence. It is now at the point where it has become clear we have

0:08:55 > 0:09:00not just a series of scandals but a full systemic failure that needs to

0:09:00 > 0:09:10be addressed for sub I want to focus on how we move forward. A series of

0:09:10 > 0:09:13achievable and transformative objectives have been come up with.

0:09:13 > 0:09:19My focus today will be on dispute resolution, restitution and the need

0:09:19 > 0:09:22for an independent financial services Tribunal, one with the

0:09:22 > 0:09:26teeth required to tackle complex and for the individuals involved, life

0:09:26 > 0:09:31changing scenarios. I'm only going to touch briefly on the past as it

0:09:31 > 0:09:36is important that we separate the crises it had into two distinct

0:09:36 > 0:09:42phases. The first crisis in 2007 was a crisis of liquidity. The second

0:09:42 > 0:09:47crisis, which we are discussing today, is a con bug crisis that

0:09:47 > 0:09:51spans not only the financial services industry, but extends to

0:09:51 > 0:09:58the role of professional advisers. These are of the surveyors,

0:09:58 > 0:10:01accountants, insolvency practitioners and solicitors, all

0:10:01 > 0:10:06fundamental parts of the matrix and I will return to the shortly.

0:10:06 > 0:10:13Turning to RBS, the recent section 166 FCA report focuses on the years

0:10:13 > 0:10:18between 2,000 updates and 2013 when banks were under extreme pressure to

0:10:18 > 0:10:22shore up their balance sheets, however this behaviour did not

0:10:22 > 0:10:26spring up spontaneously. Senior banking insiders who worked in RBS

0:10:26 > 0:10:32in the mid-90s through to the crisis are clear, the modus operandi of GRG

0:10:32 > 0:10:37had been happening for years, prior to the liquidity crisis. GRG and its

0:10:37 > 0:10:43predecessor was known as the mortuary for businesses as early as

0:10:43 > 0:10:48the late 90s. However, during those heady days of liquidity businesses

0:10:48 > 0:10:52might have had an opportunity to re-bank with competitors once the

0:10:52 > 0:10:57liquidity crisis hit, that was the longer an option and our business

0:10:57 > 0:11:00community had to deal with the consequences which have been ramped

0:11:00 > 0:11:06up to an industrial scale ever since. Although this debate today

0:11:06 > 0:11:12headlines with RBS GRG, this is just a symptom of the underlying issue.

0:11:12 > 0:11:16It is hard to find an institution that is not find itself at the

0:11:16 > 0:11:20centre of a con bug scandal and I'm sure we will hear many of them

0:11:20 > 0:11:29today. The APPG has come across similar incidents from the major

0:11:29 > 0:11:39banking institutions. The HBOS banking scandal may seem easy to put

0:11:39 > 0:11:43aside as a few bad apples, but the reality is this is a consequence of

0:11:43 > 0:11:52the same systemic failure for sub everyone thought they would not get

0:11:52 > 0:11:59caught and so it escalated we have to ask ourselves how the possible

0:11:59 > 0:12:03this has gone on for so long completely unchecked? We should have

0:12:03 > 0:12:08got this much sooner. Instead it has been left to a dedicated group of

0:12:08 > 0:12:16individual victims and their relentless pursuit of this I the

0:12:16 > 0:12:22media with people such as Jonathan Ford, with Sunderland, Tom Warren,

0:12:22 > 0:12:27Ian Fraser and Heidi Blake to name just a few. This is the journalism

0:12:27 > 0:12:35that the British public needs, one that investigates the powerful and

0:12:35 > 0:12:41holds them to account.

0:12:41 > 0:12:47Even now as we get our heads round the issue, we're still not properly

0:12:47 > 0:12:51addressing the issues. Why? Because our response has been piecemeal so

0:12:51 > 0:12:57far. We have to take a step back and look at the ecosystem in which such

0:12:57 > 0:13:01behaviour managed not to survive but thrive. I want to mention the

0:13:01 > 0:13:07possible scale of this scandal. At its peak,

0:13:15 > 0:13:25GIG had... Some of the businesses were placed into GIG for no other

0:13:25 > 0:13:32reason than they made a complaint against the bank. So we have to ask

0:13:32 > 0:13:34ourselves, how many of those businesses should have been there in

0:13:34 > 0:13:40the first place? A lot has been made of the fact businesses were

0:13:40 > 0:13:43distressed as I said earlier, but this is a subjective and ambiguous

0:13:43 > 0:13:51term. We know that 90% of DRG administered businesses never made

0:13:51 > 0:13:56it back into banking. This is immeasurable, but we believe the

0:13:56 > 0:14:02course to be in the tens of billions. This is the potential size

0:14:02 > 0:14:10of the injustice that has taken place in this country. It may be the

0:14:10 > 0:14:16largest theft anywhere ever. If we take into account the costs to the

0:14:16 > 0:14:20economy of business failure and businesses unable to grow if few

0:14:20 > 0:14:24includes job losses, homes, the loss of health, relationship and taxes,

0:14:24 > 0:14:30we can see that costs are likely to be immeasurable. Scandals on this

0:14:30 > 0:14:40skill cannot happen in a vacuum. The role of the law of solicitors and

0:14:40 > 0:14:43conveyancers must be considered. Even a consideration -- situation

0:14:43 > 0:14:50where everyone is playing the part, playing to the letter of the law, it

0:14:50 > 0:14:59has been a catastrophic outcome. We have to ask, how was -- how was this

0:14:59 > 0:15:11possible? Those of us expect to be covered by the rule of law, anything

0:15:11 > 0:15:19else is the wild West and not suitable for a successful economy.

0:15:19 > 0:15:24The House must tackle the inherent inequality of power in relationship

0:15:24 > 0:15:29between business and lenders. From the moment business signs a

0:15:29 > 0:15:36one-sided contract laden with and ambiguous terms through its

0:15:36 > 0:15:38life-cycle and potentially to insolvency, there is no independent

0:15:38 > 0:15:41and affordable place for a business to go if they are in dispute with

0:15:41 > 0:15:46the lender. They are reliant on the limited scope of the financial

0:15:46 > 0:15:48ombudsman. Various trade associations and individual

0:15:48 > 0:15:54institutions to handle complaints. The outcome, the public and

0:15:54 > 0:15:56businesses see a large group of powerful institutions and trade

0:15:56 > 0:16:02bodies operating from behind castle walls, with no transparency or

0:16:02 > 0:16:06external accountability, except for an expensive and prohibitive court

0:16:06 > 0:16:15process, which is beyond all but the... When we get ad hoc redress

0:16:15 > 0:16:19scheme set up to deal with scandal such as interest rate hedging

0:16:19 > 0:16:24products, GRG and HBOS Reading are wholly unsatisfactory and

0:16:24 > 0:16:30discredited. They appear to be more cynical exercise in financial

0:16:30 > 0:16:36institutions liability rather than a genuine attempt at restitution. The

0:16:36 > 0:16:43exercise is conducted behind closed is where banks are lighted act as

0:16:43 > 0:16:48judge, jury and executioner. The use of an independent person who the

0:16:48 > 0:16:51bank appoints will never instil trust. It is like a burglar being

0:16:51 > 0:16:57able to pick the members of a jury at the trial. To add insult to

0:16:57 > 0:17:03injury, in the case of the interest rate hedging scheme and the RBS GRG

0:17:03 > 0:17:07scheme, the fact the insolvency law allowed institutions to pay

0:17:07 > 0:17:10themselves back for misconduct springs the process into the realm

0:17:10 > 0:17:16of farce. It is a system that does not instil confidence. The best iron

0:17:16 > 0:17:20institutions can say is, trust us, we are doing the right thing. If you

0:17:20 > 0:17:24do not like it, sewers. You only have to look at the content of

0:17:24 > 0:17:28debate today to see that self-regulation alone is simply not

0:17:28 > 0:17:36enough. I want to be clear. Those who support this and not calling for

0:17:36 > 0:17:41extensive regulation, we are calling for transparency and justice.

0:17:41 > 0:17:47Without proper transparency and accountability, there can be no

0:17:47 > 0:17:51trust. Trust is what the financial sector depends on. Undermine and

0:17:51 > 0:17:56pollute it, and it will never survive. The cold fact is that right

0:17:56 > 0:18:00now, in this country, the trust that once existed has been shattered.

0:18:00 > 0:18:10This distrust has become so severe that it is affecting business. We

0:18:10 > 0:18:14need to get a handle on the issues and look at the ecosystem for

0:18:14 > 0:18:19businesses if we are to move on. Today we are calling for an enquiry

0:18:19 > 0:18:24that cuts across departmental lines and looks at the protections

0:18:24 > 0:18:28afforded to business during the life cycle, so we can map out a long-term

0:18:28 > 0:18:32plan to ensure sufficient safeguards to prevent this ever happening

0:18:32 > 0:18:37again. More urgently, we are calling for a tribunal system to be set up

0:18:37 > 0:18:42to deal with financial disputes. A system similar to that which exists

0:18:42 > 0:18:46for employment tribunal is. This does not require primary

0:18:46 > 0:18:50legislation. The legislation already exists to enable the rapid

0:18:50 > 0:18:54establishment of a tribunal, but needs the political will to carry it

0:18:54 > 0:19:01through. Andrew Bailey at the FCA has openly supported the idea, but

0:19:01 > 0:19:04we are concerned that extending the remit of the ombudsman, as this is

0:19:04 > 0:19:10not the right solution for what is a complex problem. Once established,

0:19:10 > 0:19:12the tribunal system will ensure that banking works better, not just in

0:19:12 > 0:19:17the interests of its customers but for the banking industry itself.

0:19:17 > 0:19:21This is important because we all acknowledge that the financial

0:19:21 > 0:19:25sector is critical to the UK's future prosperity, and the

0:19:25 > 0:19:31relationship they have with their bank is a central Park. In a

0:19:31 > 0:19:35regulated economy, the relationships between small and medium enterprises

0:19:35 > 0:19:44should be symbiotic with the finance sector, not parasitic. This is not

0:19:44 > 0:19:48where we are. It is time the government, the FCA and Parliament

0:19:48 > 0:19:52step up to the plate to ensure businesses get fair treatment and

0:19:52 > 0:19:58access to affordable justice. Our businesses deserve nothing less. Our

0:19:58 > 0:20:02economy requires nothing less, especially at this critical time

0:20:02 > 0:20:06with Brexit approaching. This matter has been left adrift in the

0:20:06 > 0:20:12wilderness for too long. Consequences have been catastrophic

0:20:12 > 0:20:18to individual waves and confidence in the entire financial system. The

0:20:18 > 0:20:21introduction of a tribunal system will help to rebuild the strong

0:20:21 > 0:20:23relationships that once existed between small and medium enterprises

0:20:23 > 0:20:29and the banks, helping the growth of our economy and the international

0:20:29 > 0:20:33reputation of the financial sector. It is important to say that

0:20:33 > 0:20:40constructive process has been made. Stakeholders were brought together

0:20:40 > 0:20:43to produce a coherent and ambitious plan to promote trust. If you

0:20:43 > 0:20:50haven't heard it, I would suggest you do. Working group has been

0:20:50 > 0:20:54formed which will be announced in the near future to discuss and look

0:20:54 > 0:20:58at this. Have no doubt, this is an important first step for businesses

0:20:58 > 0:21:04and industry. But it is part of the jigsaw for this problem. With a

0:21:04 > 0:21:08problem this big, only a systematic open-minded challenge to the status

0:21:08 > 0:21:15quo will work with the businesses, banks and economy. This is an

0:21:15 > 0:21:23opportunity to show the economy that buying the exchanges that take place

0:21:23 > 0:21:28here, we can put aside political point scoring and come together to

0:21:28 > 0:21:31work towards a common goal. I therefore commend this motion to the

0:21:31 > 0:21:44House.There will now be a time limit of five minutes. Nicky Morgan.

0:21:44 > 0:21:47It is a pleasure to follow the honourable gentleman, and I

0:21:47 > 0:21:53congratulate him for securing this debate. And the support I know he

0:21:53 > 0:21:57had with the right honourable member for North Norfolk at the backbench

0:21:57 > 0:22:02committee hearing. The fact that there are so many members here on

0:22:02 > 0:22:06Thursday shows how many have constituents affected by RBS's

0:22:06 > 0:22:10global restructuring group, and those are the reasons why we're here

0:22:10 > 0:22:18those problems. I want to pay tribute to my constituents who have

0:22:18 > 0:22:23been affected and also others who have contacted me. Those who have

0:22:23 > 0:22:28lost homes, their health, their marriages, and in some cases have

0:22:28 > 0:22:35lost far more than that as well. As we heard from the former Business

0:22:35 > 0:22:40Secretary, it is over three years since the Tomlinson report was

0:22:40 > 0:22:48published, leaving an investigator looking into what happened at GRG.

0:22:48 > 0:22:53The previous select committee and its chairman took evidence from Mr

0:22:53 > 0:22:56Tomlinson and RBS. RBS then had to apologise to the committee for

0:22:56 > 0:23:02giving misleading evidence about the role and debate -- objectives of

0:23:02 > 0:23:07GRG. The disclosure of the findings of the review, the new Treasury

0:23:07 > 0:23:10Select Committee, which I'm privileged to cheer is determined to

0:23:10 > 0:23:21consider the work of its -- continue the work of the predecessor.I am

0:23:21 > 0:23:24grateful. Does she agree that apologies are simply not good

0:23:24 > 0:23:27enough. Many of our constituents who suffered in their business interests

0:23:27 > 0:23:34and personal lives, we need the enquiry and we need to bring justice

0:23:34 > 0:23:40for constituents.He makes a very important point, and I think he is

0:23:40 > 0:23:48absolutely right. I will come on to talk about the tribunal, but

0:23:48 > 0:23:53starting with sorry takes the sting out of the situation. Faced with the

0:23:53 > 0:23:59continual refusal of the report, we appointed an independent QC to

0:23:59 > 0:24:06review the summary and ensure it was an accurate summary. The final

0:24:06 > 0:24:12summary was published on the 28th of November last year. Although it is

0:24:12 > 0:24:17written in technical language, it exposed a litany of poor conduct,

0:24:17 > 0:24:24dismissive and aggressive relations with customers, a culture of

0:24:24 > 0:24:29deal-making, inadequate and inappropriate complaint handling,

0:24:29 > 0:24:41and the list goes on. Yesterday, a letter to me, RBS published the memo

0:24:41 > 0:24:51we heard in 2009. Given this, it is unfortunate that the RBS has stated

0:24:51 > 0:24:55that the more serious allegations made against the band have not been

0:24:55 > 0:25:00upheld when the FCA published its interim summary. All agree that what

0:25:00 > 0:25:06happened is serious and I am sure many firms will as well. It is

0:25:06 > 0:25:09disappointing RBS, again pressed by the committee, disclosed it does not

0:25:09 > 0:25:13accept many findings and disagrees and appropriate treatment of small

0:25:13 > 0:25:16and medium enterprises will systematic and widespread. RBS seems

0:25:16 > 0:25:22to be isolated a mess, with the FCA concluding that are supporting the

0:25:22 > 0:25:25conclusion. Evidence will be taken from RBS and affirm that conducted

0:25:25 > 0:25:29the review shortly, and I would encourage all members if they have

0:25:29 > 0:25:37not send us -- sent us information from constituents, I ask that they

0:25:37 > 0:25:47will. I take the spirit of the honourable gentleman's comments,

0:25:47 > 0:25:51because he is not just write to look at what went wrong, but also to the

0:25:51 > 0:25:58future. That is where the motion looks today. We're small and

0:25:58 > 0:26:01financially distressed businesses is concerned, we do not have a

0:26:01 > 0:26:05partnership. It is an unbalanced and potentially exploitative

0:26:05 > 0:26:15relationships in which banks can use illegal firepower to ensure they

0:26:15 > 0:26:22are... The concern is that the government may not be prepared to

0:26:22 > 0:26:30consider a legislative solution. I welcome the Minister discussing this

0:26:30 > 0:26:36later. Will the response force us to consider what legislation might be

0:26:36 > 0:26:44required? As we have heard...Of course I will give way. I have read

0:26:44 > 0:26:49the exchange between herself and the FCI on this. Does she agree that one

0:26:49 > 0:26:53of the things that is of real concern is the impression that is

0:26:53 > 0:27:00conveyed from that correspondence, that the FCAs rather intimidated --

0:27:00 > 0:27:05is rather intimidated by potential actions, and shouldn't it be the

0:27:05 > 0:27:13other way around?Can I thank them very much indeed, he makes a valid

0:27:13 > 0:27:20point and of course it should be the other way around. The FCA is the

0:27:20 > 0:27:25regulator, and I think this is about individual case, but also about a

0:27:25 > 0:27:28wider message sent to the system of regulated lending to small and

0:27:28 > 0:27:35medium enterprises. There could be a solution which is a dispute

0:27:35 > 0:27:42resolution regime. Suggested by my honourable friend, who has done very

0:27:42 > 0:27:48important work in this area. Another option would be to bring corporate

0:27:48 > 0:27:53lending of a certain size within perimeter, allowing the FCA to take

0:27:53 > 0:27:56action against firms directly for any failings. These are not mutually

0:27:56 > 0:28:01exclusive.

0:28:01 > 0:28:05I would welcome the Treasury's analysis of the costs and benefits

0:28:05 > 0:28:11of moving the regulatory perimeter and I would welcome confirmation the

0:28:11 > 0:28:16Treasury do not rule out a legislative approach, to ensure a

0:28:16 > 0:28:21new tribunal or parameter change, if deemed appropriate. I have heard

0:28:21 > 0:28:25your strictures about time, I will not take up to much more. Geology

0:28:25 > 0:28:31was a warning that all was not well. There is only the advent of the

0:28:31 > 0:28:36FCA's senior manager's regime at the moment to prevent it happening again

0:28:36 > 0:28:40-- GRG was a warning. When I hear people saying they will never trust

0:28:40 > 0:28:51a bank again, they will

0:28:54 > 0:28:57never ask a bank again for money, it should be a chilling moment for all

0:28:57 > 0:28:59banks involved in lending and working with SMEs. Bank lending is

0:28:59 > 0:29:01an important part of the financial infrastructure in this country. That

0:29:01 > 0:29:04is wider than government stepped in in the financial crisis in 2008. --

0:29:04 > 0:29:06that is why the government. The Treasury committee will continue to

0:29:06 > 0:29:09consider the options available to provide further protections to SMEs

0:29:09 > 0:29:18in dealings with their banks.I extend my congratulations to my

0:29:18 > 0:29:21honourable friend for securing this debate and it is a pleasure to

0:29:21 > 0:29:25follow the right honourable member opposite. The most alarming aspect

0:29:25 > 0:29:30for me of the issue of the treatment of SMEs by the banking sector is the

0:29:30 > 0:29:34conspiracy of denial which has existed between banks and the

0:29:34 > 0:29:38professional advisors and it has been reinforced by the institutions

0:29:38 > 0:29:43which are supposed to regulate the financial sector. My constituent is

0:29:43 > 0:29:48at the very least a victim of grossly unethical practice but much

0:29:48 > 0:29:51more likely criminal fraud at the hands of Lloyds Bank. The same bank

0:29:51 > 0:29:58behind that HBOS fraud. His case is a lead case, the backbone of the

0:29:58 > 0:30:04select committee inquiry in March 2015, and two Westminster Hall

0:30:04 > 0:30:08debate which are led on the 16th of September 2015 and the 18th of April

0:30:08 > 0:30:13last year. When lending to my constituent was no longer attractive

0:30:13 > 0:30:18to Lloyds after the financial crash, it renege on the lending commitment,

0:30:18 > 0:30:23relying on alleged breached loan to value covenant. That breach was

0:30:23 > 0:30:28justified by a down valuation of his property portfolio worth in excess

0:30:28 > 0:30:33of £10 million, that valuation provided by a firm of chartered

0:30:33 > 0:30:37surveyors whose employees were embedded in Lloyds Bank and who were

0:30:37 > 0:30:42then rewarded with lucrative work. The substantial evidence I have

0:30:42 > 0:30:46considered over the last three years leads me to conclude criminal acts

0:30:46 > 0:30:52have taken place followed by a cover-up by the parties concerned.

0:30:52 > 0:30:57Senior management of Lloyds, Alder King and the royal institute for

0:30:57 > 0:31:00chartered surveyors have all refused to meet me together with my

0:31:00 > 0:31:03constituent to discuss his case, none of them have the guts to sit in

0:31:03 > 0:31:08a room with me and my constituent to listen to his legitimate complaint.

0:31:08 > 0:31:13The approach taken by Lloyds primarily, but also Alder King, has

0:31:13 > 0:31:16been to use the gross power imbalance we have heard about

0:31:16 > 0:31:21existing between SMEs and the big banks to bully and a little less to

0:31:21 > 0:31:29the point where at least one of them has taken his own life. -- bully and

0:31:29 > 0:31:32belittle. They obfuscate and a leg, knowing that if they keep batting

0:31:32 > 0:31:37away complaints and the concerns of the victims, those individuals

0:31:37 > 0:31:42eventually capitulate because they have no choice. I will give way.

0:31:42 > 0:31:47Most powerful speech. Both she and the honourable proposal referred to

0:31:47 > 0:31:52that HBOS case, guilty verdicts delivered on the 30th of January,

0:31:52 > 0:31:58does she share my concern and of the constituents affected that they

0:31:58 > 0:32:01still have not settled with Lloyds Bank a year after those verdicts

0:32:01 > 0:32:06have been delivered which goes to what the honourable lady is saying?

0:32:06 > 0:32:11I absolutely agree with him. Statutory limitation periods are run

0:32:11 > 0:32:15down through deliberate delay by the banks, they know they hold all the

0:32:15 > 0:32:19financial cards in this situation because how can any of the victims

0:32:19 > 0:32:24afford to litigate to get proper redress when they have already lost

0:32:24 > 0:32:29their businesses, homes, as a consequence of the bank's actions?I

0:32:29 > 0:32:33thank her forgiving way. It is absolutely correct, as in the case

0:32:33 > 0:32:38of the constituent I mentioned earlier, £45,000 at least, it has

0:32:38 > 0:32:44taken up all up of her husband's firefighter pension to try to tackle

0:32:44 > 0:32:47this injustice she has undeservedly been the victim of.Very powerful

0:32:47 > 0:32:52example from my honourable friend, the gross imbalance of power. Legal

0:32:52 > 0:32:56expenses insurance is extortionate and out of the question so my

0:32:56 > 0:33:00constituent was quoted premium in excess of £1 million insurance cover

0:33:00 > 0:33:04for him to litigate against Lloyds. These deliberate tactics by the

0:33:04 > 0:33:10banks to prevent victims getting redress stink. It stinks. All the

0:33:10 > 0:33:14time this is happening, Lloyds senior executives present public

0:33:14 > 0:33:18face claiming to know nothing of what has gone on. I have copies of

0:33:18 > 0:33:23letters written by members of this House in 2014 to the Lloyds chief

0:33:23 > 0:33:26executive, the regulator, formerly alerting them that if they did not

0:33:26 > 0:33:30already know, there were irregularities in the bank. Lloyds

0:33:30 > 0:33:33themselves have an internal report which they commissioned in

0:33:33 > 0:33:38September, 2013, that HBOS and project Bill Turnbull report

0:33:38 > 0:33:41highlighting many acts of criminality, as well as confirming

0:33:41 > 0:33:47the bank knew about that HBOS frauds as far back as 2008. It has been

0:33:47 > 0:33:51maintained by the chairman and the chief executive of Lloyds that they

0:33:51 > 0:33:55had no knowledge, but I am afraid I do not believe those assertions to

0:33:55 > 0:33:59be accurate. It begs the question that if the bank had knowledge of

0:33:59 > 0:34:05the fraud in 2008 and those HBOS convictions took place in 2017, why

0:34:05 > 0:34:09did the bank pursue personal guarantees on those fraud victim

0:34:09 > 0:34:14spent nine years until the case went to trial? There can only be two

0:34:14 > 0:34:24answers. Either the bank is entirely incompetent or those running it has

0:34:24 > 0:34:27not been honest. I am calling today on the Lloyds chair and the board to

0:34:27 > 0:34:29publish the report in its entirety. Following that HBOS convictions,

0:34:29 > 0:34:33those individuals serving a combined prison sentence of 48 years, why has

0:34:33 > 0:34:37there been a failure by Lloyds to compensate the victims? Similar

0:34:37 > 0:34:40practices have been shown to be prevalent in the Bristol offices of

0:34:40 > 0:34:43Lloyds but as yet no police force has carried out a proper forensic

0:34:43 > 0:34:49investigation. Anthony Stansfield, Police and Crime Commissioner,

0:34:49 > 0:34:52behind the successful HBOS convictions, he is determined to see

0:34:52 > 0:34:56a full and proper investigation into Lloyds Bristol and has passed

0:34:56 > 0:35:00evidence to the Avon and Somerset Police. I am calling today on the

0:35:00 > 0:35:05Chief Constable of Somerset and Avon police to expedite an investigation.

0:35:05 > 0:35:09As the evidence of the abuse by the banks and the conspiracy with their

0:35:09 > 0:35:14advisers grows by the day, the banks cannot say at the highest level that

0:35:14 > 0:35:18they were unaware of what was happening somehow insulated from the

0:35:18 > 0:35:22abuses taking place. The chief of Lloyds, he has made many public

0:35:22 > 0:35:28statements, one to the Evening Standard on the 17th of May last

0:35:28 > 0:35:32year, just one, saying he was unaware of the victim 's peoples

0:35:32 > 0:35:36complaints before the fraud trial, but I understand the Turnbull report

0:35:36 > 0:35:41confirms both his knowledge and the Lloyd's board knowledge of HBOS

0:35:41 > 0:35:50criminality. I also have a letter from the right honourable member

0:35:50 > 0:35:56when he was Secretary of State for Business, confirming he met to

0:35:56 > 0:36:00discuss my constituent's case and he was assured, he had looked into the

0:36:00 > 0:36:04case personally, I quote. It appears he is not as remote from these

0:36:04 > 0:36:11victim 's' cases as he claims. It is imperative we should inform the

0:36:11 > 0:36:15inquiry into Lloyds and other banks including consideration of the

0:36:15 > 0:36:18culpability of individuals. It should also compel full recompense

0:36:18 > 0:36:23to those who have been affected by the abuse and that should be the

0:36:23 > 0:36:26subject of genuine independent third-party administration and not

0:36:26 > 0:36:29the Sharad which has developed around Lloyds handling of the

0:36:29 > 0:36:40victims of the Reading H -- HBOS abuse -- the charade. That is why

0:36:40 > 0:36:45support this today.May I congratulate the honourable

0:36:45 > 0:36:49gentleman for securing this debate? I was pleased to be a member of the

0:36:49 > 0:36:51Backbench Business Committee when his application came before us and I

0:36:51 > 0:36:55think these kind of debates show the House at its best. I have a

0:36:55 > 0:37:01confession to make. I am a capitalist. But I am a capitalist

0:37:01 > 0:37:04who believes in a system that depends upon sound financial

0:37:04 > 0:37:09management. And the systematic mismanagement and dishonest practice

0:37:09 > 0:37:12by the Royal Bank of Scotland in this case fundamentally undermines

0:37:12 > 0:37:18capitalism. We know the behaviour of the bank was wrong both legally and

0:37:18 > 0:37:23morally, as reported in evidence at the report and by the FCA's skilled

0:37:23 > 0:37:26persons report. The injury to individual businesses and the

0:37:26 > 0:37:30business banking system as a whole has been compounded by the system of

0:37:30 > 0:37:34redress being put in place which was judged by many to be inadequate.

0:37:34 > 0:37:39Like many members on both sides of the house today, I have constituents

0:37:39 > 0:37:42affected by this case. Just one such example of malpractice was the

0:37:42 > 0:37:48forced liquidation of a company in 1998, formerly owned by a

0:37:48 > 0:37:54constituent of mine, it was a building and joinery company based

0:37:54 > 0:37:58in Stockport. The business customer of the RBS and used an overdraft

0:37:58 > 0:38:05like many other businesses to manage its cash flow. This overdraft in

0:38:05 > 0:38:071998 was £345,000. Not an unreasonable amount for a business

0:38:07 > 0:38:11of that scale. The company had been happily trading and growing under

0:38:11 > 0:38:16these arrangements for several years. In February of that year,

0:38:16 > 0:38:19Royal Bank of Scotland wrote to him saying that it wanted to reduce the

0:38:19 > 0:38:27overdraft facility to £200,000 and that the company owed the bank

0:38:27 > 0:38:32£700,000, a figure still in dispute today. Unable to operate in these

0:38:32 > 0:38:37restrictive conditions, the company was moved into RBS's global

0:38:37 > 0:38:42restructuring group, according to RBS, to help repay the money it out.

0:38:42 > 0:38:47Whilst under administration of this group, the bank's advisers

0:38:47 > 0:38:50consistently undervalued the company's assets, simultaneously

0:38:50 > 0:38:55overvaluing its liabilities. To support its claim that the company

0:38:55 > 0:38:58was unviable. In July of that year, they forced the company into

0:38:58 > 0:39:05receivership. They engineered the fall of the company by aggressive

0:39:05 > 0:39:08repayment plans allowing insufficient time to the company

0:39:08 > 0:39:13directors to a ploy independent valuers to prove worth of the assets

0:39:13 > 0:39:15and its solvency. My constituent believes the difference between the

0:39:15 > 0:39:21RBS figures and his own were around £2 million. Knowing that time is

0:39:21 > 0:39:25short today and there are many honourable and right honourable

0:39:25 > 0:39:28members who wish to make contributions, I will simply move on

0:39:28 > 0:39:35from the case and put some questions to the Treasury backbench. A scandal

0:39:35 > 0:39:39such as this just like Libor before it is yet another reason why people

0:39:39 > 0:39:43and businesses lose faith in the banking sector. Faith in the banks

0:39:43 > 0:39:47is essential for our faith in the whole capitalist system which I have

0:39:47 > 0:39:52hitherto been proud to defend. This was organised fraudulent asset

0:39:52 > 0:39:58stripping on a massive scale, leading to the forced liquidations

0:39:58 > 0:40:06of many businesses, companies which people have poured a lifetime of

0:40:06 > 0:40:09efforts into, and in the case of my constituent and many others, the

0:40:09 > 0:40:13nest egg for their retirement. RBS made billions from this activity but

0:40:13 > 0:40:19how many lives did they crush in the process? We especially on the side

0:40:19 > 0:40:23of the House rightly told the country we stand up for hard-working

0:40:23 > 0:40:27people. People like my constituent and hundreds of business owners like

0:40:27 > 0:40:32him, they are just such hard-working people. Yet they have had their

0:40:32 > 0:40:35assets stripped by the Royal Bank of Scotland, they now have very little

0:40:35 > 0:40:41to show fit. It is time we stood up for them. I asked my friend, the

0:40:41 > 0:40:47very able and newly appointed Treasury Minister, whilst Her

0:40:47 > 0:40:49Majesty's government has a controlling stake in the Royal Bank

0:40:49 > 0:40:53of Scotland, what is he doing to ensure the bank does the right thing

0:40:53 > 0:40:58by its former customers, both by the law and by the sense of common

0:40:58 > 0:41:01decency which all civilised businesses ultimately depend on? I

0:41:01 > 0:41:07will very happily give way.The honourable gentleman is making an

0:41:07 > 0:41:13excellent speech. Could I ask him to widen his ambition in this? What is

0:41:13 > 0:41:17clear in the case of my own constituent, a victim of Lloyds

0:41:17 > 0:41:21Bank, this was an industrywide conspiracy, not confined to one

0:41:21 > 0:41:26bank. The lies spread across. On that basis, it must be more than the

0:41:26 > 0:41:30Government using its powers with respect to a nationalised bank, it

0:41:30 > 0:41:35has to be systemic across the whole of the banking system.He was quite

0:41:35 > 0:41:40right to highlight the broader practice in the entire banking

0:41:40 > 0:41:44sector and I can find my remarks to the Royal Bank of Scotland given it

0:41:44 > 0:41:51was a constituency case, but he is right in what he says -- and I

0:41:51 > 0:41:54confined my remarks. I pay tribute both again to the honourable member

0:41:54 > 0:42:01and my honourable friend for their assiduous work on it and he was very

0:42:01 > 0:42:04generous in giving me an extra minute by that intervention as well.

0:42:04 > 0:42:10I only have one more sentence to say to the Minister. Simply put it like

0:42:10 > 0:42:14this. What does my constituent have to do to get the money that was

0:42:14 > 0:42:25stolen from him?They're not any more minutes. Only 24 hours the day.

0:42:25 > 0:42:30We cannot by creating interventions and more minutes. It doesn't happen.

0:42:30 > 0:42:33They have to come away from somewhere else. Gosh, everyone could

0:42:33 > 0:42:39do with a spell in the Treasury.

0:42:39 > 0:42:43Perhaps I should begin with a confession I'm not a capitalist but

0:42:43 > 0:42:48I do share the honourable gentleman's hope for fairness. I

0:42:48 > 0:42:52want to congratulate my honourable friend, for Norwich South in

0:42:52 > 0:42:57securing this debate. The most is primarily about RBS. The problem is

0:42:57 > 0:43:01far wider than just one bank. At the heart of this motion is the

0:43:01 > 0:43:05proposition that a number of banks deliberately managed the closure of

0:43:05 > 0:43:10businesses to protect their own interests. In doing so, prioritised

0:43:10 > 0:43:15the real eyesation of as sets over any other outcome. The Tomlinson

0:43:15 > 0:43:19report of which we've heard, suggested a deliberate strategy by

0:43:19 > 0:43:25banks. The artificial distress caused to viable businesses. The

0:43:25 > 0:43:32engineering of loan to to value ratios. The re-evaluation of as sets

0:43:32 > 0:43:37downwards to trigger default. The partnership, not real, but the

0:43:37 > 0:43:40situation in which banks had all the power and businesses had no

0:43:40 > 0:43:45meaningful recourse. Professional advisers and bodies were either

0:43:45 > 0:43:49ineffective or took the side or in some cases, I believe, even aided

0:43:49 > 0:43:56the banks. I want to highlight in the brief time I have two

0:43:56 > 0:44:00constituency cases. The first, Graham Stuart. A builder and

0:44:00 > 0:44:04property developer who was courted for business by Lloyds Bank in 2003.

0:44:04 > 0:44:07His accounts were managed locally and regionally at first and

0:44:07 > 0:44:12successfully. The fateful decision was made to transfer his accounts to

0:44:12 > 0:44:16the Bristol business support unit and that's when his troubles began.

0:44:16 > 0:44:22Review periods were shortened. Repayments were doubled. At every

0:44:22 > 0:44:30single stage, charges were added. He was told to sell some properties and

0:44:30 > 0:44:34use Alder kink, Lloyds chosen valuers who undervalued his

0:44:34 > 0:44:37properties systematically. When he complained, his loans were called

0:44:37 > 0:44:42in. I understand that some of the banks may have accessed the

0:44:42 > 0:44:44Government's enTerre price finance guarantee scheme to cover their

0:44:44 > 0:44:51losses. Advisers got their fees. My constituent, Mr Stewart, was left

0:44:51 > 0:44:56with huge debts. He never missed a payment and he had never been in

0:44:56 > 0:45:03arrears. My second constituent is Mr Benn Warren who was an Allied Dunbar

0:45:03 > 0:45:10client. They were sold to zueric financial services Ltd in 19 8 after

0:45:10 > 0:45:17a number of misselling scandals. Parts were sold on a decade later.

0:45:17 > 0:45:20The deposit book attractive, the loan book less so. Despite

0:45:20 > 0:45:24assurances to clients they would not be materially affected by any

0:45:24 > 0:45:29transfer, within 14 days of the transfer, 95% of loans were declared

0:45:29 > 0:45:34to be impaired. 300 people were affected, including my constituent.

0:45:34 > 0:45:39A third were pushed into bankruptcy. The companies protected themselves

0:45:39 > 0:45:44at every stage by betting on the financial markets as my constituent

0:45:44 > 0:45:47described it, it was like selling a car, then betting on whether or not

0:45:47 > 0:45:52it would break down. Mr Warren asks a simple question for the minister.

0:45:52 > 0:46:00Why does the UK allow companies based in offshore tax havens to

0:46:00 > 0:46:04manipulate small and medium enterprises in this way? It

0:46:04 > 0:46:08certainly seems like systematic manipulation to many, including

0:46:08 > 0:46:15myself, it looks like criminality. Yet, the HBOS Reading fraud cost

0:46:15 > 0:46:19Thames Valley Police £7 million to investigate. Where are the resources

0:46:19 > 0:46:26for such a herbing ewe lean task? In the case of Allied Dunbar victims,

0:46:26 > 0:46:29they went to Northumbria Police economic crime unit who said they

0:46:29 > 0:46:32lacked the resources to investigate and directed them to the Serious

0:46:32 > 0:46:42Fraud Office who sent them back to Northumbria comim crime unit. We

0:46:42 > 0:46:45need accountability, transparency, justice for victims and that

0:46:45 > 0:46:51incolludes compensation. We need to protect SMEs in the future with a

0:46:51 > 0:46:57more effective tribunal system. And, finally, and importantly, we need

0:46:57 > 0:47:00the Treasury Select Committee to continue to take such a keen

0:47:00 > 0:47:08interest in this matter.As a member of the Treasury Select Committee I

0:47:08 > 0:47:13can assure you we are taking a keen interest. The honourable member from

0:47:13 > 0:47:20thine mouth, we are taking a keen interest. I can say in 2016 an RBS

0:47:20 > 0:47:25document leaked to the BBC proved staff were "asked to search for

0:47:25 > 0:47:30companies that could be restructured or have their interest rates bumped

0:47:30 > 0:47:39up" in move 2013, the FCA announced it concluded that "RBSZ not set out

0:47:39 > 0:47:44artificially engineered SMEs to fall into FRG. There was not a widespread

0:47:44 > 0:47:47practice of identifying customers for transfer for inappropriate

0:47:47 > 0:47:54reasons such as their potential value to GRG" well, all I can say to

0:47:54 > 0:48:01that is what absolute balanceder dash. I will del you why I say that.

0:48:01 > 0:48:07Early in 2009, in February, I received a telephone call from our

0:48:07 > 0:48:12RBS bank manager who was looking after the account of a self-storage

0:48:12 > 0:48:17business in Edinburgh we had. He said quite simply we were going into

0:48:17 > 0:48:23default. Our interest rate would be put up by 6% immediately. They were

0:48:23 > 0:48:28looking into other issues and we would go into GRG. At that time, we

0:48:28 > 0:48:34hadn't breached any co-nans. As you can imagine, I asked him for a

0:48:34 > 0:48:39meeting urgently. They'd competed for the business with Lloyds. We had

0:48:39 > 0:48:45a term loan on a building in Edinburgh of which I was and remain

0:48:45 > 0:48:52the major shareholder. That term loan was 1% over base. Banks don't

0:48:52 > 0:48:59want loans on 1% over base in 2009. We got the meeting. He came in said

0:48:59 > 0:49:02they'd remodelled our management accounts and we were breaching

0:49:02 > 0:49:05covenants. I tried to find out how we were breaching them. He couldn't

0:49:05 > 0:49:11tell me. When my book keeper was giving him a glass of water, looking

0:49:11 > 0:49:17over his shoulder, she spotted that he was using February 2006

0:49:17 > 0:49:20management accounts to claim this breach. Some three years previously.

0:49:20 > 0:49:26I showed him the door. Didn't hear from him again for three weeks. He

0:49:26 > 0:49:32came back and told me we were in breach of our co-nans because our

0:49:32 > 0:49:35building had devalued by 40%. We were immediately going into 6% over

0:49:35 > 0:49:41base. I called him in again. Another meeting. I said we must get the

0:49:41 > 0:49:47building revalued. People mentioned Alder kink and others. Self-storage

0:49:47 > 0:49:51was a special business. They wanted us to use their valuer. I smelt a

0:49:51 > 0:49:56rat and insisted it was a self-storage valuer who was used.

0:49:56 > 0:50:02That was £15,000 in cost. They said we had to bear it. In response I

0:50:02 > 0:50:05said, actually, here's the deal. If the valuation remains the same,

0:50:05 > 0:50:10which is fine for our co-nans, or goes up, you pay it. They were

0:50:10 > 0:50:15confident it would go down. When the valuation came down it had doubled.

0:50:15 > 0:50:21They had to pay it. Needless to say, they were livid. The manager

0:50:21 > 0:50:25disappeared from our radar. Then they proceeded to make things as

0:50:25 > 0:50:30impossible and divas possible for us. No bank wants to loan on 1% over

0:50:30 > 0:50:40base. We then tired of RBS and moved to Handles bank at increased expense

0:50:40 > 0:50:44but we'd lost faith in them. I later learned from a bank manager who'd

0:50:44 > 0:50:52moved on and I met in a different role later that after October 2008

0:50:52 > 0:50:58bail-out and when Fred Goodwin left and Stephen Hester arrived we were

0:50:58 > 0:51:02and unsuccessful part of project dash for cash. The plan was to seize

0:51:02 > 0:51:08as sets through perceived default. Between 2007 and 2012, more than

0:51:08 > 0:51:1315,000 companies were moved into GRG to await their fate. I have no doubt

0:51:13 > 0:51:16that many of those customers were not treated with proper care and

0:51:16 > 0:51:22attention from my own experience. I've not doubt in my mind the

0:51:22 > 0:51:24Financial Standards Authority conclusions I referred to earlier

0:51:24 > 0:51:30were wholly wrong and there was widespread practice of tidifying

0:51:30 > 0:51:35customer for transfer to GRG for inappropriate reasons. ...Thank

0:51:35 > 0:51:43you. Can I ask the honourable gentleman what his conclusions were

0:51:43 > 0:51:46about the cultures prevailing in RBS at that time and whether it

0:51:46 > 0:51:51continues to this day?I don't know. I don't deal with them any longer

0:51:51 > 0:51:57and I wouldn't on principle. But the culture at the time was disgraceful.

0:51:57 > 0:52:01Actually, my business at that time was making a profit when they came.

0:52:01 > 0:52:05It has made a profit every single month since then. But it is a good

0:52:05 > 0:52:11example of how they tried it on. So, I will say I was lucky enough to be

0:52:11 > 0:52:16a robust enough position to send them packing. Nonetheless, it was a

0:52:16 > 0:52:20very stressful and unpleasant experience. But for a variety of

0:52:20 > 0:52:24reasons, countless thousands were not as fortunate and many of those

0:52:24 > 0:52:32lives were needlessly ruined by the disgraceful and uncrew louse

0:52:32 > 0:52:36behaviour by RBS bank managers up and down the country. Those

0:52:36 > 0:52:42customers deserve redress. I support the motion.Thank you. I should say

0:52:42 > 0:52:46that that was incredibly powerful and valuable testimony from the

0:52:46 > 0:52:53honourable gentleman. I speak as a co-sponsor to this debate. I agree

0:52:53 > 0:52:57with every word of the member for Norwich South in his opening

0:52:57 > 0:53:02statement. We should be in no doubt the revelations in the report of

0:53:02 > 0:53:06this independent review are absolutely shocking. That's

0:53:06 > 0:53:12incidentally without the revelation also from my right honourable friend

0:53:12 > 0:53:16that the full report says management knew or should have known it was an

0:53:16 > 0:53:20intended and co-ordinated strategy. And the question is why was that

0:53:20 > 0:53:25left out of the summary of the report? Because it potentially makes

0:53:25 > 0:53:30the FCA complicit in the cover-up. That's incredibly serious and needs

0:53:30 > 0:53:37to be considered. Even without that, the report of the independent review

0:53:37 > 0:53:42highlights systematic failures. That in itself is an incredibly important

0:53:42 > 0:53:48conclusion. A failure to if Ulley recognise and manage conflict of

0:53:48 > 0:53:51interest between GRG's twin objectives of turning around a

0:53:51 > 0:53:57business and the financial contribution of GRG to RBS. The

0:53:57 > 0:54:01review concludes that commercial objective had been the strategic

0:54:01 > 0:54:06focus of management. That begs the question, were they Justin credibly

0:54:06 > 0:54:10supered or did they know exactly what they were doing? If they did

0:54:10 > 0:54:14know what they were doing, it amounts to theft of as sets of

0:54:14 > 0:54:20people who were running in many cases, entirely viable businesses.

0:54:20 > 0:54:23Asset stripping as one of the honourable members opposite

0:54:23 > 0:54:29described it. These are people who'd grafted through their adult lives to

0:54:29 > 0:54:35build up their businesses destroyed by this outragious became your. It

0:54:35 > 0:54:40is an extraordinairy scandal. The catalogue of behaviourout lined in

0:54:40 > 0:54:47the review exposed by brave whistle-blowers demonstrates an

0:54:47 > 0:54:51absolutely rotten culture. Victory emails celebrating ticking an asset

0:54:51 > 0:54:55off a business. Incentives to staff to take more money off stressed

0:54:55 > 0:55:01businesses to boost their bonuses. What of the lawyers' role in this,

0:55:01 > 0:55:04in managing that conflict of interests? The accountants,

0:55:04 > 0:55:11auditors. Who was complicit in this scandal? We need to know. That's why

0:55:11 > 0:55:19we need an inquiry to know who is culpable for this.He's making a

0:55:19 > 0:55:25very powerful SPEP of speech. He mentioned the relationship between

0:55:25 > 0:55:32the FC A&R BS. Is he aware of leaked board minutes from the FCA. They

0:55:32 > 0:55:35Saturdayed they wouldn't release a full report because they were

0:55:35 > 0:55:39concerned about being sued by the RBS. It question is who is

0:55:39 > 0:55:44regulating who in this relationship? Entirely right. We rely on the

0:55:44 > 0:55:50regulator to be powerful and tough in this situation. The human cost is

0:55:50 > 0:55:53incal could you lab. People driven to suicide. Marriages destroyed.

0:55:53 > 0:55:58Health destroyed. Who has been held to account for this disgusting

0:55:58 > 0:56:04behaviour? People and businesses ruined must have justice. An

0:56:04 > 0:56:08independent tribunal is essential, Government minister, is essential.

0:56:08 > 0:56:13It would act as a deterrent to bad behaviour. There would be

0:56:13 > 0:56:17consequences for your actions if you knew it would go to an independent

0:56:17 > 0:56:23tribunal. My constituent, Mark Wright is an RBS whistle-blower. His

0:56:23 > 0:56:27career and health have been destroyed. He and others are the

0:56:27 > 0:56:32heroes of this sorry story. Risking everything to do the right thing.

0:56:32 > 0:56:39Yet, he has also been horribly let down by the regulator, the FCA who

0:56:39 > 0:56:43dismissed his concerns, including the chief executive Andrew Bailey.

0:56:43 > 0:56:47But this week, he won a vital victory. The complaints commissioner

0:56:47 > 0:56:55has ruled that the FCA was wrong to reveal his name to RBS. What

0:56:55 > 0:56:59cavalier disregard of a whistleblower's rights. They fought

0:56:59 > 0:57:02it all the way, this complaint eventually only apologising right at

0:57:02 > 0:57:07the end. The case was brilliantly pursued by Steve Middleton who

0:57:07 > 0:57:11deserves enormous credit. He is now setting up with others, bank

0:57:11 > 0:57:17confident of which I declare an interest. I am a patron to protect

0:57:17 > 0:57:21whistle-blowers and to expose wrongdoing. But the truth is

0:57:21 > 0:57:24whistle-blowers have no real protection in this country. Contrast

0:57:24 > 0:57:30that with the United States. The dog Frank legislation introduced the

0:57:30 > 0:57:35office of the whistle-blower. It is there to protect whistle-blowers.

0:57:35 > 0:57:41They are rewarded financially for doing the right thing. They are

0:57:41 > 0:57:45awarded between 10 prep and 30% of the sanction collected against the

0:57:45 > 0:57:49firm. It can run into millions of dollars. What a contrast with this

0:57:49 > 0:57:56country. We need our own office of the whistle-blower and

0:57:56 > 0:57:59whistle-blowers should be guaranteed anonymity. They should be rewarded

0:57:59 > 0:58:04for their bravery. Maintaining the integrity of the banking system is a

0:58:04 > 0:58:09fundamental importance to all of us. Whistle-blowers are necessary for

0:58:09 > 0:58:17that purpose. My fear is that in the aftermath of the crash in 2008, all

0:58:17 > 0:58:20the focus of the banks, regulator and Government was on rebuilding

0:58:20 > 0:58:26balance sheets and that a collective blind eye was turned to how that was

0:58:26 > 0:58:31achieved and how many victims were left along the way, business owners

0:58:31 > 0:58:36and whistle-blowers. The Government and the FCA now need to act to clear

0:58:36 > 0:58:41up this scandal and to get new arrangements in place to rebuild

0:58:41 > 0:58:46trust in British banking and to give justice to those ruined by this

0:58:46 > 0:58:53outrageous behaviour.

0:58:53 > 0:58:57Madam Deputy Speaker, I welcome this important debate and I congratulate

0:58:57 > 0:59:03the honourable member for Norwich South securing it and I am conscious

0:59:03 > 0:59:07of following a powerful speech. Members on all sides of the House

0:59:07 > 0:59:12will be horrified and sickened by the content of the RBS memo and I

0:59:12 > 0:59:16congratulate members of the Treasury Select Committee for putting it in

0:59:16 > 0:59:21the public domain. Gloating and cruel, it is the symbol of a

0:59:21 > 0:59:28profoundly sick culture within that bank. To give RBS Perdue, I welcome

0:59:28 > 0:59:31the £400 million compensation fund and I welcome the complaints

0:59:31 > 0:59:39procedure with a former judge -- to give RBS Perdue. Sadly the issues

0:59:39 > 0:59:43raised by RBS as a number of honourable members have pointed out

0:59:43 > 0:59:47not confined to the bank so I believe the solutions we need are

0:59:47 > 0:59:52indeed industrywide. One of my constituents had an experience with

0:59:52 > 0:59:58HSBC which is exactly of the same kind as those experienced by RBS.

0:59:58 > 1:00:01His business had a cash flow problem, no fault of his, partly the

1:00:01 > 1:00:05fault of the bank for authorising payment which he did not believe

1:00:05 > 1:00:10could be authorised. His secured loan was turned into an overdraft

1:00:10 > 1:00:15and then he was offered a nine-year sustainable loan to work out the

1:00:15 > 1:00:20dirt, on the condition he paid first a one-year loan without being chased

1:00:20 > 1:00:25for it, -- on the debt. The nine-year loan was never

1:00:25 > 1:00:29forthcoming, he was offered a series of one-year loans, increasingly high

1:00:29 > 1:00:33interest rates with increasingly high charges and effectively he was

1:00:33 > 1:00:42made to work on an ever faster Trent -- treadmill to stay still. He was a

1:00:42 > 1:00:46hard-working man with a successful business. The financial Ms Miller

1:00:46 > 1:00:49ruled against HSBC and said they should restructure the loan on the

1:00:49 > 1:00:53original terms offered and repay the charges made. -- the financial

1:00:53 > 1:00:59ombudsman. The bank's fundamental approach to the small business, it

1:00:59 > 1:01:03was not relationship banking, not an attempt to build a company over the

1:01:03 > 1:01:07long term, it was an attempt to sweat it for everything it was worth

1:01:07 > 1:01:11and push it towards bankruptcy. The second and even more disturbing

1:01:11 > 1:01:16thing, the bank's response to the ombudsman's ruling. Instead of

1:01:16 > 1:01:21complying with the clear spirit of the ruling, the bank seized:

1:01:21 > 1:01:26precision to first retrospectively try to force a much more onerous

1:01:26 > 1:01:29loan onto my constituent, and after a second successful appeal to the

1:01:29 > 1:01:35ombudsman, the bank will still only offer him alone on far more onerous

1:01:35 > 1:01:42terms. Nine years on, he is still in dispute with the bank. His life on

1:01:42 > 1:01:46hold, his home under threat, and despite everything, he has managed

1:01:46 > 1:01:52to keep the business going, good on him, but no thanks to HSBC. The

1:01:52 > 1:01:59victim 's of RBS GRG and other banks, we need a profound change. I

1:01:59 > 1:02:02agree with many of the suggestions other honourable members have made.

1:02:02 > 1:02:08We need an ombudsman or regulator that the banks are more frightened

1:02:08 > 1:02:12of with stiffer penalties, clearer, quicker and more specific remedies.

1:02:12 > 1:02:16Since 2010, we have made real progress in reforming the banking

1:02:16 > 1:02:20sector, we have replaced the system that failed spectacularly, we have

1:02:20 > 1:02:28seen the thanks -- the ring fencing of personal and investment banks, we

1:02:28 > 1:02:32have seen higher capital requirements, measures to increase

1:02:32 > 1:02:39and petition, the tougher claw-back regime but despite the good work

1:02:39 > 1:02:45done, there is a lot to do. The next reform made by the Treasury must be

1:02:45 > 1:02:52a stronger regulatory ombudsman and justice for the small businesses.

1:02:52 > 1:02:57Thank you. Can I congratulate everybody concerned who has been

1:02:57 > 1:03:01involved in bringing this important issue before the House for debate

1:03:01 > 1:03:07today? I first was confronted with some of the issues in my former

1:03:07 > 1:03:13incarnation as former chair of the business, innovation and skills

1:03:13 > 1:03:16select committee when a number of the cases outlined by members today

1:03:16 > 1:03:23were brought to my attention. As I studied them, I think my first

1:03:23 > 1:03:30instinct was to feel that this was just isolated cases of

1:03:30 > 1:03:34maladministration and that banks couldn't possibly be behaving in

1:03:34 > 1:03:42such a way as this that you would assume contravened not only any sort

1:03:42 > 1:03:47of ethical or sense of fairness, but actually would be against the law

1:03:47 > 1:03:50itself. Further investigation and consultation with other members

1:03:50 > 1:03:58demonstrated that what I thought was perhaps one or two isolated

1:03:58 > 1:04:02incidents of maladministration, it was in fact part of a national

1:04:02 > 1:04:07problem as a result of a culture that obviously prevailed within the

1:04:07 > 1:04:13financial service industry, and in many ways, was propped up by other

1:04:13 > 1:04:19professional and corporate organisations, values, receivers,

1:04:19 > 1:04:26and so on, who were making money out of it. Therefore, I particularly

1:04:26 > 1:04:31welcome the emphasis that has been put by a number of members to point

1:04:31 > 1:04:36out that whilst this particular motion focuses on the RBS, it is in

1:04:36 > 1:04:41fact a general and systemic problem that was determined by the fact that

1:04:41 > 1:04:50something like 60% of lending to small and medium enterprises was

1:04:50 > 1:04:56done by two big banking conglomerates, Lloyds and RBS. In

1:04:56 > 1:05:01their actions, they set the culture and tone of the way that banking has

1:05:01 > 1:05:04dealt with small businesses and the way that small businesses perceive

1:05:04 > 1:05:14them. I applaud the motion because it makes it quite clear that whilst

1:05:14 > 1:05:22RBS may have implemented some remedial actions, this is a general

1:05:22 > 1:05:27problem that needs a general solution. I read the minutes of the

1:05:27 > 1:05:33Treasury Select Committee interviews with Andrew Bailey of the Financial

1:05:33 > 1:05:39Conduct Authority and I think one of the most astonishing thing is I read

1:05:39 > 1:05:45in that was the regular comment made by Andrew Bailey that such actions

1:05:45 > 1:05:50were outside the regulatory perimeter. What an astonishing thing

1:05:50 > 1:05:57for somebody in charge of the organisation to actually implement

1:05:57 > 1:06:02regulation to acknowledge that for a long period, banking practices had

1:06:02 > 1:06:08actually gone on outside of any sort of regulatory perimeter, and you

1:06:08 > 1:06:15would reasonably accept such a body to press the Government to pass the

1:06:15 > 1:06:21necessary legislation to alter that. In part, the huge personal and

1:06:21 > 1:06:25economic business problems have arisen because of the failure of

1:06:25 > 1:06:33this body to make that particular case. I think, like many other

1:06:33 > 1:06:39people, historically assumed banks giving loans to businesses did so

1:06:39 > 1:06:42because there was a mutuality of interest, the bank would make money,

1:06:42 > 1:06:46the business would thrive, the country would drive by the economic

1:06:46 > 1:06:51benefits that would bring about. What we have is built into a

1:06:51 > 1:07:00economic system, a process by which those organisations that were

1:07:00 > 1:07:04supposedly providing the lifeblood of our economy driving productivity,

1:07:04 > 1:07:10investment and so on, they were in fact destroying it. And indeed,

1:07:10 > 1:07:17their future depended on them by corporate theft destroying

1:07:17 > 1:07:20financially sound businesses that were providing employment and

1:07:20 > 1:07:29contributing to the economy. The Orwellian ascription of the global

1:07:29 > 1:07:34reorganisation group I think hides the fact that effectively it was

1:07:34 > 1:07:38death row for businesses and that particular structure was mirrored by

1:07:38 > 1:07:43other banks -- the Orwellian description. All of this underlines

1:07:43 > 1:07:50the proposals recommended in this motion which implied that the FCA

1:07:50 > 1:07:54the Government, they must impose a far more Regulus regulatory

1:07:54 > 1:07:58environment to drive the changing culture which is necessary. -- far

1:07:58 > 1:08:02more rigorous. After the next Speaker, the time limit will be

1:08:02 > 1:08:12reduced to minutes. My constituent as well as his family and friends

1:08:12 > 1:08:15have been terrorised by the insolvency professionals that work

1:08:15 > 1:08:24first GRG and Dunbar. He has now had his life. Work taken away. It was a

1:08:24 > 1:08:33development company in South London that had 140 million... Some value

1:08:33 > 1:08:38was 140 million. Along with a thriving youth hostel business. That

1:08:38 > 1:08:53employed 100 people. His father and stepmother, Derek and Ann, also

1:08:53 > 1:08:57constituents of mine, they have now been evicted from their homes and

1:08:57 > 1:09:02numerous other family members and friends have been attacked using

1:09:02 > 1:09:09predatory litigation tactics. The whole family faces complete

1:09:09 > 1:09:17wipe-out. It all started 16 years ago when he became a customer of the

1:09:17 > 1:09:23Romford lending division of NatWest which is now part of RBS. NatWest

1:09:23 > 1:09:27funded his investment business and he was mentored on business

1:09:27 > 1:09:34development by Dunbar. In the third quarter of 2008, GRG started to

1:09:34 > 1:09:42hound him. Despite never missing an interest payment and in a time when

1:09:42 > 1:09:50interest was very difficult. GRG thus managed to get him into

1:09:50 > 1:09:59insolvency by the 1st of June, 2009. The loss of a large proportion of

1:09:59 > 1:10:05the group's cash flow started to cause issues with Dunbar who by

1:10:05 > 1:10:08early 2010 were starting to experience significant problems

1:10:08 > 1:10:14themselves. Zurich moved the bank to their centrally managed business

1:10:14 > 1:10:26division, headed by Mr: homes. To me, my constituent, present today,

1:10:26 > 1:10:32has described this division as an extortion racket. The tactics of GRG

1:10:32 > 1:10:37are starting to be well known, as evident from this debate, but I

1:10:37 > 1:10:45would also like to highlight the far more aggressive actions of Dunbar

1:10:45 > 1:10:52and the systematic destruction of its clients, former loyal staff,

1:10:52 > 1:10:55long-standing suppliers and values. I am very pleased the Treasury

1:10:55 > 1:11:02Select Committee is looking into this matter. My constituent

1:11:02 > 1:11:07describes the current situation with respect to small business lending in

1:11:07 > 1:11:12the UK as utterly unsustainable. I think we all agreed there. Financial

1:11:12 > 1:11:16institutions have been allowed to run riot with the demands of

1:11:16 > 1:11:22personal guarantees in all aspects of business and limited liability

1:11:22 > 1:11:29company may well soon be going into extinction. Combine these points

1:11:29 > 1:11:35with the fact that banks do not seem to be trusted and they have not been

1:11:35 > 1:11:39brought to justice for their actions and we have the perfect storm that

1:11:39 > 1:11:50SMEs. UK productivity cannot improve without a thriving SME sector. We

1:11:50 > 1:11:57have some of the best entrepreneurs in the world and yet we must get the

1:11:57 > 1:12:05banking infrastructure on which they rely sorted out. As well, and I

1:12:05 > 1:12:10stress this, as getting justice for the poor devil 's who have suffered

1:12:10 > 1:12:13so much as a result of these actions. Thank you, Madam Deputy

1:12:13 > 1:12:21Speaker.Thank you.

1:12:21 > 1:12:25A If here today we do not agree there is going to be justice for all

1:12:25 > 1:12:30of those people who've been damaged by the banking crisis, damaged by

1:12:30 > 1:12:35the illegal actions that have taken place across the banks, across those

1:12:35 > 1:12:45organisations that they worked alongside, the valuers, surveyors,

1:12:45 > 1:12:49all the distrust of this House will be valid. It is in our power to give

1:12:49 > 1:12:55them justice. And that justice must start from today. My constituent, Mr

1:12:55 > 1:12:59Smith, ran a small engineering company banking with NatWest for 12

1:12:59 > 1:13:05years. He took out a Morton a new building. It was £180,000. He

1:13:05 > 1:13:11reduced the mortgage because his company was doing well. In fact, it

1:13:11 > 1:13:16was worth £220,000 fairly quickly. He decided to invest in new

1:13:16 > 1:13:23equipment. Unfortunately, when the bank agreed to the investment in the

1:13:23 > 1:13:30new equipment to help him expand, they put a second charge of £80,000

1:13:30 > 1:13:37on his home. Assuring him that this was not a problem because the bank

1:13:37 > 1:13:42would always negotiate with them if the company had any difficulty. Mr

1:13:42 > 1:13:46Smith asked the bank manager if things were OK with the bank. There

1:13:46 > 1:13:51were rumours the bank needed money. But was assured no, no, the NatWest

1:13:51 > 1:14:02was safe as houses. But, as we know, the bank did collapse. Within a

1:14:02 > 1:14:08week, work also collapsed coming into Mr Smith's company. Literally,

1:14:08 > 1:14:13overnight, a £30,000 contract was just closed down. Then he had a

1:14:13 > 1:14:20problem with The Royal Mint. They were supposed to pay into his bank

1:14:20 > 1:14:25account on the Wednesday. Rang him at the last moment saying they'd pay

1:14:25 > 1:14:31on the Thursday. Unfortunately, Mr Smooth had arranged to pay suppliers

1:14:31 > 1:14:36on that same Wednesday. And the bank, instead of doing what they'd

1:14:36 > 1:14:41always done previously and acting reasonably saying, don't worry about

1:14:41 > 1:14:49it, charged him £600 adding to his financial problems. This quickly

1:14:49 > 1:14:57became a huge problem for Mr Smith. He started having phone calls from a

1:14:57 > 1:15:04few different departments. My apologies Madam Deputy Speaker!

1:15:04 > 1:15:11MOBILE PHONE WAS RINGING It did look like it was the Royal Bank of

1:15:11 > 1:15:14Scotland, in fairness. He started have phone calls from departments

1:15:14 > 1:15:21asking him to come in and talk about his loans. This is when he entered

1:15:21 > 1:15:28the GRG bracket. In the end, he was forced to close. Despite going to

1:15:28 > 1:15:34court on numerous occasions and being a litigant in person, RBS

1:15:34 > 1:15:40often didn't send people or they appeared very badly prepared. It was

1:15:40 > 1:15:44only when I finally managed to get through to the bank and criticised

1:15:44 > 1:15:51them that they agreed to meet with Mr Smith. They actually said to him,

1:15:51 > 1:15:56to his wife, sorry, it is not a matter of if we will take your home,

1:15:56 > 1:16:04it is when. Mr Smith and his family have gone through hell. They would

1:16:04 > 1:16:08have been a cornerstone of Britain's economic recovery, like many of the

1:16:08 > 1:16:13companies we've talked about today. Instead of which, trust, confidence

1:16:13 > 1:16:18and belief in the British banking system has been systemically

1:16:18 > 1:16:27destroyed.Thank you. I'm grateful to be able to speak today on an

1:16:27 > 1:16:31issue which has deeply affected so many small and medium-sized

1:16:31 > 1:16:35businesses across the UK. The Royal Bank of Scotland should be one of

1:16:35 > 1:16:40the jewels in the crown of the UK. A principled yet profitable business

1:16:40 > 1:16:44carrying the great name of Scotland, doing business in every corner of

1:16:44 > 1:16:51the globe. Perhaps it was something we could be proud of before 2007.

1:16:51 > 1:16:54However, the actions of the bank uncovered since then have made it

1:16:54 > 1:17:00lose almost all of its credibility. Their O'Global restructuring group

1:17:00 > 1:17:05is responsible for their now bruised brand image. The GRG was responsible

1:17:05 > 1:17:09for stripping businesses deemed to be perfectly viable. Those are not

1:17:09 > 1:17:16my words but those of the Tomlinson report who found GRG artificially

1:17:16 > 1:17:21distresses businesses and they place businesses on a journey towards

1:17:21 > 1:17:25administration, receivership and liquidation. One of their tactics

1:17:25 > 1:17:32was to appoint their own valuers Po appraise assets deliberately

1:17:32 > 1:17:36undervaluing these assets and putting them into GRG even if they

1:17:36 > 1:17:42are were not behind in repayments. My honourable friend described the

1:17:42 > 1:17:45challenges businesses and people have face in the this regard. Anyone

1:17:45 > 1:17:49can see this is something which should be absent from businesses

1:17:49 > 1:17:53practices in the UK. The Royal bank bank the Scotland deny they made any

1:17:53 > 1:17:59money from this. We must remember it was the senior management of the

1:17:59 > 1:18:03bank which created the circumstances for them to be so desperate to lick

1:18:03 > 1:18:09dies so many of the their investments. It must be pointed out

1:18:09 > 1:18:12the Financial Conduct Authority found GRG's action bangs actions

1:18:12 > 1:18:15failed to comply with the bank's own standards. It is only right for the

1:18:15 > 1:18:20FCA to hold them to account and fight on behalf of customers, both

1:18:20 > 1:18:25business or otherwise. Unfortunately, these practices are

1:18:25 > 1:18:36not confined to customers of the of Scotland. UK acorn finance Ltd held

1:18:36 > 1:18:41many in the agricultural industry forcing farmers into bankruptcy or

1:18:41 > 1:18:47eviction. Kev enHolth who farmed in Murray are in their words victims of

1:18:47 > 1:18:51a fraudulent loan scheme which led to the loss of their farm. I'm sure

1:18:51 > 1:18:54there are countless small businesses who see their circumstances

1:18:54 > 1:19:00reflected in the debate today. I think it is also important to

1:19:00 > 1:19:02remember the problems financial difficulties can lead to. It does

1:19:02 > 1:19:07not just leave a hole in the bank balance but leads to mental health

1:19:07 > 1:19:11problems. Causeser rep rabble damages to family and small

1:19:11 > 1:19:19businesses. The businesses affected are not faceless corporations but in

1:19:19 > 1:19:24many cases small family businesses. I'm grateful for what the

1:19:24 > 1:19:28Government's done to continue to fight hard to strengthen the

1:19:28 > 1:19:33financial sector but more needs to be done. Madam Deputy Speaker, as I

1:19:33 > 1:19:41have said, RBS is no stranger to bad news. Bankers' bonuses, branch

1:19:41 > 1:19:47closures highlight a few. Ask my constituents on the recent

1:19:47 > 1:19:51announcements to understand their actions and consequences to local

1:19:51 > 1:19:57about about how they feel. The restruck turret is perhaps their

1:19:57 > 1:20:01most intemp rans since the beginning of the great recession over the last

1:20:01 > 1:20:07decade. It is our duty in this House to stand up for those crushed by the

1:20:07 > 1:20:13immoral acts of this corporation which is now owned by the taxpayers

1:20:13 > 1:20:18of this country.In the brief time available, I want to add my voice to

1:20:18 > 1:20:23those calling for a proper inquiry into this scanned andle a the

1:20:23 > 1:20:28tribunal system dealing with SMEs in difficulty. I want to cite an

1:20:28 > 1:20:35example of my constituency yet, Anthony Molineux, his small business

1:20:35 > 1:20:43was mishandled by RBS over recent years. I could equally cite my

1:20:43 > 1:20:46constituent David Farneden who has been treated appalling by the

1:20:46 > 1:20:55Yorkshire bank. Mr Molineux's case is about profits put before small

1:20:55 > 1:20:59businesses who needed, expected and deserved their support to turn

1:20:59 > 1:21:04businesses around. He estimates at least £1.5 million of assets were

1:21:04 > 1:21:09sold for around £260,000 to make a quick buck for RBS. The problem

1:21:09 > 1:21:13started when he was alerted by one of his tenants there had been an ext

1:21:13 > 1:21:22sign placed outside one of his premises and exteers confirmed RBS

1:21:22 > 1:21:27placed his premises up for ext to claim some of the debts he owed.

1:21:27 > 1:21:32They didn't follow the process, didn't communicate properly, didn't

1:21:32 > 1:21:36give him adequate opportunity to clear his arrears. After a long

1:21:36 > 1:21:41dispute about the amount he owed when he got an agreement in writing,

1:21:41 > 1:21:45RBS came back demanding more money. There are a long list of very

1:21:45 > 1:21:50serious concerns about the process and ethics of the sale suffice to

1:21:50 > 1:21:55say he took his case to the financial ombudsman. The ombudsman

1:21:55 > 1:22:00upheld his complaint. Recognised wrongdoing on the part of RBS but in

1:22:00 > 1:22:04absence of the loan agreements which RBS said couldn't be found, it was

1:22:04 > 1:22:10would be for the courts to decide and the legality of the bank's

1:22:10 > 1:22:15actions which left an onus on him for a risk and expensive court

1:22:15 > 1:22:22process. Six years on, he has not had an add quality settlement for

1:22:22 > 1:22:27his dispute. This is the kind of failings in the FCA report. It is

1:22:27 > 1:22:31very clear from this debate small businesses across the country

1:22:31 > 1:22:36suffered from a system that lax adequate checks and balances. They

1:22:36 > 1:22:40are not erratic incidents. 16,000 companies handled by the global

1:22:40 > 1:22:45restructuring group. Of those only one in ten ever returned to health.

1:22:45 > 1:22:50At the same time, the GRG was becoming one of the most profitable

1:22:50 > 1:22:57sectors for the bank. We've heard it is a systemic failure. The banks

1:22:57 > 1:23:03have failed to recognise the glaring conflict of interests between their

1:23:03 > 1:23:05commercial aims and their obligations to businesses and all of

1:23:05 > 1:23:11us to help small businesses turn around and make a profit. It is very

1:23:11 > 1:23:14clear from this debate my constituency wept's experience is

1:23:14 > 1:23:20one of the many examples where the SMEs have been victims of a banking

1:23:20 > 1:23:24sector focussed solely on profit making and not on supporting their

1:23:24 > 1:23:29customers and our wider economy. It is also clear the financial

1:23:29 > 1:23:32ombudsman is unable to effectively bring to account cases such as the

1:23:32 > 1:23:37ones we've heard today. It lax the power or the authority to prevent

1:23:37 > 1:23:40these examples of corporate greed from happening. But also, the

1:23:40 > 1:23:45authority to bring justice for those affected. In the wake of the FCA

1:23:45 > 1:23:50report, which exposed a widespread failure in the system, the

1:23:50 > 1:23:56Government has to take action off the back of that. I strongly call

1:23:56 > 1:24:02for a select committee inquiry, a proper inquiry and a proper bringing

1:24:02 > 1:24:05to justice of RBS and the other banks on behalf of my and other

1:24:05 > 1:24:14people's constituents.I must first draw the Haweses attention to

1:24:14 > 1:24:17registered interests. I've been in business for 25 years and still am

1:24:17 > 1:24:23today. Our business was once a customer of RBS. Thankfully we

1:24:23 > 1:24:27didn't suffer some of the tragic circumstances many talked about

1:24:27 > 1:24:33today. My confidence officer and honourable gentleman for Norwich

1:24:33 > 1:24:38South clearly set out the case tor our tribunal for which I need to add

1:24:38 > 1:24:45little detail. Not only is this a case of justice, but there's also an

1:24:45 > 1:24:49economic imperative here. We know SMEs are the powerhouse behind our

1:24:49 > 1:24:56economy. 99% of all businesses are SMEs. They employ 60% of our private

1:24:56 > 1:25:06sector workforce. They create 51% of its turnover. Yet, they have

1:25:06 > 1:25:10suffered terribly with these colossal injustices. There is now a

1:25:10 > 1:25:14crisis of confidence between our businesses and our banks. The

1:25:14 > 1:25:21Treasury is doing great work in trying to find funds for companies,

1:25:21 > 1:25:25new companies, scale-ups who cannot borrow. But what about the ones who

1:25:25 > 1:25:28will not borrow because they just don't have the confidence to do so?

1:25:28 > 1:25:36Many of the people in the gallery today can absolutely Griff great

1:25:36 > 1:25:40evidence -- give great evidence, it is the case in their minds and other

1:25:40 > 1:25:46people's business minds. This is not just about RBS but many other banks,

1:25:46 > 1:25:4946789 boss, Lloyds, a number of others. Tens of thousands of

1:25:49 > 1:25:55businesses. Those statistics in tens of thousands mask individual tragic

1:25:55 > 1:26:03stories. These are people's lives and their life's work. My

1:26:03 > 1:26:07constituent, John and Kerry Welsby had a good business. They were

1:26:07 > 1:26:12persuaded they were to take on a loan the bank salesman didn't

1:26:12 > 1:26:17understand. But in the pressure of business you sometimes take these

1:26:17 > 1:26:22loans on. As interest rates fell, the cost of that loan went from

1:26:22 > 1:26:30£6,000 a month to £17,000 a month. It broke that business. Yet, the

1:26:30 > 1:26:34bank decided they'll compensate them for the cost of the loan, a few

1:26:34 > 1:26:38hundred,000ed with, an awful lot of money. But what about the cost of

1:26:38 > 1:26:42the business that's broken. Their life's work. Tense of millions of

1:26:42 > 1:26:45pounds. It is an outrageous injustice. The difficulty, of

1:26:45 > 1:26:50course, as we all know, not only are banks too big to fail, they are too

1:26:50 > 1:26:56big and too wealthy to sue. There is no form of justice available in this

1:26:56 > 1:27:02situation. I do not believe the financial ombudsman scheme service

1:27:02 > 1:27:06could deliver the right solutions we need. We need to look at further

1:27:06 > 1:27:11solutions to provide that means of justice. Our all-party group is

1:27:11 > 1:27:17looking at this tribunal. We need to make sure we get that justice,

1:27:17 > 1:27:21affordable access to justices cheaper because in a tribunal, the

1:27:21 > 1:27:26plative will not have to carry the costs of the defence if they lose.

1:27:26 > 1:27:32It is therefore an accessible form of justice. I believe it can be

1:27:32 > 1:27:33delivered through secondary legislation. We need to look at

1:27:33 > 1:27:40this. We need to do proper research. The all-party group accepts this. We

1:27:40 > 1:27:43cannot countenance, even businesses that have been wronged in this

1:27:43 > 1:27:46process will not countenance, we cannot afford to stem the flow of

1:27:46 > 1:27:51lending. We need to make sure this is the right solution. We need to

1:27:51 > 1:27:55take time, put research into this which we are prepared to do as an

1:27:55 > 1:27:59all-party group. We've support from surprising places in terms of some

1:27:59 > 1:28:02of the financial services industry. We need time from the Treasury to

1:28:02 > 1:28:08work with us to make sure we come up with the right solution for justice

1:28:08 > 1:28:16and to benefit small business and the UK economy.

1:28:16 > 1:28:23I have been dealing with my constituent, George Jones, the ten

1:28:23 > 1:28:29years. George has been a victim of big banks, small banks, dodgy

1:28:29 > 1:28:34accountants, solicitors and values, for the past 13 years. My

1:28:34 > 1:28:38constituent has been let down by all the organisations who should have

1:28:38 > 1:28:46been there to help him and I include various police forces, some PCCs,

1:28:46 > 1:28:51the IPCC, the SRA, FCA and the serious fraud squad. My constituent

1:28:51 > 1:28:55and constituents from around the country are looking to us today as

1:28:55 > 1:28:59parliamentarians as their last hope of gaining justice and I hope we do

1:28:59 > 1:29:04not let them down today. The web of deceit between a whole range of

1:29:04 > 1:29:10organisations is highly complex from the big banks, RBS and Lloyds, to

1:29:10 > 1:29:14the accountants, solicitors and valuers, and I hope to discuss the

1:29:14 > 1:29:19impact of this national stamp as it pertains to George, my constituent,

1:29:19 > 1:29:28and his family -- this national scam. I am reliant on George and his

1:29:28 > 1:29:30friend, an expert in this area, Martin workings. George Jones and

1:29:30 > 1:29:34his family were treated extremely poorly by Barclays. Within days of

1:29:34 > 1:29:41his father suffering a stroke, Barclays were at the farm, stating a

1:29:41 > 1:29:45new bank mandate was immediately required. Barclays lent heavily on

1:29:45 > 1:29:51my constituent, reorganising the finance, not to the benefit of

1:29:51 > 1:29:55George or mutual benefit but the benefit of the bank. They acted with

1:29:55 > 1:29:59indecent haste. Barclays also lent on him for insurance policies,

1:29:59 > 1:30:04saying that if they did not get insured, the interest charges would

1:30:04 > 1:30:09be increased. Barclays effectively turned their back on constituents.

1:30:09 > 1:30:14Then they were forced to go elsewhere for finance. They turn to

1:30:14 > 1:30:18the solicitor Peter Williams, a renowned agricultural solicitor, who

1:30:18 > 1:30:23often featured in the agricultural press. Peter Williams with his

1:30:23 > 1:30:32contacts in solicitors was able to get my constituent's debt down by

1:30:32 > 1:30:37100,000. The cost George and his family were 130,000. They proceeded

1:30:37 > 1:30:42to tie George and his family up in debts and loans and mortgages they

1:30:42 > 1:30:47could not get out. My constituent is now a pensioner and he will likely

1:30:47 > 1:30:54die in harness, he is effectively a slave to the parasitic financial

1:30:54 > 1:31:00organisations. He is just one of 46 cases. As I mentioned, those

1:31:00 > 1:31:03organisations that should have been investigating this have let him

1:31:03 > 1:31:11down, his friend Martin Kohli Martin Wickings has done an analysis -- his

1:31:11 > 1:31:19friend Martin Wickings has done an analysis of these organisations,

1:31:19 > 1:31:23disclosed conflicts of interest, valuation rigging, the payment of

1:31:23 > 1:31:30substantial secret commissions, regulated mortgages advanced on

1:31:30 > 1:31:35unregulated loans, conspiracy to defraud and document forgery, false

1:31:35 > 1:31:44accounting, breach of property Law 1925. In conclusion, I say that

1:31:44 > 1:31:50today in answer to me... Written Parliamentary question, the

1:31:50 > 1:31:56taxpayer, George and others, have paid £144 billion to the banks since

1:31:56 > 1:31:592008, I hope the Treasury Select Committee will pursue this, I hope

1:31:59 > 1:32:04we have an inquiry, I hope the tribunal is set up and I hope Avon

1:32:04 > 1:32:08and Somerset Constabulary will now pursue Burgess Salmond, Acorn group

1:32:08 > 1:32:18and commercial first.Thank you. I rise to congratulate the members for

1:32:18 > 1:32:23Norwich South and North Norfolk to securing this very important debate

1:32:23 > 1:32:26and also I would wish to be associated with their remarks, along

1:32:26 > 1:32:29with the remarks of my right honourable friend, the chairman of

1:32:29 > 1:32:36the Treasury Select Committee. Little did I know when I left school

1:32:36 > 1:32:40at 16 to join the Royal Bank of Scotland as a junior, that years

1:32:40 > 1:32:44later, I would be standing in the House of Commons talking, I'm

1:32:44 > 1:32:47afraid, in negative terms about the Royal Bank of Scotland. Because

1:32:47 > 1:32:52frankly, as was mentioned by one of my colleagues earlier on, the Royal

1:32:52 > 1:32:56Bank of Scotland was one of Scotland's's finest institutions and

1:32:56 > 1:33:03now it badly needs to be restored. I did not know I would end up speaking

1:33:03 > 1:33:07so often in this place about the Royal Bank of Scotland, most

1:33:07 > 1:33:11recently about branch closures in my constituency. There is a theme. The

1:33:11 > 1:33:19Royal Bank of Scotland. The. Small businesses in sterling, no branch to

1:33:19 > 1:33:24interact with in terms of cash management -- Stirling. This is a

1:33:24 > 1:33:27theme of casual disregard and contempt for small and medium-sized

1:33:27 > 1:33:33businesses and that I'm afraid inculcate the RBS's approach to

1:33:33 > 1:33:38business customers. Specifically in relation to the activities of the

1:33:38 > 1:33:45GRG, the FCA report from October, 2017, it makes depressing reading, I

1:33:45 > 1:33:49lost count of the words are inadequate, inappropriate, systemic

1:33:49 > 1:33:53and failure will link to a wide range of activities. I know many

1:33:53 > 1:33:58members will have examples of how the systemic failures have affected

1:33:58 > 1:34:05individuals and IM mindful of the ongoing situations and I have no

1:34:05 > 1:34:09wish to prejudice progress by making reference to them, I simply said

1:34:09 > 1:34:13that from the cases brought to my attention, there remain many

1:34:13 > 1:34:16unanswered questions for the World Bank to address and many injustices

1:34:16 > 1:34:23to be put right. -- the Royal Bank. He mentions he was employed by this

1:34:23 > 1:34:31bank of which he was once very proud. Can he make any comment on

1:34:31 > 1:34:37what has brought us to the position where he is perhaps embarrassed by

1:34:37 > 1:34:40his previous employment?I'm not sure I am embarrassed. What has

1:34:40 > 1:34:45brought us here is frankly a culture which I'm afraid is institutional

1:34:45 > 1:34:49and industrywide, that culture is captured in this document in my hand

1:34:49 > 1:34:54which, thanks to the offices of the select committee, the Treasury

1:34:54 > 1:35:00Select Committee, is now available in public. A document which was

1:35:00 > 1:35:04referred to earlier which contains many sentiments which frankly betray

1:35:04 > 1:35:07the culture of the Royal Bank of Scotland of that is roux and I

1:35:07 > 1:35:19sincerely hope of -- of that era and I sincerely hope not of this era.

1:35:19 > 1:35:24They say it was written in 2009 by a junior bank manager. Frankly, a

1:35:24 > 1:35:28junior bank manager would not have written this kind of document

1:35:28 > 1:35:31without understanding it conformed to the culture of the business they

1:35:31 > 1:35:37were operating in. I'm afraid the chief executive is condemned by his

1:35:37 > 1:35:42own justification which frankly does not wash. In the time I have left, I

1:35:42 > 1:35:47will not try to be harsh, many of the things -- I will not try to

1:35:47 > 1:35:51rehash many of the things already said. I will simply say there is a

1:35:51 > 1:35:57gap in funding support available for small and medium-sized businesses in

1:35:57 > 1:36:01this country and it is holding us back as an economy. These companies

1:36:01 > 1:36:05are the lifeblood, the engine room, of the economy and it is not

1:36:05 > 1:36:09acceptable they do not have recourse to an independent mechanism to which

1:36:09 > 1:36:12they can bring complaints of unfair on and reasonable practices when

1:36:12 > 1:36:16dealing with our financial institutions. Given the appalling

1:36:16 > 1:36:21conduct uncovered in many reports, not just the report that I have

1:36:21 > 1:36:27referenced earlier, there is obviously a failure in respect of

1:36:27 > 1:36:32any kind of compliance to the voluntary code, however much the

1:36:32 > 1:36:35banking lobby may continue to stand by it. In fact, ironically, the

1:36:35 > 1:36:43stronger the lobby funded in part by the inappropriate gains made through

1:36:43 > 1:36:47these frankly immoral practices in relation to small and medium-sized

1:36:47 > 1:36:52businesses, frankly, the stronger the lobby, the more strong is the

1:36:52 > 1:37:00case for an independent body. They had their chance, maybe get -- Madam

1:37:00 > 1:37:06Deputy Speaker, and they have failed, and it is time for this

1:37:06 > 1:37:09Parliament to take responsibility, to step in to act to ensure that

1:37:09 > 1:37:13such an independent body as I have described and others have described

1:37:13 > 1:37:23is created and as quickly as possible because enough is enough.

1:37:23 > 1:37:28As we have heard, this debate is about wider issues going beyond just

1:37:28 > 1:37:31RBS, GRG. I would like to highlight the extent of the problem drawing on

1:37:31 > 1:37:35the experience of my constituent, Derek Carlyle, in the gallery today.

1:37:35 > 1:37:42Can I pay tribute to the former member the first race this case in

1:37:42 > 1:37:49Hall debate on the 10th of March, 2010? The records will show a more

1:37:49 > 1:37:52thorough account. Eight years later, things have moved on significant if

1:37:52 > 1:37:57Derek Carlyle but the issues he faces and the challenges he had to

1:37:57 > 1:38:01overcome remain today. What started as a good relationship with RBS took

1:38:01 > 1:38:05a turn for the worst in 2008 when a promise to provide development

1:38:05 > 1:38:10funding was withdrawn and Mr Carlyle went to fight for ten years in the

1:38:10 > 1:38:12face of relentless intimidation, bullying and underhand tactics by

1:38:12 > 1:38:18RBS. They sought to destroy Mr Carlisle and they almost succeeded.

1:38:18 > 1:38:22The minute plated his personal bank accounts, seized assets, forced his

1:38:22 > 1:38:25company into administration and set about preventing solicitors acting

1:38:25 > 1:38:31on his behalf -- they manipulated. The solicitor at the time found

1:38:31 > 1:38:34themselves under siege, inundated with requests, bombarded with phone

1:38:34 > 1:38:38calls, they were unable to carry out their usual functions and provide a

1:38:38 > 1:38:43service to other clients. They felt they had no option but to cease

1:38:43 > 1:38:49representing Mr Carlisle. Eventually his case was taken by a firm of

1:38:49 > 1:38:51solicitors who first had to seek the permission of RBS to act because

1:38:51 > 1:38:55they did not specialise investigation. He had to go to the

1:38:55 > 1:38:59Supreme Court, the only person to do so, to settle the case, at huge

1:38:59 > 1:39:03financial and personal expense. He lost his business, his house, his

1:39:03 > 1:39:07private life was affected, damage to his reputation, forced to enter

1:39:07 > 1:39:11bankruptcy. The bankruptcy restriction order against him is

1:39:11 > 1:39:16still in place today. He is unable to act as a director of the company,

1:39:16 > 1:39:26unable to borrow more than £500 and unable to become a member of this

1:39:26 > 1:39:29House, should he wish to turn to politics. How can it be fair for

1:39:29 > 1:39:32someone to fight for ten years, be vindicated in the highest court of

1:39:32 > 1:39:33law, and then find themselves

1:39:33 > 1:39:36significantly disadvantaged in what they can do in personal and

1:39:36 > 1:39:41professional life? The legislation controlling bankruptcy is devolved

1:39:41 > 1:39:44and I'm disappointed that the minister in the Scottish bottom

1:39:44 > 1:39:50Parliament has declined to intervene to correct the unfairness -- the

1:39:50 > 1:39:53Scottish Parliament. Most of us would not have the determination or

1:39:53 > 1:39:57strength of character that it took for Derek Carlyle to win his case.

1:39:57 > 1:40:02He was told to give up and he says himself he relies on others who put

1:40:02 > 1:40:07their necks on the line and no small measure of luck. If this can happen

1:40:07 > 1:40:12at a bank 70% owned by the taxpayer, over 70%, it can happen with any

1:40:12 > 1:40:16bank. It shows we have a completely dysfunctional system with the

1:40:16 > 1:40:20balance of favour in favour of not just the banks but professional

1:40:20 > 1:40:27advisers integral to the systems such as surveyors, insolvency

1:40:27 > 1:40:29practitioners and solicitors. Bad behaviour is rewarded because

1:40:29 > 1:40:34outcomes like Mr Carlisle's, they are. It is in the interest of SMEs

1:40:34 > 1:40:38and the banks to sort problem. It is not going away and failing to tackle

1:40:38 > 1:40:42it will push it further down the road and all we need is another

1:40:42 > 1:40:46banking scandal. It is not sustainable for banks to continue to

1:40:46 > 1:40:49act as judge and jury and it should not take what Derek Carlyle had to

1:40:49 > 1:40:54go through to reach a fair outcome. I support the recommendation of the

1:40:54 > 1:40:57fair business banking and we need to bring complaints into the open, we

1:40:57 > 1:41:02need an affordable dispute resolution service, a completely

1:41:02 > 1:41:06independent system sitting outside the regulatory structure with the

1:41:06 > 1:41:10knowledge and power to deal with complex issues. The best way of

1:41:10 > 1:41:14achieving that is with the public tribunal system and I hope members

1:41:14 > 1:41:22across the House will back it.This is clearly an important debate, as

1:41:22 > 1:41:25evidenced by the testimony many members have from the local

1:41:25 > 1:41:32constituencies. About RBS, GRG, and far wider than that. They were not

1:41:32 > 1:41:39alone in facing allegations of mis-selling. And they were not alone

1:41:39 > 1:41:44in treating customers badly at the height of the banking crisis or poor

1:41:44 > 1:41:49addresses. Many members will still have cases of Clydesdale Bank

1:41:49 > 1:41:54mis-selling or cases where redress has not yet been made and where

1:41:54 > 1:41:59constituents may have lost homes, businesses, livelihoods as a result.

1:41:59 > 1:42:03It is also the case, and I think this adds to many of our

1:42:03 > 1:42:07frustrations, and those of our constituents, that some products

1:42:07 > 1:42:11regulated and someone not, some customers were deemed to be

1:42:11 > 1:42:16sophisticated investors while others were not, and overtake regulatory

1:42:16 > 1:42:20environment which may have been sufficient in the good times but

1:42:20 > 1:42:25most certainly was not when the money ran out -- the opaque

1:42:25 > 1:42:28regulator environment. Clearly all the banks came under scrutiny but

1:42:28 > 1:42:33much of the focus was on RBS understandably because they had such

1:42:33 > 1:42:37a large market share. By some measures, the largest bank in the

1:42:37 > 1:42:42world. Not least because allegations surrounding the treatment of

1:42:42 > 1:42:46businesses after they entered the bank's GRG. I will not describe the

1:42:46 > 1:42:51genesis of the products people bought, the honourable member for

1:42:51 > 1:42:57Norwich South described it well. When businesses wished to extract

1:42:57 > 1:43:01themselves, the only way was perhaps to pay substantial sums, larger than

1:43:01 > 1:43:06the capital ever borrowed, in order to escape. But as they were

1:43:06 > 1:43:09distressed themselves, as the economy downturn, it was not

1:43:09 > 1:43:14possible. In the case of RBS, they went into GRG. One would have

1:43:14 > 1:43:18thought, as many have said, it was to help businesses recover, but few

1:43:18 > 1:43:25did.

1:43:25 > 1:43:29Some of those businesses are likely to have failed anyway, but others

1:43:29 > 1:43:36are potentially viable, but the key thing is that some definitely

1:43:36 > 1:43:41experienced actions which were likely to have resulted in material

1:43:41 > 1:43:46financial distress, and that is the key point. One of the reasons, the

1:43:46 > 1:43:49many reasons, this was able to happen, is that in some cases,

1:43:49 > 1:43:54commercial lending was not regulated. To be fair to RBS, it did

1:43:54 > 1:43:58work with the SCA, they have commented a complaint review,

1:43:58 > 1:44:02reveals a trained the team and so William Blackburn and saying that

1:44:02 > 1:44:06the outcomes were not been delivered quickly. -- the FCA. But all of that

1:44:06 > 1:44:10remedial work, and some of it was very good, is undermined by the

1:44:10 > 1:44:14swirling belief that refuses to go away that businesses referred to

1:44:14 > 1:44:22geology were cash poor but asset rich, and in short, the businesses

1:44:22 > 1:44:25were asset stripped. -- GSG. Allegations made all be more

1:44:25 > 1:44:31persuasive by what we now know the GRG did have a commercial objective,

1:44:31 > 1:44:37or that it was part of Project Dash For Cash. What we have seen from the

1:44:37 > 1:44:46Treasury Select Committee, the two memos published, the budget memo and

1:44:46 > 1:44:49another memo for 2008, 2000 nine. I want to support in full the motion

1:44:49 > 1:44:55in front of us, but I want to end, because time is short, on the memo

1:44:55 > 1:45:03from RBS GRG, which says, a customer should transfer to GRG if a

1:45:03 > 1:45:06significant deterioration in any aspect of its activity has happened,

1:45:06 > 1:45:14or where a breach of covenant is likely, or where the missing

1:45:14 > 1:45:18contractual payments to anyone. So even businesses which stuck to the

1:45:18 > 1:45:22terms of the RBS Agreement could be referred, and that, Madam Deputy

1:45:22 > 1:45:29Speaker, was completely wrong.Much as I support calls for a tribunal

1:45:29 > 1:45:33system, the more I listen to this debate, the more I believe there has

1:45:33 > 1:45:39to be much greater involvement of the police and what are clearly

1:45:39 > 1:45:43criminal conspiracies, particularly in relation to perhaps agreements

1:45:43 > 1:45:49between lenders and the banks to drive down the values of properties.

1:45:49 > 1:45:53The honourable gentleman is right, we cannot forget the personal

1:45:53 > 1:45:59disadvantages of small business owners. But this is an attack on the

1:45:59 > 1:46:04whole of the UK economy, and it should therefore be taken seriously

1:46:04 > 1:46:08at criminal international level. My constituent, Graham, had his

1:46:08 > 1:46:12business destroyed by the your show and Clydesdale bank, who unlawfully

1:46:12 > 1:46:18mis-sold tailored business loans to him and two other SME customers.

1:46:18 > 1:46:23This involved widespread unlawful conduct, making attempts to coerce

1:46:23 > 1:46:26their customers into taking on the obligations under the tailored

1:46:26 > 1:46:31business loans. Customers were not told the rainy interest rate swaps

1:46:31 > 1:46:34associated with or forming part of their tailored business loans, nor

1:46:34 > 1:46:39were they given the bank's standard terms and conditions before or at

1:46:39 > 1:46:46the time of entering into the TBL. No mention of early substantial

1:46:46 > 1:46:48termination penalties, allegedly associated with such derivative

1:46:48 > 1:46:57products. As a result of this mass mis-selling, customers of this banks

1:46:57 > 1:46:59have suffered significant financial losses. The liabilities asserted by

1:46:59 > 1:47:04the banks meant became virtually impossible for customers to pay off

1:47:04 > 1:47:08their TBL completely or switch to another borrowing bank, as the

1:47:08 > 1:47:10honourable gentleman from Dundee has already referred. They were

1:47:10 > 1:47:17therefore locked in to victims, these SMEs, and forced to continue

1:47:17 > 1:47:23paying interest rates of up to 7% on these loans, when the base rate was

1:47:23 > 1:47:26reduced to 0.5%. There were subjected to other various forms,

1:47:26 > 1:47:29including the minute relation as I mentioned of property valuations,

1:47:29 > 1:47:37resulting in alleged loan to value ratio of the property, under which

1:47:37 > 1:47:43the loans were pinned. The unlawful reclamation of properties, the

1:47:43 > 1:47:51unfair imposition of inflated bank charges, and the unlawful culling

1:47:51 > 1:47:56enough personal guarantees. It is no wonder that so many small businesses

1:47:56 > 1:48:03and the families that underpinned them have gone under in these

1:48:03 > 1:48:06intolerable systems. Investigating Graham's case and others of my

1:48:06 > 1:48:11constituents, I am absolutely clear that the financial ombudsman service

1:48:11 > 1:48:17is not fit for purpose, perhaps because they lack the skills to

1:48:17 > 1:48:19understand these very conjugated financial instruments, perhaps

1:48:19 > 1:48:25because they are under resourced -- complicated instrument, or perhaps

1:48:25 > 1:48:29because they lack the political will and are too close to the banks. The

1:48:29 > 1:48:33Minister might want to consider that it could be that the legislative

1:48:33 > 1:48:36regime in which they operate is not sufficient either, they do not have

1:48:36 > 1:48:43sufficient scope. One final point, this scandal has been compared to

1:48:43 > 1:48:49the PPI scandal, and I think it is in a legal way beyond that. Adding

1:48:49 > 1:48:55extra money on to somebody's payment protection insurance and then

1:48:55 > 1:48:59skimming some of the top is one thing, but we're driving down and

1:48:59 > 1:49:02crashing down somebody's business in which they and often their families

1:49:02 > 1:49:10have dedicated their lives, is a leader beyond anything that we can

1:49:10 > 1:49:14comprehend. I return to the point that I started with, this is

1:49:14 > 1:49:21criminality and should be dealt with as such. -- a league beyond.I would

1:49:21 > 1:49:25like to join the congratulations to the member of Norwich South for

1:49:25 > 1:49:28securing the debate and to the backbench business committee for

1:49:28 > 1:49:31granted time especially after it was cancelled before Christmas. I think

1:49:31 > 1:49:35it is clear from the contribution today that we could have easily

1:49:35 > 1:49:40filled a whole six hours. There is so much going on, we have all

1:49:40 > 1:49:43started with individual constituents coming to us and starting to realise

1:49:43 > 1:49:46that this is spreading across the entire country. I think that is one

1:49:46 > 1:49:51of the key questions that remains to be answered from this debate, to

1:49:51 > 1:49:57paraphrase the member from North Norfolk, whether this is

1:49:57 > 1:50:04unparliamentary language to say so, whether the behaviour of the RBS GRG

1:50:04 > 1:50:11was a cock-up or a conspiracy. But the decision to seize assets of

1:50:11 > 1:50:13small businesses across the country has caused untold misery to the

1:50:13 > 1:50:17owners and families of these businesses, and has caused genuine

1:50:17 > 1:50:21damage to the economy as a whole. And the fact that we are having this

1:50:21 > 1:50:25debate now is tribute to the campaigners who have raised

1:50:25 > 1:50:28awareness of their MPs and the work of the all-party group, which of

1:50:28 > 1:50:31course includes one of my own constituents, Mr Neil Mitchell who I

1:50:31 > 1:50:37know is watching this debate closely. We have heard many powerful

1:50:37 > 1:50:41testimonies from constituents, and I want to share some of my

1:50:41 > 1:50:46constituent's experiences. Neil was the Chief Executive of a retail firm

1:50:46 > 1:50:52and alleges that the RBS global restructuring group conspired

1:50:52 > 1:50:55unlawfully with a private equity fund in America to engineer the sale

1:50:55 > 1:51:01of his firm or a cut-price £204 million ten years ago, more than ten

1:51:01 > 1:51:08years ago, in June 2000 seven. He alleges systematic institutionalised

1:51:08 > 1:51:11fraud by RBS GRG which have cost him his business, and time and money

1:51:11 > 1:51:15afterwards in his campaign for justice. While I like many mothers

1:51:15 > 1:51:21have been able to table debates -- many members, it is Mr Mitchell who

1:51:21 > 1:51:26has faced the burden of this case. His greater motivation has been to

1:51:26 > 1:51:30support other affected businesses in seeking justice and the

1:51:30 > 1:51:32establishment of a system that means this kind of scandal can never

1:51:32 > 1:51:36happen again. All they really wanted was a meeting with the chief

1:51:36 > 1:51:41executive of RBS, and I wonder how much grief might have been avoided

1:51:41 > 1:51:43if RBS had been willing to meet with constituents and business owners

1:51:43 > 1:51:49much earlier in the game. Instead what he has done is commenced

1:51:49 > 1:51:54private legal action against RBS, reported that to the FCA, launched a

1:51:54 > 1:51:57civil action against the companies involved, and financed a private

1:51:57 > 1:52:00criminal investigation with a view towards a private criminal

1:52:00 > 1:52:04prosecution, and helped play a part in the ripped off campaign, and I

1:52:04 > 1:52:09pay tribute to his dogged determination and those of many

1:52:09 > 1:52:12others campaigners. I think there are some key questions the

1:52:12 > 1:52:16Government needs to answer. Perhaps we all need to reflect on. Most

1:52:16 > 1:52:22importantly, in whose interests were at the decisions of the RBS GRG to

1:52:22 > 1:52:28force these businesses into default? Secured borrowers have been forced

1:52:28 > 1:52:34into default, whether it is an individual or a business, what is

1:52:34 > 1:52:36the primary objective of engineering at the deliberate default on

1:52:36 > 1:52:39stripping assets of businesses that do have long-term potential

1:52:39 > 1:52:44viability? Many of these businesses were stripped of fixed assets which

1:52:44 > 1:52:47realised capital for a state-owned bank, and then individuals were

1:52:47 > 1:52:51forced out of the labour market with all the costs to be state and lost

1:52:51 > 1:52:55to the economy that unemployment brings. So I thoroughly agree with

1:52:55 > 1:52:59all because we dispute mechanism, and indeed for a public enquiry into

1:52:59 > 1:53:04the actions of GRG. Every victim of mis-selling should be given fair and

1:53:04 > 1:53:09equal option to to see fair justice brought forward. Bikes have to

1:53:09 > 1:53:12fulfil their duty to have a public interest at their heart, and that

1:53:12 > 1:53:16has to be put at the heart of banking culture. -- banks have to

1:53:16 > 1:53:23fulfil their duty.I am brittle to be culled on, and I congratulate my

1:53:23 > 1:53:28honourable friend for Norwich South for securing the debate, and for his

1:53:28 > 1:53:32excellent opening speech. He has set a high bar which has been

1:53:32 > 1:53:36consistently matched by Speaker after Speaker in this debate. I wish

1:53:36 > 1:53:43to raise the case of my constituent, who ran two successful businesses. I

1:53:43 > 1:53:51wish to place on record my thanks to her barrister, who was a member here

1:53:51 > 1:53:55between 2010 and 2015 for his extensive briefing and assistance.

1:53:55 > 1:54:07In short, as the 30th of April 2008, her business was placed into

1:54:07 > 1:54:11administration in July 20 16. At the same time, rather business had

1:54:11 > 1:54:17shareholder funds over 60 million. Four years later, it too was placed

1:54:17 > 1:54:23into administration, and then liquidated in 2015. She has by her

1:54:23 > 1:54:27calculations personally lost over £6 million. From the House of Commons

1:54:27 > 1:54:30library briefing, it is clear that the focus of the global

1:54:30 > 1:54:32restructuring group of the Royal Bank of Scotland in many cases was

1:54:32 > 1:54:36to liquidate companies rather than support them. The main charges that

1:54:36 > 1:54:45promoted the realisation of assets, no attempts made to rescue them. The

1:54:45 > 1:54:49brief says, the Tomlinson report makes clear that RBS used its global

1:54:49 > 1:54:52restructuring group to artificially distressed the businesses of a

1:54:52 > 1:54:57significant number of its customers. Accounts were moved to GRG and

1:54:57 > 1:55:01customers charged exorbitant fees and, or forced to ruling has control

1:55:01 > 1:55:05of their businesses. The method used within the Lloyds banking group 's

1:55:05 > 1:55:11London and south-east assets department was to compel customers

1:55:11 > 1:55:13to accept involvement of what they were given to understand was a

1:55:13 > 1:55:20turnaround company. Very high fees related for this service, the

1:55:20 > 1:55:23turnaround company gradually gained control of the business and

1:55:23 > 1:55:27misappropriated its income, before appropriating and or disposing of

1:55:27 > 1:55:34its assets. Lloyd's business support unit based in the city used a

1:55:34 > 1:55:40similar method. In 2009, her account was transferred to Leeds without her

1:55:40 > 1:55:44knowledge. In September 2011, she was told that she must retain the

1:55:44 > 1:55:50services of a third party turnaround company. She was obliged to pay the

1:55:50 > 1:55:56fees charged by that time, which were in excess of over £644,000 for

1:55:56 > 1:56:01some ten months' work. The total taken in costs and fees from my

1:56:01 > 1:56:10constituent Jordan Lay period that our business was in the war is in

1:56:10 > 1:56:17excess of £6 million. She believed that the company working for our,

1:56:17 > 1:56:21but the information provided to her by whistle-blower inside the

1:56:21 > 1:56:26turnaround company, who was appalled that whilst the so-called turnaround

1:56:26 > 1:56:29company was purporting to assist her, it was actually colluding with

1:56:29 > 1:56:36the bank to put the business into administration. At the time, the BSU

1:56:36 > 1:56:39had already decided it could close down her business, it was taking

1:56:39 > 1:56:43millions of pounds from her on the pretence that the business was to be

1:56:43 > 1:56:46turned around. Not only deceitful, but also wrong, and I would have

1:56:46 > 1:56:51thought criminal. In conclusion, part of the motion before us says

1:56:51 > 1:56:56that this House believes that this indicates a systematic failure to

1:56:56 > 1:56:59effectively protect businesses, which has resulted in financial

1:56:59 > 1:57:04scandals, costing tens of billions of pounds. Those losses include my

1:57:04 > 1:57:08constituent. She is still waiting for justice, and I look forward to

1:57:08 > 1:57:14the minister telling me how she will secure it.Can I begin by thanking

1:57:14 > 1:57:21my honourable friend from Norwich South for securing this extremely

1:57:21 > 1:57:23important and vital debate? Small and medium-sized enterprises are the

1:57:23 > 1:57:29backbone of our economy and our communities. The banking industry

1:57:29 > 1:57:33exists to support them, but with the widespread malpractice which plagues

1:57:33 > 1:57:36the sector, this shows that actually they fail catastrophically in these

1:57:36 > 1:57:41responsibilities. Members have given details of the shameful behaviour of

1:57:41 > 1:57:48RBS, but as has been shown today, it is not exclusive to them.

1:57:48 > 1:57:53A constituent of mine has been a customer of Lloyds and the

1:57:53 > 1:57:57consequences of these immoral practices has lost him millions. Mr

1:57:57 > 1:58:02Alan Richards, in the gallery, was once an owner of an extensive

1:58:02 > 1:58:05farming and property business. He became a customer of Lloyds and they

1:58:05 > 1:58:12suddenly without warning transferred his account to the Lloyds recovery

1:58:12 > 1:58:16in Bristol. Mr Richards was left with nothing, losing millions, and

1:58:16 > 1:58:21they took away all of his assets including his home. The manner in

1:58:21 > 1:58:25which they did so is inappropriate, irresponsible and without any real

1:58:25 > 1:58:30explanation. There was little to no support available or any attempt to

1:58:30 > 1:58:35save the business. The solicitors acting on behalf of Lloyds Bank did

1:58:35 > 1:58:39so with intimidation and this respect. Indeed one of Lloyds

1:58:39 > 1:58:49representatives met with... He was on the payroll of the chartered

1:58:49 > 1:58:54surveyors. Alder King. He has raised complaints with the solicitors

1:58:54 > 1:59:02regulatory authority. Each of the regulatory bodies did little to

1:59:02 > 1:59:05nothing to investigate the situation and the constant letters I have had

1:59:05 > 1:59:09with both organisations to save their response has been half baked

1:59:09 > 1:59:13would be an understatement. There has been considerable attention on

1:59:13 > 1:59:18this issue including several debates, the beginnings of a select

1:59:18 > 1:59:25committee, of which in that hearing, the share price of Lloyds Banking

1:59:25 > 1:59:29Group dropped. Perhaps this will make Lloyds listen and realise that

1:59:29 > 1:59:33as members of Parliament, we are going nowhere, nor are our

1:59:33 > 1:59:37constituents. This kind of mistreatment of SMEs by the banking

1:59:37 > 1:59:42sector is a stain on the industry, it is immoral, unjust and

1:59:42 > 1:59:47unfortunately widespread. I hope this debate will mean the Government

1:59:47 > 1:59:51will give due consideration to the oppressive behaviour of Lloyds,

1:59:51 > 1:59:55Alder King, and the regulatory bodies, who are there to deal with

1:59:55 > 1:59:59complaints, and they have utterly failed. I am grateful to the chair

1:59:59 > 2:00:02of the select committee making a speech today and she has said in

2:00:02 > 2:00:07favour of additional work and I have given her notice of this in that I

2:00:07 > 2:00:10am now radio cross-party letter to go to the Treasury Select Committee

2:00:10 > 2:00:15to call for a fuller and wider inquiry into the malpractice of the

2:00:15 > 2:00:20banking sector because this is far beyond one or two banks. The system

2:00:20 > 2:00:23needs to be better regulated to prevent such behaviour and I hope

2:00:23 > 2:00:26the Government will use the examples given in this debate as evidenced to

2:00:26 > 2:00:34do so. As pin fully support the motion put forward today -- I fully

2:00:34 > 2:00:37support. I will try to speak in behalf of my honourable friend for

2:00:37 > 2:00:41Cardiff West who was unable to make it today in the 30 seconds I have

2:00:41 > 2:00:45left. He has a diary clash, he apologises. His constituents have

2:00:45 > 2:00:49suffered losses as a result of the practices of Lloyds Bank and the

2:00:49 > 2:00:53receiver Alder King. He points out experiences of the constituents are

2:00:53 > 2:00:57similar to other cases honourable members have related in previous

2:00:57 > 2:01:08debates on this involving conflicts of interests, actions by banks

2:01:08 > 2:01:10damaging local businesses and an unhealthy culture leading to

2:01:10 > 2:01:12unethical banking practices which have bankrupted many people who

2:01:12 > 2:01:15trusted their bank to act in their interest.I would like to thank my

2:01:15 > 2:01:20honourable friend for Norwich South for securing this debate on this

2:01:20 > 2:01:25important issue. I was shocked when soon after being elected, I was

2:01:25 > 2:01:28approached by a constituent who had been affected by major banks

2:01:28 > 2:01:32employing such unfair and one can say such dishonest practices when

2:01:32 > 2:01:38dealing with their businesses. Although this debate is nominally

2:01:38 > 2:01:43about the practice of RBS, all the evidence shows it is a widespread

2:01:43 > 2:01:46public and financial institutions are preying on businesses who have

2:01:46 > 2:01:50been given little if any protection from regulators either the criminal

2:01:50 > 2:01:54justice system. The financial institutions perpetrating these

2:01:54 > 2:01:59practices are in such a position of power that the Government must look

2:01:59 > 2:02:02at rebalancing the situation. For many people running their own

2:02:02 > 2:02:06businesses not like having a job, it becomes more like part of the

2:02:06 > 2:02:10family. These are businesses people have inherited from family. Or built

2:02:10 > 2:02:17up from an idea and they are everything for many business owners.

2:02:17 > 2:02:22As we have heard from others in the debate, I too have constituents who

2:02:22 > 2:02:27have had businesses destroyed after a lifetime of work. They have lost

2:02:27 > 2:02:30their homes, they have had their families torn apart, lost their

2:02:30 > 2:02:35health and their future. They have been living hand to mouth just so

2:02:35 > 2:02:41some bank account receive their obscene bonus. My constituent Peter

2:02:41 > 2:02:44Way in the gallery today has had his prestigious business employing over

2:02:44 > 2:02:50500 people taken away by a financial services company who are no

2:02:50 > 2:02:56strangers to this type of skulduggery. They put my constituent

2:02:56 > 2:02:59under such undue financial pressure with no warning destroying not only

2:02:59 > 2:03:04his business but nearly his life. This has been carried out right

2:03:04 > 2:03:10across that asset financial sector and on an industrial scale by the

2:03:10 > 2:03:16majority of if not all asset finance companies. Another constituent,

2:03:16 > 2:03:21Brian Evans, who had a business called EP leisure had also been a

2:03:21 > 2:03:25victim of unscrupulous practices by financial institutions. Barclays

2:03:25 > 2:03:32Bank employed a firm of valuers who vastly devalued the land owned by

2:03:32 > 2:03:36him. As a result, this put undue pressure on Mr Evans pulls my

2:03:36 > 2:03:42business. Following reports back to Berkeley 's, the bank decided the

2:03:42 > 2:03:45company was no longer a profitable investment for them in the very same

2:03:45 > 2:03:49company that devalued the land were called in to become receivers

2:03:49 > 2:03:56further the land. This matter is still an ongoing police

2:03:56 > 2:04:00investigation and despite inquiries from Mr Evans himself, my

2:04:00 > 2:04:03predecessor, and indeed his predecessor, we are no further

2:04:03 > 2:04:08forward forgetting just as the Mr Evans. Why are we not getting

2:04:08 > 2:04:13justice? Because business banking remains an unregulated activity.

2:04:13 > 2:04:18Financial service providers can wait out many people who will eventually

2:04:18 > 2:04:23run out of money, time and their sanity. There is no equity in the

2:04:23 > 2:04:27core representation, big banks have big expensive lawyers on their side.

2:04:27 > 2:04:31There is literally know whether people to turn to when this happens

2:04:31 > 2:04:37to them. What can the Government do to stop this scandal hitting our

2:04:37 > 2:04:41SMEs? We need their rapid establishment of an independent

2:04:41 > 2:04:44external service like the financial services Tribunal, as mentioned in

2:04:44 > 2:04:49the motion. There is one shining example of a committed police force

2:04:49 > 2:04:54we have heard about today that acted against HBOS and secured convictions

2:04:54 > 2:04:59for fraud but we need this to be the norm and not just a one-off. SMEs

2:04:59 > 2:05:04provide the backbone of the economy, as we all know. My constituents and

2:05:04 > 2:05:09everyone who sets up a business and puts hours of dedication and hard

2:05:09 > 2:05:13work into the businesses deserve protection from underhand practices

2:05:13 > 2:05:19and I call the Government to act to bring this to an end.Thank you. If

2:05:19 > 2:05:23we did not think before there was a systemic crisis in banking, this

2:05:23 > 2:05:29debate will certainly confirm there is. That actions of the GRG have

2:05:29 > 2:05:32impacted on businesses and jobs in my constituency, I do not want to

2:05:32 > 2:05:36speak as colleagues have about the past mistreatment of customers by

2:05:36 > 2:05:41RBS, but concentrate on the way the bank is continuing to behave today

2:05:41 > 2:05:46towards businesses it has damaged. Some businesses seeking redress from

2:05:46 > 2:05:49RBS may be able to access the compensation scheme the bank

2:05:49 > 2:05:53announced last year, but for those not able to pursue this route, that

2:05:53 > 2:05:57only courses legal action and it is pretty shocking to watch the

2:05:57 > 2:06:02extraordinarily aggressive approach the bank is taking to litigation,

2:06:02 > 2:06:07costs are escalating to such an extent all but the richest litigants

2:06:07 > 2:06:11are unable to pursue their cases, satellite litigation is launched

2:06:11 > 2:06:16against claimants' funders and other third parties, and perhaps most

2:06:16 > 2:06:20shameful, the bank has repeatedly been criticised for failing to

2:06:20 > 2:06:26provide full and frank disclosure in the courts in its defence of claims.

2:06:26 > 2:06:31In 2016, in a well-publicised and ongoing dispute between a property

2:06:31 > 2:06:35group in my constituency and RBS, the bank was expressly criticised by

2:06:35 > 2:06:40the judge in the High Court for taking what she described as, I

2:06:40 > 2:06:44quote, a cavalier attitude to disclosure. Last week, again, the

2:06:44 > 2:06:49case is now on its way to the Appeal Court, the court has again been

2:06:49 > 2:06:53forced to order RBS to hand over more documents, clearly the bank has

2:06:53 > 2:06:57paid no heed to it demands the disclosure. This is not an isolated

2:06:57 > 2:07:03case. There have been other cases where RBS failed to provide full

2:07:03 > 2:07:07disclosure that the court and to the claimant. That is clearly not how

2:07:07 > 2:07:11litigation should be conducted. Equally they are concerns about the

2:07:11 > 2:07:15way the bank is operating, the compensation scheme announced last

2:07:15 > 2:07:19year, £400 million, it sounds generous, but in reality, it does

2:07:19 > 2:07:24not come close to recognising the true extent of the harm caused to

2:07:24 > 2:07:29businesses or the benefit RBS has enjoyed from GRG's activities. The

2:07:29 > 2:07:33compensation fund addresses a limited range of misconduct carried

2:07:33 > 2:07:37out by GRG and available only to a fraction of the businesses that

2:07:37 > 2:07:42suffered. Research currently carried out by the Property Alliance Group

2:07:42 > 2:07:46says the real size of the scheme should be at least ten times its

2:07:46 > 2:07:52current scale, closer to £4 billion. That is because one of the most

2:07:52 > 2:07:57heavily criticised practices carried out by GRG was the process by which

2:07:57 > 2:08:01the bank will lead customers to give away equity stakes in return for

2:08:01 > 2:08:07continued support. These instruments have been criticised widely but they

2:08:07 > 2:08:12were profitable. If we look at the balance sheets and accounts of the

2:08:12 > 2:08:17RBS subsidiary managing the assets, we can see the bank profited to the

2:08:17 > 2:08:24tune of £400 million from the practices, as will be immediately

2:08:24 > 2:08:30apparent, the £400 million from just one area of the bank, it equates to

2:08:30 > 2:08:36the entire size of the compensation scheme. What is more, the accounts

2:08:36 > 2:08:42for the year ending 2016, it showed the bank set aside £40 million in

2:08:42 > 2:08:47practice for the costs associated with the complaints process. While

2:08:47 > 2:08:52Andrew Bailey, the chief executive of the FCA, he told the Treasury

2:08:52 > 2:08:59Select Committee in October last year that RBS had paid at or made

2:08:59 > 2:09:04offers of £150 million, well short of £400 million, and nor is it clear

2:09:04 > 2:09:07that the money has been paid or accepted by claimants. It seems it

2:09:07 > 2:09:15is not just that the duct RBS continues to do all it can to avoid

2:09:15 > 2:09:17responsibilities, far from rebuilding trust, the bank continues

2:09:17 > 2:09:27to treat its customers with disdain. -- RBS continues.I would like to

2:09:27 > 2:09:31congratulate my honourable friend in bringing this debate which is about

2:09:31 > 2:09:37a subject which has cost so many of all of our constituents so much.

2:09:37 > 2:09:40Public dissatisfaction with the conduct and running of the banking

2:09:40 > 2:09:44sector has been one of the dominant themes of the past decade. Much of

2:09:44 > 2:09:51it prompted by the behaviour and the management of RBS. As my honourable

2:09:51 > 2:09:54friend for Stirling pointed out, it is in the news again this week over

2:09:54 > 2:10:00bank closures. Perhaps we should remember it is a wider issue and

2:10:00 > 2:10:05that what we are looking at is really a systemic failure of the

2:10:05 > 2:10:12banking system to protect its own customers. We must not underestimate

2:10:12 > 2:10:16the impact on those customers, each of them an individual, a business

2:10:16 > 2:10:20person, with a family, owners of SMEs have found they are the victims

2:10:20 > 2:10:24of this systemic failure and it has cost them their businesses and in

2:10:24 > 2:10:29some cases their homes. I have a constituent who has been pursuing a

2:10:29 > 2:10:35case for ten years. He has, actually, following a review by the

2:10:35 > 2:10:40Financial Conduct Authority, been awarded compensation. But it is

2:10:40 > 2:10:44compensation he does not believe takes into account the consequential

2:10:44 > 2:10:49losses of having lost his business and his property. The consequential

2:10:49 > 2:10:55losses of having to arrange another loan. He estimates he is now more

2:10:55 > 2:11:02than £1 million worse off than he was before he went into business

2:11:02 > 2:11:08with this national bank. In the decade where he has been pursuing

2:11:08 > 2:11:12his complaint, I am his third Member of Parliament. The third MP to whom

2:11:12 > 2:11:16he has brought his case. Still we are having to argue that the system

2:11:16 > 2:11:22is wrong and needs to be changed. He is typical of businesses caught in a

2:11:22 > 2:11:27trap which does not offer them fair protection of the law. If they want

2:11:27 > 2:11:31to challenge a bank in court, it will be slow, expensive, and if they

2:11:31 > 2:11:35lose, they will have legal costs to pay. That is on top of what the

2:11:35 > 2:11:41original problem may already have cost them. For the banks, where is

2:11:41 > 2:11:44the incentive to avoid malpractice, to obey the law, if you know you

2:11:44 > 2:11:49cannot be challenged because your victim 's cannot afford to take you

2:11:49 > 2:11:54to court? That is exactly the situation that so many of our

2:11:54 > 2:11:58constituents have found themselves in. They want their day in court or

2:11:58 > 2:12:03at least the opportunity to have a legal process decide what is fair.

2:12:03 > 2:12:07Yes, we have the financial ombudsman, but that can only arrange

2:12:07 > 2:12:12fair and reasonable settlements as they see it. What about those who

2:12:12 > 2:12:16feel rightly or wrongly that the fair and reasonable settlement is

2:12:16 > 2:12:23not what they deserve? That they deserve better, that the ombudsman's

2:12:23 > 2:12:29view falls short. That is why I believe, Madam Deputy Speaker, we

2:12:29 > 2:12:34need the tribunal system, a system which will allow the very many small

2:12:34 > 2:12:37and medium-sized enterprises who have been mis-sold and mistreated,

2:12:37 > 2:12:43some would say cheated, by the big banks, the chance to feel the system

2:12:43 > 2:12:47can protect them. It is cheaper, less formal, and you do not need a

2:12:47 > 2:12:53lawyer, and we know it works in other places. The system has failed.

2:12:53 > 2:12:56It allowed malpractice which cost hard-working individuals their

2:12:56 > 2:13:00businesses and their homes.

2:13:00 > 2:13:05And it is an injustice we have an opportunity, indeed AGT, to address,

2:13:05 > 2:13:09and I would ask the House to support this motion. -- eight duty to

2:13:09 > 2:13:15address.I thank the honourable gentleman from Norwich South for

2:13:15 > 2:13:20bringing this forward, Dolby members who have made a contribution, and

2:13:20 > 2:13:22some great personal stories. Unfortunately some very hard stories

2:13:22 > 2:13:32to listen to. In Northern Ireland, SMEs debate to 75% of unemployment,

2:13:32 > 2:13:37and the private sector has clearly taken as a way from the past. Over

2:13:37 > 2:13:44the last period of time, I have written to the FCA, outlining the

2:13:44 > 2:13:48case for the UK SMEs, and I am reminded of the former chair of the

2:13:48 > 2:13:52Treasury Select Committee, who referred to HBOS as the second worst

2:13:52 > 2:14:00failure in British banking history, beta and of course by RBS. -- beaten

2:14:00 > 2:14:03of course. I am also aware of some of the correspondence I have had

2:14:03 > 2:14:09with Mr Bailey, and he referred to a couple of relevant points. Number

2:14:09 > 2:14:14one was the only action referred to in his reply is that the FCA expects

2:14:14 > 2:14:19the issue of consultation in relation to the expanding role of

2:14:19 > 2:14:23the banks. As of last Friday, nothing has happened, so where are

2:14:23 > 2:14:27we again? Everyone is dragging their heels on this one. I feel that the

2:14:27 > 2:14:31FCA board do not have any suggestions or comments either, so I

2:14:31 > 2:14:38would like to say respectfully to Her Majesty 's Government that what

2:14:38 > 2:14:47action will be considered to support the SMEs's a word from my DUP

2:14:47 > 2:14:52colleague, a tribunal is being proposed into the system, that is

2:14:52 > 2:15:00good news. I am also aware that an FOIA that I was able to see,

2:15:00 > 2:15:08complaints have been made about... We have a number of things

2:15:08 > 2:15:14happening. Some 21 of those cases were upheld with thoughts of greater

2:15:14 > 2:15:18than 70 5000. Some recommendations as much as 150,000. But the thing

2:15:18 > 2:15:26is, the successful complainants of businesses, the question is, have