18/01/2018 House of Commons

colleagues for the report.

Thank

you. We now come to backbench

business. Before we begin today's

debates, I should point out to the

house though it is obvious that a

great many people wish to speak this

afternoon and we obviously have

limited time, just under five hours

for two important and heavily

subscribed debates. Sometimes on

Thursdays we are a little bit

lenient with time, but the

recommendation from the backbench

business committee is that the

person moving a motion should take

around 15 minutes of the house's

time. Over the last few weeks that

has risen to well over half an hour,

but today I am going to enforce the

15 minutes or thereabouts limit.

That means about 17 minutes, not 27.

I should also warned the house that

there will be after the motion has

been moved, there will be a limit on

backbench speeches initially of five

minutes, but that is likely to fall

to four minutes. This is good. It is

because there is so much interest in

the subjects that we are debating

this afternoon. The first motion

from the backbench business

committee is on the treatment of

SMEs by RBS global restructuring

group and I am pleased to call Clive

Lewis to move the motion.

Thank you.

Can I just echoed your comments

there, as generous soul as I am when

it comes the interventions, I will

limit the number I take to maybe two

or three if at all possible because

I do understand that the Holocaust

memorial debate afterwards is

critically important but I think

everyone would want to see debated

fully. Nonetheless, there are a lot

of members here on both sides about

that want to speak about an issue

that is clearly something that has

affected very deeply their

constituents and small businesses

across the country. I would like to

thank the honourable members of the

size for their support for this very

important debate today, as well as

the backbench committee for allowing

the time and particularly its chair,

the member for give Ted, who has

made it quite clear to me and others

that he was very keen for this take

place and here it is. As the details

of the various scandals that have

hit our financial services sector

have trickled out over the last

year's, I think we all started by

treating the stories we heard with a

certain level of scepticism. It just

did not seem to make sense. When I

read letters from one of Mike

constituents, my first reaction was

the story he was telling simply

could not be true. No bank could

have dared to have behaved in such

an egregious way. My constituent was

forced by RBS was forced to buy an

interest rate hedging product. RBS

is then placed the business into its

global restructuring group. He lost

his business, his home, his marriage

and I think it fair to say almost

his sanity. His crime nothing more

than being an entrepreneur who

banked with RBS.

Did I thank my

honourable friend but giving way.

Does he agree with me that the RBS

global restructuring group had real

cultural problems. When their top

tips include the phrase rope,

sometimes you just have to let

customers hang themselves, there is

clearly something very wrong

occurring.

I agree. Since 2008, we

note that 16,000 small businesses

were put into GR G and the vast

majority of them were liquidated. I

think that helped you all you need

to know. This was meant to be is

somewhere where they were put back

to try to get them into a situation

where they can come back as a viable

business. Actually, it was more like

an abattoir where they were stripped

and taken apart.

Does he agree with

me that one of the reasons that many

of members in the size funded almost

unbelievable, affecting so many of

our constituents, was because one of

the conditions put on any

settlements of the GR G group raised

with businesses that were in trouble

were gagging orders confidentiality

agreements that has prevented them

from speaking openly about the

plight that they faced questions I

agree.

Some businesses were put into

GRG simply for saying I am not happy

with my bank, I want to move. They

ended up in GRG. Also when we talk

about how they were stressed, this

is a term that I think is something

that the bank used as a wanted as it

saw fit, so many of these businesses

who were there were treated in such

an appalling way and I think you

have raised that point very clearly.

I will just make some progress than

I will take two more. As time has

gone on we have discovered that Andy

Gibbs is not alone. Not even one of

hundreds but one of thousands. As

many members will be where the

stories keep coming. Backed up by

evidence. It is not at the point

where it has become clear we have

not just a series of individual

scandals, but a full systemic danger

that needs to be addressed by this

House. I want to focus briefly on

what got us here, more importantly,

how we work towards a constructive

solution.

Does the honourable

gentleman share my discussed that

four and a happy years after

Secretary of State I referred many

of these cases to the FCA we still

only have an interim report. The BBC

has seen a copy of the final report

which contains the following

incriminating phrase. Management

knew or should ignore and that this

was unintended and coordinated

strategy and that the mistreatment

of business was a result of that.

And that the head of GRG responsible

for that policy, Nathan Bostock, is

now chief executive of Santander.

Thank you. I think it is a valid

point you have raised. One of the

things that I hope we can here today

from the government is action on

this issue. For long enough now

small businesses medium-sized

businesses, many of Mike

constituents are tired of the foot

dragging that has gone on. The

Treasury Select Committee is in

support of this being published.

Even the FCA would probably conclude

it would be helpful if this was

published. It is long overdue that

this was published so people can see

the full scale of what RBS and

potentially other banks have been up

to.

The point he was making earlier

about this being failing businesses,

Mike constituent Andrea Willis who

is with us today, her business was

not failing but the bank absolutely

refuse to accept any kind of funding

for a short term loan payoffs,

attributing it to a larger loan

payoff. J had to come up with the

full cost of multiple loans, around

£635,000, making it completely

impossible for her. That is exactly

what these banks have done, making

it impossible for hard-working

people to run their business when

they were not in trouble in the

first place.

I agree. From my time I

have heard so many similar stories

of companies that have potentially

been forcibly distressed by the bank

and then carved up like a Sunday

roast and just that way. As many

members themselves will be aware of

the stories keep coming, backed up

by evidence. It is now at the point

where it has become clear we have

not just a series of scandals but a

full systemic failure that needs to

be addressed for sub I want to focus

on how we move forward. A series of

achievable and transformative

objectives have been come up with.

My focus today will be on dispute

resolution, restitution and the need

for an independent financial

services Tribunal, one with the

teeth required to tackle complex and

for the individuals involved, life

changing scenarios. I'm only going

to touch briefly on the past as it

is important that we separate the

crises it had into two distinct

phases. The first crisis in 2007 was

a crisis of liquidity. The second

crisis, which we are discussing

today, is a con bug crisis that

spans not only the financial

services industry, but extends to

the role of professional advisers.

These are of the surveyors,

accountants, insolvency

practitioners and solicitors, all

fundamental parts of the matrix and

I will return to the shortly.

Turning to RBS, the recent section

166 FCA report focuses on the years

between 2,000 updates and 2013 when

banks were under extreme pressure to

shore up their balance sheets,

however this behaviour did not

spring up spontaneously. Senior

banking insiders who worked in RBS

in the mid-90s through to the crisis

are clear, the modus operandi of GRG

had been happening for years, prior

to the liquidity crisis. GRG and its

predecessor was known as the

mortuary for businesses as early as

the late 90s. However, during those

heady days of liquidity businesses

might have had an opportunity to

re-bank with competitors once the

liquidity crisis hit, that was the

longer an option and our business

community had to deal with the

consequences which have been ramped

up to an industrial scale ever

since. Although this debate today

headlines with RBS GRG, this is just

a symptom of the underlying issue.

It is hard to find an institution

that is not find itself at the

centre of a con bug scandal and I'm

sure we will hear many of them

today. The APPG has come across

similar incidents from the major

banking institutions. The HBOS

banking scandal may seem easy to put

aside as a few bad apples, but the

reality is this is a consequence of

the same systemic failure for sub

everyone thought they would not get

caught and so it escalated we have

to ask ourselves how the possible

this has gone on for so long

completely unchecked? We should have

got this much sooner. Instead it has

been left to a dedicated group of

individual victims and their

relentless pursuit of this I the

media with people such as Jonathan

Ford, with Sunderland, Tom Warren,

Ian Fraser and Heidi Blake to name

just a few. This is the journalism

that the British public needs, one

that investigates the powerful and

holds them to account.

Even now as we get our heads round

the issue, we're still not properly

addressing the issues. Why? Because

our response has been piecemeal so

far. We have to take a step back and

look at the ecosystem in which such

behaviour managed not to survive but

thrive. I want to mention the

possible scale of this scandal. At

its peak,

GIG had... Some of the businesses

were placed into GIG for no other

reason than they made a complaint

against the bank. So we have to ask

ourselves, how many of those

businesses should have been there in

the first place? A lot has been made

of the fact businesses were

distressed as I said earlier, but

this is a subjective and ambiguous

term. We know that 90% of DRG

administered businesses never made

it back into banking. This is

immeasurable, but we believe the

course to be in the tens of

billions. This is the potential size

of the injustice that has taken

place in this country. It may be the

largest theft anywhere ever. If we

take into account the costs to the

economy of business failure and

businesses unable to grow if few

includes job losses, homes, the loss

of health, relationship and taxes,

we can see that costs are likely to

be immeasurable. Scandals on this

skill cannot happen in a vacuum. The

role of the law of solicitors and

conveyancers must be considered.

Even a consideration -- situation

where everyone is playing the part,

playing to the letter of the law, it

has been a catastrophic outcome. We

have to ask, how was -- how was this

possible? Those of us expect to be

covered by the rule of law, anything

else is the wild West and not

suitable for a successful economy.

The House must tackle the inherent

inequality of power in relationship

between business and lenders. From

the moment business signs a

one-sided contract laden with and

ambiguous terms through its

life-cycle and potentially to

insolvency, there is no independent

and affordable place for a business

to go if they are in dispute with

the lender. They are reliant on the

limited scope of the financial

ombudsman. Various trade

associations and individual

institutions to handle complaints.

The outcome, the public and

businesses see a large group of

powerful institutions and trade

bodies operating from behind castle

walls, with no transparency or

external accountability, except for

an expensive and prohibitive court

process, which is beyond all but

the... When we get ad hoc redress

scheme set up to deal with scandal

such as interest rate hedging

products, GRG and HBOS Reading are

wholly unsatisfactory and

discredited. They appear to be more

cynical exercise in financial

institutions liability rather than a

genuine attempt at restitution. The

exercise is conducted behind closed

is where banks are lighted act as

judge, jury and executioner. The use

of an independent person who the

bank appoints will never instil

trust. It is like a burglar being

able to pick the members of a jury

at the trial. To add insult to

injury, in the case of the interest

rate hedging scheme and the RBS GRG

scheme, the fact the insolvency law

allowed institutions to pay

themselves back for misconduct

springs the process into the realm

of farce. It is a system that does

not instil confidence. The best iron

institutions can say is, trust us,

we are doing the right thing. If you

do not like it, sewers. You only

have to look at the content of

debate today to see that

self-regulation alone is simply not

enough. I want to be clear. Those

who support this and not calling for

extensive regulation, we are calling

for transparency and justice.

Without proper transparency and

accountability, there can be no

trust. Trust is what the financial

sector depends on. Undermine and

pollute it, and it will never

survive. The cold fact is that right

now, in this country, the trust that

once existed has been shattered.

This distrust has become so severe

that it is affecting business. We

need to get a handle on the issues

and look at the ecosystem for

businesses if we are to move on.

Today we are calling for an enquiry

that cuts across departmental lines

and looks at the protections

afforded to business during the life

cycle, so we can map out a long-term

plan to ensure sufficient safeguards

to prevent this ever happening

again. More urgently, we are calling

for a tribunal system to be set up

to deal with financial disputes. A

system similar to that which exists

for employment tribunal is. This

does not require primary

legislation. The legislation already

exists to enable the rapid

establishment of a tribunal, but

needs the political will to carry it

through. Andrew Bailey at the FCA

has openly supported the idea, but

we are concerned that extending the

remit of the ombudsman, as this is

not the right solution for what is a

complex problem. Once established,

the tribunal system will ensure that

banking works better, not just in

the interests of its customers but

for the banking industry itself.

This is important because we all

acknowledge that the financial

sector is critical to the UK's

future prosperity, and the

relationship they have with their

bank is a central Park. In a

regulated economy, the relationships

between small and medium enterprises

should be symbiotic with the finance

sector, not parasitic. This is not

where we are. It is time the

government, the FCA and Parliament

step up to the plate to ensure

businesses get fair treatment and

access to affordable justice. Our

businesses deserve nothing less. Our

economy requires nothing less,

especially at this critical time

with Brexit approaching. This matter

has been left adrift in the

wilderness for too long.

Consequences have been catastrophic

to individual waves and confidence

in the entire financial system. The

introduction of a tribunal system

will help to rebuild the strong

relationships that once existed

between small and medium enterprises

and the banks, helping the growth of

our economy and the international

reputation of the financial sector.

It is important to say that

constructive process has been made.

Stakeholders were brought together

to produce a coherent and ambitious

plan to promote trust. If you

haven't heard it, I would suggest

you do. Working group has been

formed which will be announced in

the near future to discuss and look

at this. Have no doubt, this is an

important first step for businesses

and industry. But it is part of the

jigsaw for this problem. With a

problem this big, only a systematic

open-minded challenge to the status

quo will work with the businesses,

banks and economy. This is an

opportunity to show the economy that

buying the exchanges that take place

here, we can put aside political

point scoring and come together to

work towards a common goal. I

therefore commend this motion to the

House.

There will now be a time

limit of five minutes. Nicky Morgan.

It is a pleasure to follow the

honourable gentleman, and I

congratulate him for securing this

debate. And the support I know he

had with the right honourable member

for North Norfolk at the backbench

committee hearing. The fact that

there are so many members here on

Thursday shows how many have

constituents affected by RBS's

global restructuring group, and

those are the reasons why we're here

those problems. I want to pay

tribute to my constituents who have

been affected and also others who

have contacted me. Those who have

lost homes, their health, their

marriages, and in some cases have

lost far more than that as well. As

we heard from the former Business

Secretary, it is over three years

since the Tomlinson report was

published, leaving an investigator

looking into what happened at GRG.

The previous select committee and

its chairman took evidence from Mr

Tomlinson and RBS. RBS then had to

apologise to the committee for

giving misleading evidence about the

role and debate -- objectives of

GRG. The disclosure of the findings

of the review, the new Treasury

Select Committee, which I'm

privileged to cheer is determined to

consider the work of its -- continue

the work of the predecessor.

I am

grateful. Does she agree that

apologies are simply not good

enough. Many of our constituents who

suffered in their business interests

and personal lives, we need the

enquiry and we need to bring justice

for constituents.

He makes a very

important point, and I think he is

absolutely right. I will come on to

talk about the tribunal, but

starting with sorry takes the sting

out of the situation. Faced with the

continual refusal of the report, we

appointed an independent QC to

review the summary and ensure it was

an accurate summary. The final

summary was published on the 28th of

November last year. Although it is

written in technical language, it

exposed a litany of poor conduct,

dismissive and aggressive relations

with customers, a culture of

deal-making, inadequate and

inappropriate complaint handling,

and the list goes on. Yesterday, a

letter to me, RBS published the memo

we heard in 2009. Given this, it is

unfortunate that the RBS has stated

that the more serious allegations

made against the band have not been

upheld when the FCA published its

interim summary. All agree that what

happened is serious and I am sure

many firms will as well. It is

disappointing RBS, again pressed by

the committee, disclosed it does not

accept many findings and disagrees

and appropriate treatment of small

and medium enterprises will

systematic and widespread. RBS seems

to be isolated a mess, with the FCA

concluding that are supporting the

conclusion. Evidence will be taken

from RBS and affirm that conducted

the review shortly, and I would

encourage all members if they have

not send us -- sent us information

from constituents, I ask that they

will. I take the spirit of the

honourable gentleman's comments,

because he is not just write to look

at what went wrong, but also to the

future. That is where the motion

looks today. We're small and

financially distressed businesses is

concerned, we do not have a

partnership. It is an unbalanced and

potentially exploitative

relationships in which banks can use

illegal firepower to ensure they

are... The concern is that the

government may not be prepared to

consider a legislative solution. I

welcome the Minister discussing this

later. Will the response force us to

consider what legislation might be

required? As we have heard...

Of

course I will give way. I have read

the exchange between herself and the

FCI on this. Does she agree that one

of the things that is of real

concern is the impression that is

conveyed from that correspondence,

that the FCAs rather intimidated --

is rather intimidated by potential

actions, and shouldn't it be the

other way around?

Can I thank them

very much indeed, he makes a valid

point and of course it should be the

other way around. The FCA is the

regulator, and I think this is about

individual case, but also about a

wider message sent to the system of

regulated lending to small and

medium enterprises. There could be a

solution which is a dispute

resolution regime. Suggested by my

honourable friend, who has done very

important work in this area. Another

option would be to bring corporate

lending of a certain size within

perimeter, allowing the FCA to take

action against firms directly for

any failings. These are not mutually

exclusive.

I would welcome the Treasury's

analysis of the costs and benefits

of moving the regulatory perimeter

and I would welcome confirmation the

Treasury do not rule out a

legislative approach, to ensure a

new tribunal or parameter change, if

deemed appropriate. I have heard

your strictures about time, I will

not take up to much more. Geology

was a warning that all was not well.

There is only the advent of the

FCA's senior manager's regime at the

moment to prevent it happening again

-- GRG was a warning. When I hear

people saying they will never trust

a bank again, they will

never ask a bank again for money, it

should be a chilling moment for all

banks involved in lending and

working with SMEs. Bank lending is

an important part of the financial

infrastructure in this country. That

is wider than government stepped in

in the financial crisis in 2008. --

that is why the government. The

Treasury committee will continue to

consider the options available to

provide further protections to SMEs

in dealings with their banks.

I

extend my congratulations to my

honourable friend for securing this

debate and it is a pleasure to

follow the right honourable member

opposite. The most alarming aspect

for me of the issue of the treatment

of SMEs by the banking sector is the

conspiracy of denial which has

existed between banks and the

professional advisors and it has

been reinforced by the institutions

which are supposed to regulate the

financial sector. My constituent is

at the very least a victim of

grossly unethical practice but much

more likely criminal fraud at the

hands of Lloyds Bank. The same bank

behind that HBOS fraud. His case is

a lead case, the backbone of the

select committee inquiry in March

2015, and two Westminster Hall

debate which are led on the 16th of

September 2015 and the 18th of April

last year. When lending to my

constituent was no longer attractive

to Lloyds after the financial crash,

it renege on the lending commitment,

relying on alleged breached loan to

value covenant. That breach was

justified by a down valuation of his

property portfolio worth in excess

of £10 million, that valuation

provided by a firm of chartered

surveyors whose employees were

embedded in Lloyds Bank and who were

then rewarded with lucrative work.

The substantial evidence I have

considered over the last three years

leads me to conclude criminal acts

have taken place followed by a

cover-up by the parties concerned.

Senior management of Lloyds, Alder

King and the royal institute for

chartered surveyors have all refused

to meet me together with my

constituent to discuss his case,

none of them have the guts to sit in

a room with me and my constituent to

listen to his legitimate complaint.

The approach taken by Lloyds

primarily, but also Alder King, has

been to use the gross power

imbalance we have heard about

existing between SMEs and the big

banks to bully and a little less to

the point where at least one of them

has taken his own life. -- bully and

belittle. They obfuscate and a leg,

knowing that if they keep batting

away complaints and the concerns of

the victims, those individuals

eventually capitulate because they

have no choice. I will give way.

Most powerful speech. Both she and

the honourable proposal referred to

that HBOS case, guilty verdicts

delivered on the 30th of January,

does she share my concern and of the

constituents affected that they

still have not settled with Lloyds

Bank a year after those verdicts

have been delivered which goes to

what the honourable lady is saying?

I absolutely agree with him.

Statutory limitation periods are run

down through deliberate delay by the

banks, they know they hold all the

financial cards in this situation

because how can any of the victims

afford to litigate to get proper

redress when they have already lost

their businesses, homes, as a

consequence of the bank's actions?

I

thank her forgiving way. It is

absolutely correct, as in the case

of the constituent I mentioned

earlier, £45,000 at least, it has

taken up all up of her husband's

firefighter pension to try to tackle

this injustice she has undeservedly

been the victim of.

Very powerful

example from my honourable friend,

the gross imbalance of power. Legal

expenses insurance is extortionate

and out of the question so my

constituent was quoted premium in

excess of £1 million insurance cover

for him to litigate against Lloyds.

These deliberate tactics by the

banks to prevent victims getting

redress stink. It stinks. All the

time this is happening, Lloyds

senior executives present public

face claiming to know nothing of

what has gone on. I have copies of

letters written by members of this

House in 2014 to the Lloyds chief

executive, the regulator, formerly

alerting them that if they did not

already know, there were

irregularities in the bank. Lloyds

themselves have an internal report

which they commissioned in

September, 2013, that HBOS and

project Bill Turnbull report

highlighting many acts of

criminality, as well as confirming

the bank knew about that HBOS frauds

as far back as 2008. It has been

maintained by the chairman and the

chief executive of Lloyds that they

had no knowledge, but I am afraid I

do not believe those assertions to

be accurate. It begs the question

that if the bank had knowledge of

the fraud in 2008 and those HBOS

convictions took place in 2017, why

did the bank pursue personal

guarantees on those fraud victim

spent nine years until the case went

to trial? There can only be two

answers. Either the bank is entirely

incompetent or those running it has

not been honest. I am calling today

on the Lloyds chair and the board to

publish the report in its entirety.

Following that HBOS convictions,

those individuals serving a combined

prison sentence of 48 years, why has

there been a failure by Lloyds to

compensate the victims? Similar

practices have been shown to be

prevalent in the Bristol offices of

Lloyds but as yet no police force

has carried out a proper forensic

investigation. Anthony Stansfield,

Police and Crime Commissioner,

behind the successful HBOS

convictions, he is determined to see

a full and proper investigation into

Lloyds Bristol and has passed

evidence to the Avon and Somerset

Police. I am calling today on the

Chief Constable of Somerset and Avon

police to expedite an investigation.

As the evidence of the abuse by the

banks and the conspiracy with their

advisers grows by the day, the banks

cannot say at the highest level that

they were unaware of what was

happening somehow insulated from the

abuses taking place. The chief of

Lloyds, he has made many public

statements, one to the Evening

Standard on the 17th of May last

year, just one, saying he was

unaware of the victim 's peoples

complaints before the fraud trial,

but I understand the Turnbull report

confirms both his knowledge and the

Lloyd's board knowledge of HBOS

criminality. I also have a letter

from the right honourable member

when he was Secretary of State for

Business, confirming he met to

discuss my constituent's case and he

was assured, he had looked into the

case personally, I quote. It appears

he is not as remote from these

victim 's' cases as he claims. It is

imperative we should inform the

inquiry into Lloyds and other banks

including consideration of the

culpability of individuals. It

should also compel full recompense

to those who have been affected by

the abuse and that should be the

subject of genuine independent

third-party administration and not

the Sharad which has developed

around Lloyds handling of the

victims of the Reading H -- HBOS

abuse -- the charade. That is why

support this today.

May I

congratulate the honourable

gentleman for securing this debate?

I was pleased to be a member of the

Backbench Business Committee when

his application came before us and I

think these kind of debates show the

House at its best. I have a

confession to make. I am a

capitalist. But I am a capitalist

who believes in a system that

depends upon sound financial

management. And the systematic

mismanagement and dishonest practice

by the Royal Bank of Scotland in

this case fundamentally undermines

capitalism. We know the behaviour of

the bank was wrong both legally and

morally, as reported in evidence at

the report and by the FCA's skilled

persons report. The injury to

individual businesses and the

business banking system as a whole

has been compounded by the system of

redress being put in place which was

judged by many to be inadequate.

Like many members on both sides of

the house today, I have constituents

affected by this case. Just one such

example of malpractice was the

forced liquidation of a company in

1998, formerly owned by a

constituent of mine, it was a

building and joinery company based

in Stockport. The business customer

of the RBS and used an overdraft

like many other businesses to manage

its cash flow. This overdraft in

1998 was £345,000. Not an

unreasonable amount for a business

of that scale. The company had been

happily trading and growing under

these arrangements for several

years. In February of that year,

Royal Bank of Scotland wrote to him

saying that it wanted to reduce the

overdraft facility to £200,000 and

that the company owed the bank

£700,000, a figure still in dispute

today. Unable to operate in these

restrictive conditions, the company

was moved into RBS's global

restructuring group, according to

RBS, to help repay the money it out.

Whilst under administration of this

group, the bank's advisers

consistently undervalued the

company's assets, simultaneously

overvaluing its liabilities. To

support its claim that the company

was unviable. In July of that year,

they forced the company into

receivership. They engineered the

fall of the company by aggressive

repayment plans allowing

insufficient time to the company

directors to a ploy independent

valuers to prove worth of the assets

and its solvency. My constituent

believes the difference between the

RBS figures and his own were around

£2 million. Knowing that time is

short today and there are many

honourable and right honourable

members who wish to make

contributions, I will simply move on

from the case and put some questions

to the Treasury backbench. A scandal

such as this just like Libor before

it is yet another reason why people

and businesses lose faith in the

banking sector. Faith in the banks

is essential for our faith in the

whole capitalist system which I have

hitherto been proud to defend. This

was organised fraudulent asset

stripping on a massive scale,

leading to the forced liquidations

of many businesses, companies which

people have poured a lifetime of

efforts into, and in the case of my

constituent and many others, the

nest egg for their retirement. RBS

made billions from this activity but

how many lives did they crush in the

process? We especially on the side

of the House rightly told the

country we stand up for hard-working

people. People like my constituent

and hundreds of business owners like

him, they are just such hard-working

people. Yet they have had their

assets stripped by the Royal Bank of

Scotland, they now have very little

to show fit. It is time we stood up

for them. I asked my friend, the

very able and newly appointed

Treasury Minister, whilst Her

Majesty's government has a

controlling stake in the Royal Bank

of Scotland, what is he doing to

ensure the bank does the right thing

by its former customers, both by the

law and by the sense of common

decency which all civilised

businesses ultimately depend on? I

will very happily give way.

The

honourable gentleman is making an

excellent speech. Could I ask him to

widen his ambition in this? What is

clear in the case of my own

constituent, a victim of Lloyds

Bank, this was an industrywide

conspiracy, not confined to one

bank. The lies spread across. On

that basis, it must be more than the

Government using its powers with

respect to a nationalised bank, it

has to be systemic across the whole

of the banking system.

He was quite

right to highlight the broader

practice in the entire banking

sector and I can find my remarks to

the Royal Bank of Scotland given it

was a constituency case, but he is

right in what he says -- and I

confined my remarks. I pay tribute

both again to the honourable member

and my honourable friend for their

assiduous work on it and he was very

generous in giving me an extra

minute by that intervention as well.

I only have one more sentence to say

to the Minister. Simply put it like

this. What does my constituent have

to do to get the money that was

stolen from him?

They're not any

more minutes. Only 24 hours the day.

We cannot by creating interventions

and more minutes. It doesn't happen.

They have to come away from

somewhere else. Gosh, everyone could

do with a spell in the Treasury.

Perhaps I should begin with a

confession I'm not a capitalist but

I do share the honourable

gentleman's hope for fairness. I

want to congratulate my honourable

friend, for Norwich South in

securing this debate. The most is

primarily about RBS. The problem is

far wider than just one bank. At the

heart of this motion is the

proposition that a number of banks

deliberately managed the closure of

businesses to protect their own

interests. In doing so, prioritised

the real eyesation of as sets over

any other outcome. The Tomlinson

report of which we've heard,

suggested a deliberate strategy by

banks. The artificial distress

caused to viable businesses. The

engineering of loan to to value

ratios. The re-evaluation of as sets

downwards to trigger default. The

partnership, not real, but the

situation in which banks had all the

power and businesses had no

meaningful recourse. Professional

advisers and bodies were either

ineffective or took the side or in

some cases, I believe, even aided

the banks. I want to highlight in

the brief time I have two

constituency cases. The first,

Graham Stuart. A builder and

property developer who was courted

for business by Lloyds Bank in 2003.

His accounts were managed locally

and regionally at first and

successfully. The fateful decision

was made to transfer his accounts to

the Bristol business support unit

and that's when his troubles began.

Review periods were shortened.

Repayments were doubled. At every

single stage, charges were added. He

was told to sell some properties and

use Alder kink, Lloyds chosen

valuers who undervalued his

properties systematically. When he

complained, his loans were called

in. I understand that some of the

banks may have accessed the

Government's enTerre price finance

guarantee scheme to cover their

losses. Advisers got their fees. My

constituent, Mr Stewart, was left

with huge debts. He never missed a

payment and he had never been in

arrears. My second constituent is Mr

Benn Warren who was an Allied Dunbar

client. They were sold to zueric

financial services Ltd in 19 8 after

a number of misselling scandals.

Parts were sold on a decade later.

The deposit book attractive, the

loan book less so. Despite

assurances to clients they would not

be materially affected by any

transfer, within 14 days of the

transfer, 95% of loans were declared

to be impaired. 300 people were

affected, including my constituent.

A third were pushed into bankruptcy.

The companies protected themselves

at every stage by betting on the

financial markets as my constituent

described it, it was like selling a

car, then betting on whether or not

it would break down. Mr Warren asks

a simple question for the minister.

Why does the UK allow companies

based in offshore tax havens to

manipulate small and medium

enterprises in this way? It

certainly seems like systematic

manipulation to many, including

myself, it looks like criminality.

Yet, the HBOS Reading fraud cost

Thames Valley Police £7 million to

investigate. Where are the resources

for such a herbing ewe lean task? In

the case of Allied Dunbar victims,

they went to Northumbria Police

economic crime unit who said they

lacked the resources to investigate

and directed them to the Serious

Fraud Office who sent them back to

Northumbria comim crime unit. We

need accountability, transparency,

justice for victims and that

incolludes compensation. We need to

protect SMEs in the future with a

more effective tribunal system. And,

finally, and importantly, we need

the Treasury Select Committee to

continue to take such a keen

interest in this matter.

As a member

of the Treasury Select Committee I

can assure you we are taking a keen

interest. The honourable member from

thine mouth, we are taking a keen

interest. I can say in 2016 an RBS

document leaked to the BBC proved

staff were "asked to search for

companies that could be restructured

or have their interest rates bumped

up" in move 2013, the FCA announced

it concluded that "RBSZ not set out

artificially engineered SMEs to fall

into FRG. There was not a widespread

practice of identifying customers

for transfer for inappropriate

reasons such as their potential

value to GRG" well, all I can say to

that is what absolute balanceder

dash. I will del you why I say that.

Early in 2009, in February, I

received a telephone call from our

RBS bank manager who was looking

after the account of a self-storage

business in Edinburgh we had. He

said quite simply we were going into

default. Our interest rate would be

put up by 6% immediately. They were

looking into other issues and we

would go into GRG. At that time, we

hadn't breached any co-nans. As you

can imagine, I asked him for a

meeting urgently. They'd competed

for the business with Lloyds. We had

a term loan on a building in

Edinburgh of which I was and remain

the major shareholder. That term

loan was 1% over base. Banks don't

want loans on 1% over base in 2009.

We got the meeting. He came in said

they'd remodelled our management

accounts and we were breaching

covenants. I tried to find out how

we were breaching them. He couldn't

tell me. When my book keeper was

giving him a glass of water, looking

over his shoulder, she spotted that

he was using February 2006

management accounts to claim this

breach. Some three years previously.

I showed him the door. Didn't hear

from him again for three weeks. He

came back and told me we were in

breach of our co-nans because our

building had devalued by 40%. We

were immediately going into 6% over

base. I called him in again. Another

meeting. I said we must get the

building revalued. People mentioned

Alder kink and others. Self-storage

was a special business. They wanted

us to use their valuer. I smelt a

rat and insisted it was a

self-storage valuer who was used.

That was £15,000 in cost. They said

we had to bear it. In response I

said, actually, here's the deal. If

the valuation remains the same,

which is fine for our co-nans, or

goes up, you pay it. They were

confident it would go down. When the

valuation came down it had doubled.

They had to pay it. Needless to say,

they were livid. The manager

disappeared from our radar. Then

they proceeded to make things as

impossible and divas possible for

us. No bank wants to loan on 1% over

base. We then tired of RBS and moved

to Handles bank at increased expense

but we'd lost faith in them. I later

learned from a bank manager who'd

moved on and I met in a different

role later that after October 2008

bail-out and when Fred Goodwin left

and Stephen Hester arrived we were

and unsuccessful part of project

dash for cash. The plan was to seize

as sets through perceived default.

Between 2007 and 2012, more than

15,000 companies were moved into GRG

to await their fate. I have no doubt

that many of those customers were

not treated with proper care and

attention from my own experience.

I've not doubt in my mind the

Financial Standards Authority

conclusions I referred to earlier

were wholly wrong and there was

widespread practice of tidifying

customer for transfer to GRG for

inappropriate reasons. ...

Thank

you. Can I ask the honourable

gentleman what his conclusions were

about the cultures prevailing in RBS

at that time and whether it

continues to this day?

I don't know.

I don't deal with them any longer

and I wouldn't on principle. But the

culture at the time was disgraceful.

Actually, my business at that time

was making a profit when they came.

It has made a profit every single

month since then. But it is a good

example of how they tried it on. So,

I will say I was lucky enough to be

a robust enough position to send

them packing. Nonetheless, it was a

very stressful and unpleasant

experience. But for a variety of

reasons, countless thousands were

not as fortunate and many of those

lives were needlessly ruined by the

disgraceful and uncrew louse

behaviour by RBS bank managers up

and down the country. Those

customers deserve redress. I support

the motion.

Thank you. I should say

that that was incredibly powerful

and valuable testimony from the

honourable gentleman. I speak as a

co-sponsor to this debate. I agree

with every word of the member for

Norwich South in his opening

statement. We should be in no doubt

the revelations in the report of

this independent review are

absolutely shocking. That's

incidentally without the revelation

also from my right honourable friend

that the full report says management

knew or should have known it was an

intended and co-ordinated strategy.

And the question is why was that

left out of the summary of the

report? Because it potentially makes

the FCA complicit in the cover-up.

That's incredibly serious and needs

to be considered. Even without that,

the report of the independent review

highlights systematic failures. That

in itself is an incredibly important

conclusion. A failure to if Ulley

recognise and manage conflict of

interest between GRG's twin

objectives of turning around a

business and the financial

contribution of GRG to RBS. The

review concludes that commercial

objective had been the strategic

focus of management. That begs the

question, were they Justin credibly

supered or did they know exactly

what they were doing? If they did

know what they were doing, it

amounts to theft of as sets of

people who were running in many

cases, entirely viable businesses.

Asset stripping as one of the

honourable members opposite

described it. These are people who'd

grafted through their adult lives to

build up their businesses destroyed

by this outragious became your. It

is an extraordinairy scandal. The

catalogue of behaviourout lined in

the review exposed by brave

whistle-blowers demonstrates an

absolutely rotten culture. Victory

emails celebrating ticking an asset

off a business. Incentives to staff

to take more money off stressed

businesses to boost their bonuses.

What of the lawyers' role in this,

in managing that conflict of

interests? The accountants,

auditors. Who was complicit in this

scandal? We need to know. That's why

we need an inquiry to know who is

culpable for this.

He's making a

very powerful SPEP of speech. He

mentioned the relationship between

the FC A&R BS. Is he aware of leaked

board minutes from the FCA. They

Saturdayed they wouldn't release a

full report because they were

concerned about being sued by the

RBS. It question is who is

regulating who in this relationship?

Entirely right. We rely on the

regulator to be powerful and tough

in this situation. The human cost is

incal could you lab. People driven

to suicide. Marriages destroyed.

Health destroyed. Who has been held

to account for this disgusting

behaviour? People and businesses

ruined must have justice. An

independent tribunal is essential,

Government minister, is essential.

It would act as a deterrent to bad

behaviour. There would be

consequences for your actions if you

knew it would go to an independent

tribunal. My constituent, Mark

Wright is an RBS whistle-blower. His

career and health have been

destroyed. He and others are the

heroes of this sorry story. Risking

everything to do the right thing.

Yet, he has also been horribly let

down by the regulator, the FCA who

dismissed his concerns, including

the chief executive Andrew Bailey.

But this week, he won a vital

victory. The complaints commissioner

has ruled that the FCA was wrong to

reveal his name to RBS. What

cavalier disregard of a

whistleblower's rights. They fought

it all the way, this complaint

eventually only apologising right at

the end. The case was brilliantly

pursued by Steve Middleton who

deserves enormous credit. He is now

setting up with others, bank

confident of which I declare an

interest. I am a patron to protect

whistle-blowers and to expose

wrongdoing. But the truth is

whistle-blowers have no real

protection in this country. Contrast

that with the United States. The dog

Frank legislation introduced the

office of the whistle-blower. It is

there to protect whistle-blowers.

They are rewarded financially for

doing the right thing. They are

awarded between 10 prep and 30% of

the sanction collected against the

firm. It can run into millions of

dollars. What a contrast with this

country. We need our own office of

the whistle-blower and

whistle-blowers should be guaranteed

anonymity. They should be rewarded

for their bravery. Maintaining the

integrity of the banking system is a

fundamental importance to all of us.

Whistle-blowers are necessary for

that purpose. My fear is that in the

aftermath of the crash in 2008, all

the focus of the banks, regulator

and Government was on rebuilding

balance sheets and that a collective

blind eye was turned to how that was

achieved and how many victims were

left along the way, business owners

and whistle-blowers. The Government

and the FCA now need to act to clear

up this scandal and to get new

arrangements in place to rebuild

trust in British banking and to give

justice to those ruined by this

outrageous behaviour.

Madam Deputy Speaker, I welcome this

important debate and I congratulate

the honourable member for Norwich

South securing it and I am conscious

of following a powerful speech.

Members on all sides of the House

will be horrified and sickened by

the content of the RBS memo and I

congratulate members of the Treasury

Select Committee for putting it in

the public domain. Gloating and

cruel, it is the symbol of a

profoundly sick culture within that

bank. To give RBS Perdue, I welcome

the £400 million compensation fund

and I welcome the complaints

procedure with a former judge -- to

give RBS Perdue. Sadly the issues

raised by RBS as a number of

honourable members have pointed out

not confined to the bank so I

believe the solutions we need are

indeed industrywide. One of my

constituents had an experience with

HSBC which is exactly of the same

kind as those experienced by RBS.

His business had a cash flow

problem, no fault of his, partly the

fault of the bank for authorising

payment which he did not believe

could be authorised. His secured

loan was turned into an overdraft

and then he was offered a nine-year

sustainable loan to work out the

dirt, on the condition he paid first

a one-year loan without being chased

for it, -- on the debt. The

nine-year loan was never

forthcoming, he was offered a series

of one-year loans, increasingly high

interest rates with increasingly

high charges and effectively he was

made to work on an ever faster Trent

-- treadmill to stay still. He was a

hard-working man with a successful

business. The financial Ms Miller

ruled against HSBC and said they

should restructure the loan on the

original terms offered and repay the

charges made. -- the financial

ombudsman. The bank's fundamental

approach to the small business, it

was not relationship banking, not an

attempt to build a company over the

long term, it was an attempt to

sweat it for everything it was worth

and push it towards bankruptcy. The

second and even more disturbing

thing, the bank's response to the

ombudsman's ruling. Instead of

complying with the clear spirit of

the ruling, the bank seized:

precision to first retrospectively

try to force a much more onerous

loan onto my constituent, and after

a second successful appeal to the

ombudsman, the bank will still only

offer him alone on far more onerous

terms. Nine years on, he is still in

dispute with the bank. His life on

hold, his home under threat, and

despite everything, he has managed

to keep the business going, good on

him, but no thanks to HSBC. The

victim 's of RBS GRG and other

banks, we need a profound change. I

agree with many of the suggestions

other honourable members have made.

We need an ombudsman or regulator

that the banks are more frightened

of with stiffer penalties, clearer,

quicker and more specific remedies.

Since 2010, we have made real

progress in reforming the banking

sector, we have replaced the system

that failed spectacularly, we have

seen the thanks -- the ring fencing

of personal and investment banks, we

have seen higher capital

requirements, measures to increase

and petition, the tougher claw-back

regime but despite the good work

done, there is a lot to do. The next

reform made by the Treasury must be

a stronger regulatory ombudsman and

justice for the small businesses.

Thank you. Can I congratulate

everybody concerned who has been

involved in bringing this important

issue before the House for debate

today? I first was confronted with

some of the issues in my former

incarnation as former chair of the

business, innovation and skills

select committee when a number of

the cases outlined by members today

were brought to my attention. As I

studied them, I think my first

instinct was to feel that this was

just isolated cases of

maladministration and that banks

couldn't possibly be behaving in

such a way as this that you would

assume contravened not only any sort

of ethical or sense of fairness, but

actually would be against the law

itself. Further investigation and

consultation with other members

demonstrated that what I thought was

perhaps one or two isolated

incidents of maladministration, it

was in fact part of a national

problem as a result of a culture

that obviously prevailed within the

financial service industry, and in

many ways, was propped up by other

professional and corporate

organisations, values, receivers,

and so on, who were making money out

of it. Therefore, I particularly

welcome the emphasis that has been

put by a number of members to point

out that whilst this particular

motion focuses on the RBS, it is in

fact a general and systemic problem

that was determined by the fact that

something like 60% of lending to

small and medium enterprises was

done by two big banking

conglomerates, Lloyds and RBS. In

their actions, they set the culture

and tone of the way that banking has

dealt with small businesses and the

way that small businesses perceive

them. I applaud the motion because

it makes it quite clear that whilst

RBS may have implemented some

remedial actions, this is a general

problem that needs a general

solution. I read the minutes of the

Treasury Select Committee interviews

with Andrew Bailey of the Financial

Conduct Authority and I think one of

the most astonishing thing is I read

in that was the regular comment made

by Andrew Bailey that such actions

were outside the regulatory

perimeter. What an astonishing thing

for somebody in charge of the

organisation to actually implement

regulation to acknowledge that for a

long period, banking practices had

actually gone on outside of any sort

of regulatory perimeter, and you

would reasonably accept such a body

to press the Government to pass the

necessary legislation to alter that.

In part, the huge personal and

economic business problems have

arisen because of the failure of

this body to make that particular

case. I think, like many other

people, historically assumed banks

giving loans to businesses did so

because there was a mutuality of

interest, the bank would make money,

the business would thrive, the

country would drive by the economic

benefits that would bring about.

What we have is built into a

economic system, a process by which

those organisations that were

supposedly providing the lifeblood

of our economy driving productivity,

investment and so on, they were in

fact destroying it. And indeed,

their future depended on them by

corporate theft destroying

financially sound businesses that

were providing employment and

contributing to the economy. The

Orwellian ascription of the global

reorganisation group I think hides

the fact that effectively it was

death row for businesses and that

particular structure was mirrored by

other banks -- the Orwellian

description. All of this underlines

the proposals recommended in this

motion which implied that the FCA

the Government, they must impose a

far more Regulus regulatory

environment to drive the changing

culture which is necessary. -- far

more rigorous. After the next

Speaker, the time limit will be

reduced to minutes. My constituent

as well as his family and friends

have been terrorised by the

insolvency professionals that work

first GRG and Dunbar. He has now had

his life. Work taken away. It was a

development company in South London

that had 140 million... Some value

was 140 million. Along with a

thriving youth hostel business. That

employed 100 people. His father and

stepmother, Derek and Ann, also

constituents of mine, they have now

been evicted from their homes and

numerous other family members and

friends have been attacked using

predatory litigation tactics. The

whole family faces complete

wipe-out. It all started 16 years

ago when he became a customer of the

Romford lending division of NatWest

which is now part of RBS. NatWest

funded his investment business and

he was mentored on business

development by Dunbar. In the third

quarter of 2008, GRG started to

hound him. Despite never missing an

interest payment and in a time when

interest was very difficult. GRG

thus managed to get him into

insolvency by the 1st of June, 2009.

The loss of a large proportion of

the group's cash flow started to

cause issues with Dunbar who by

early 2010 were starting to

experience significant problems

themselves. Zurich moved the bank to

their centrally managed business

division, headed by Mr: homes. To

me, my constituent, present today,

has described this division as an

extortion racket. The tactics of GRG

are starting to be well known, as

evident from this debate, but I

would also like to highlight the far

more aggressive actions of Dunbar

and the systematic destruction of

its clients, former loyal staff,

long-standing suppliers and values.

I am very pleased the Treasury

Select Committee is looking into

this matter. My constituent

describes the current situation with

respect to small business lending in

the UK as utterly unsustainable. I

think we all agreed there. Financial

institutions have been allowed to

run riot with the demands of

personal guarantees in all aspects

of business and limited liability

company may well soon be going into

extinction. Combine these points

with the fact that banks do not seem

to be trusted and they have not been

brought to justice for their actions

and we have the perfect storm that

SMEs. UK productivity cannot improve

without a thriving SME sector. We

have some of the best entrepreneurs

in the world and yet we must get the

banking infrastructure on which they

rely sorted out. As well, and I

stress this, as getting justice for

the poor devil 's who have suffered

so much as a result of these

actions. Thank you, Madam Deputy

Speaker.

Thank you.

A If here today we do not agree

there is going to be justice for all

of those people who've been damaged

by the banking crisis, damaged by

the illegal actions that have taken

place across the banks, across those

organisations that they worked

alongside, the valuers, surveyors,

all the distrust of this House will

be valid. It is in our power to give

them justice. And that justice must

start from today. My constituent, Mr

Smith, ran a small engineering

company banking with NatWest for 12

years. He took out a Morton a new

building. It was £180,000. He

reduced the mortgage because his

company was doing well. In fact, it

was worth £220,000 fairly quickly.

He decided to invest in new

equipment. Unfortunately, when the

bank agreed to the investment in the

new equipment to help him expand,

they put a second charge of £80,000

on his home. Assuring him that this

was not a problem because the bank

would always negotiate with them if

the company had any difficulty. Mr

Smith asked the bank manager if

things were OK with the bank. There

were rumours the bank needed money.

But was assured no, no, the NatWest

was safe as houses. But, as we know,

the bank did collapse. Within a

week, work also collapsed coming

into Mr Smith's company. Literally,

overnight, a £30,000 contract was

just closed down. Then he had a

problem with The Royal Mint. They

were supposed to pay into his bank

account on the Wednesday. Rang him

at the last moment saying they'd pay

on the Thursday. Unfortunately, Mr

Smooth had arranged to pay suppliers

on that same Wednesday. And the

bank, instead of doing what they'd

always done previously and acting

reasonably saying, don't worry about

it, charged him £600 adding to his

financial problems. This quickly

became a huge problem for Mr Smith.

He started having phone calls from a

few different departments. My

apologies Madam Deputy Speaker!

MOBILE PHONE WAS RINGING It did look

like it was the Royal Bank of

Scotland, in fairness. He started

have phone calls from departments

asking him to come in and talk about

his loans. This is when he entered

the GRG bracket. In the end, he was

forced to close. Despite going to

court on numerous occasions and

being a litigant in person, RBS

often didn't send people or they

appeared very badly prepared. It was

only when I finally managed to get

through to the bank and criticised

them that they agreed to meet with

Mr Smith. They actually said to him,

to his wife, sorry, it is not a

matter of if we will take your home,

it is when. Mr Smith and his family

have gone through hell. They would

have been a cornerstone of Britain's

economic recovery, like many of the

companies we've talked about today.

Instead of which, trust, confidence

and belief in the British banking

system has been systemically

destroyed.

Thank you. I'm grateful

to be able to speak today on an

issue which has deeply affected so

many small and medium-sized

businesses across the UK. The Royal

Bank of Scotland should be one of

the jewels in the crown of the UK. A

principled yet profitable business

carrying the great name of Scotland,

doing business in every corner of

the globe. Perhaps it was something

we could be proud of before 2007.

However, the actions of the bank

uncovered since then have made it

lose almost all of its credibility.

Their O'Global restructuring group

is responsible for their now bruised

brand image. The GRG was responsible

for stripping businesses deemed to

be perfectly viable. Those are not

my words but those of the Tomlinson

report who found GRG artificially

distresses businesses and they place

businesses on a journey towards

administration, receivership and

liquidation. One of their tactics

was to appoint their own valuers Po

appraise assets deliberately

undervaluing these assets and

putting them into GRG even if they

are were not behind in repayments.

My honourable friend described the

challenges businesses and people

have face in the this regard. Anyone

can see this is something which

should be absent from businesses

practices in the UK. The Royal bank

bank the Scotland deny they made any

money from this. We must remember it

was the senior management of the

bank which created the circumstances

for them to be so desperate to lick

dies so many of the their

investments. It must be pointed out

the Financial Conduct Authority

found GRG's action bangs actions

failed to comply with the bank's own

standards. It is only right for the

FCA to hold them to account and

fight on behalf of customers, both

business or otherwise.

Unfortunately, these practices are

not confined to customers of the of

Scotland. UK acorn finance Ltd held

many in the agricultural industry

forcing farmers into bankruptcy or

eviction. Kev enHolth who farmed in

Murray are in their words victims of

a fraudulent loan scheme which led

to the loss of their farm. I'm sure

there are countless small businesses

who see their circumstances

reflected in the debate today. I

think it is also important to

remember the problems financial

difficulties can lead to. It does

not just leave a hole in the bank

balance but leads to mental health

problems. Causeser rep rabble

damages to family and small

businesses. The businesses affected

are not faceless corporations but in

many cases small family businesses.

I'm grateful for what the

Government's done to continue to

fight hard to strengthen the

financial sector but more needs to

be done. Madam Deputy Speaker, as I

have said, RBS is no stranger to bad

news. Bankers' bonuses, branch

closures highlight a few. Ask my

constituents on the recent

announcements to understand their

actions and consequences to local

about about how they feel. The

restruck turret is perhaps their

most intemp rans since the beginning

of the great recession over the last

decade. It is our duty in this House

to stand up for those crushed by the

immoral acts of this corporation

which is now owned by the taxpayers

of this country.

In the brief time

available, I want to add my voice to

those calling for a proper inquiry

into this scanned andle a the

tribunal system dealing with SMEs in

difficulty. I want to cite an

example of my constituency yet,

Anthony Molineux, his small business

was mishandled by RBS over recent

years. I could equally cite my

constituent David Farneden who has

been treated appalling by the

Yorkshire bank. Mr Molineux's case

is about profits put before small

businesses who needed, expected and

deserved their support to turn

businesses around. He estimates at

least £1.5 million of assets were

sold for around £260,000 to make a

quick buck for RBS. The problem

started when he was alerted by one

of his tenants there had been an ext

sign placed outside one of his

premises and exteers confirmed RBS

placed his premises up for ext to

claim some of the debts he owed.

They didn't follow the process,

didn't communicate properly, didn't

give him adequate opportunity to

clear his arrears. After a long

dispute about the amount he owed

when he got an agreement in writing,

RBS came back demanding more money.

There are a long list of very

serious concerns about the process

and ethics of the sale suffice to

say he took his case to the

financial ombudsman. The ombudsman

upheld his complaint. Recognised

wrongdoing on the part of RBS but in

absence of the loan agreements which

RBS said couldn't be found, it was

would be for the courts to decide

and the legality of the bank's

actions which left an onus on him

for a risk and expensive court

process. Six years on, he has not

had an add quality settlement for

his dispute. This is the kind of

failings in the FCA report. It is

very clear from this debate small

businesses across the country

suffered from a system that lax

adequate checks and balances. They

are not erratic incidents. 16,000

companies handled by the global

restructuring group. Of those only

one in ten ever returned to health.

At the same time, the GRG was

becoming one of the most profitable

sectors for the bank. We've heard it

is a systemic failure. The banks

have failed to recognise the glaring

conflict of interests between their

commercial aims and their

obligations to businesses and all of

us to help small businesses turn

around and make a profit. It is very

clear from this debate my

constituency wept's experience is

one of the many examples where the

SMEs have been victims of a banking

sector focussed solely on profit

making and not on supporting their

customers and our wider economy. It

is also clear the financial

ombudsman is unable to effectively

bring to account cases such as the

ones we've heard today. It lax the

power or the authority to prevent

these examples of corporate greed

from happening. But also, the

authority to bring justice for those

affected. In the wake of the FCA

report, which exposed a widespread

failure in the system, the

Government has to take action off

the back of that. I strongly call

for a select committee inquiry, a

proper inquiry and a proper bringing

to justice of RBS and the other

banks on behalf of my and other

people's constituents.

I must first

draw the Haweses attention to

registered interests. I've been in

business for 25 years and still am

today. Our business was once a

customer of RBS. Thankfully we

didn't suffer some of the tragic

circumstances many talked about

today. My confidence officer and

honourable gentleman for Norwich

South clearly set out the case tor

our tribunal for which I need to add

little detail. Not only is this a

case of justice, but there's also an

economic imperative here. We know

SMEs are the powerhouse behind our

economy. 99% of all businesses are

SMEs. They employ 60% of our private

sector workforce. They create 51% of

its turnover. Yet, they have

suffered terribly with these

colossal injustices. There is now a

crisis of confidence between our

businesses and our banks. The

Treasury is doing great work in

trying to find funds for companies,

new companies, scale-ups who cannot

borrow. But what about the ones who

will not borrow because they just

don't have the confidence to do so?

Many of the people in the gallery

today can absolutely Griff great

evidence -- give great evidence, it

is the case in their minds and other

people's business minds. This is not

just about RBS but many other banks,

46789 boss, Lloyds, a number of

others. Tens of thousands of

businesses. Those statistics in tens

of thousands mask individual tragic

stories. These are people's lives

and their life's work. My

constituent, John and Kerry Welsby

had a good business. They were

persuaded they were to take on a

loan the bank salesman didn't

understand. But in the pressure of

business you sometimes take these

loans on. As interest rates fell,

the cost of that loan went from

£6,000 a month to £17,000 a month.

It broke that business. Yet, the

bank decided they'll compensate them

for the cost of the loan, a few