RBS Global Restructuring Group and SMEs — House of Commons, 2018-01-18
Topic: Domestic Commerce
Alan Campbell (Labour, Centre-left): Perhaps I should begin with the confession that I am not a capitalist, but I do share the hope of the hon. Member for Hazel Grove (Mr Wragg) for fairness. I congratulate my hon. Friend the Member for Norwich South (Clive Lewis) on securing this debate. The motion primarily relates to RBS, but it acknowledges that the problem goes far wider than just one bank. At the heart of the motion is the proposition that several banks deliberately managed the closure of businesses to protect their own interests and in doing so prioritised the realisation of assets over any other outcome. The Tomlinson report, about which we have already heard, suggested that the banks had a deliberate strategy to artificially distress viable businesses, to engineer loan-to-value ratios to cause a breach and to revalue assets downwards to trigger a default. The banks had all the power and businesses had no meaningful recourse, and professional advisers were either ineffective or took the side of or even aided the banks. In the brief time available to me, I want to highlight two constituency cases. The first is Mr Graham Stewart, a builder and property developer, who was courted for his business by Lloyds bank in 2003. His accounts were successfully managed locally and regionally at first, but then the fateful decision was made to transfer his accounts to the Bristol business support unit, and that is when his troubles began. The review periods on his loans were shortened, repayments were doubled and charges were added at every single stage. He was told to sell some properties and to use Alder King, Lloyds chosen valuer, which systematically undervalued his properties. When he complained, his loans were called in. I understand that some of the banks may have accessed the enterprise finance guarantee scheme to cover their losses, and advisers got their fees, but my constituent was left with huge debts. He had never missed a payment and had never been in arrears My second constituent is Ben Warren, who was an Allied Dunbar client. Allied Dunbar was sold to Zurich Financial Services Ltd in 1998 after several mis-selling scandals, and parts of it were sold on a decade later. The deposit book was attractive, the loan book less so. Despite assurances to clients that they would not be materially affected by any transfer, within 14 days of the transfer, 95% of loans were declared to be impaired. That affected 300 people, including my constituent. A third were pushed into bankruptcy. The companies protected themselves at every stage by betting on the financial market. My constituent described it as like selling a car and then betting on whether it would break down. Mr Warren has a very simple question for the Minister: why does the UK allow companies based in offshore tax havens to manipulate small and medium-sized enterprises in that way? It certainly seems like systematic manipulation. To many, including myself, it looks like criminality The HBOS Reading fraud cost Thames Valley police £7 million to investigate, so where are the resources for such a Herculean task as investigating this situation? Allied Dunbar victims went to Northumbria police’s economic crime unit, which said that it lacked the resources to investigate and directed them to the Serious Fraud Office, which then sent them back to Northumbria police’s economic crime unit. We need accountability; we need transparency; and we need justice for the victims, including compensation. As we have heard, we need to protect SMEs in the future with a more effective tribunal system. Finally, and importantly, we need the Treasury Committee to continue to take a keen interest in the matter.