Commercial Financial Dispute Resolution Platform — House of Commons, 2016-12-15
Topic: Domestic Commerce
Norman Peter Lamb (Liberal Democrats, Centre to centre-left): I am very pleased to support this motion, and I congratulate the hon. Member for East Lothian (George Kerevan) on bringing this vital issue to the attention of Parliament. There is a very clear gap in the framework of protection which needs to be addressed. This amounts to a significant injustice for very many people, and it would be intolerable if that injustice was allowed to go unchallenged. There is a need, clearly, for an effective and timely dispute resolution mechanism. As the hon. Gentleman said, central to any process of delivering justice must be full disclosure. Unless a person has access to all the information, they cannot properly bring their case and achieve justice. It must be a mechanism that is there for both regulated and unregulated financial contracts. The abuse of a proper process incentivises bad behaviour. If the banks know that there is no proper mechanism in place to achieve justice, they are encouraged to behave badly and to engage in sharp practice At the heart of current concerns is the Global Restructuring Group, which was set up by RBS. The stated intention was to put companies into intensive care to turn them around and to restructure their debts if necessary, but many small firms accuse the bank of deliberately forcing companies into distress, as the right hon. Member for Delyn (Mr Hanson) said, so that RBS can strip their assets and profit from their failure. That allegation in itself is akin to theft. On top of that, there is the serious allegation that there was a misuse of public money through the Government’s enterprise finance guarantee scheme. Lawrence Tomlinson, the former adviser to the Department for Business, Innovation and Skills, said: "My fundamental concern is around what businesses were told before being brought into GRG and whether this reflected the true purpose of the division. Many businesses believed that they were in GRG to be helped, when it fact it appears to have been an exercise in restructuring the bank’s balance street, often in conflict with the best interests of that business." That is really serious. When he was in front of the Treasury Committee, he referred to "unnecessarily engineering businesses into default in order to move the business from local relationship management to turnaround divisions such as GRG." He alleged that the purpose was to generate revenue through "fees, increased margins and devalued assets." That is scandalous. They are incredibly serious allegations that must be properly addressed by the Financial Conduct Authority. It seems blindingly obvious that there must be an effective process for delivering justice I want to touch on the human cost. We have heard about owners of small businesses who have lost everything that they have worked for. They are in exactly the same position as any private consumer who has recourse to justice, but these people do not achieve justice. Just imagine what it is like for someone who has lost everything due to the sharp practice of a bank, but who cannot achieve any justice. It destroys people. It is impossible for them to move on. It is incumbent on this House and this Government to ensure that the matter is properly addressed I also wish to address the wellbeing of whistleblowers. I have a constituent, who wishes to remain nameless, who was a highly successful former employee of RBS and who raised concerns repeatedly over a sustained period about improper practice within RBS. It destroyed his health. He ended up leaving on agreed terms simply to end the nightmare that he was going through, but his concerns were not diminished in any way. The whole saga has destroyed this man’s life. He cannot move on, and he has been met by a brick wall. I have written on his behalf to RBS and, on five occasions, I have asked for meetings. I have written to Stephen Hester, Ross McEwan, Baroness Noakes and Sir Howard Davies, and on every occasion my reasonable requests for meetings have been turned down. They hide behind the compromise agreement reached with this man to say that they are not prepared to engage with him at all any further. It seems to be an arrogant and cavalier way to treat a former, highly successful employee. They have a total disregard for the impact on this man’s health My constituent’s conclusion is that it is not safe to blow the whistle. We should be celebrating whistleblowers; they risk everything to expose wrongdoing. They expose awful things that happen in our major financial institutions and they should be protected. I am horrified by the shameful treatment of this man.