Commercial Financial Dispute Resolution Platform — House of Commons, 2016-12-15
Topic: Domestic Commerce
Michelle Rhonda Thomson (Independent, Unknown): I made a speech in this place on 1 February 2016 on the FCA compensation scheme for interest rate hedging products. I argued then that that scheme was ill thought out and provided no effective redress for businesses that had been made insolvent. To be honest, I was almost tempted to re-read my previous speech because here we are again, although I would have included the new numbers. Whereas in the case of the IRHP scheme 10% of its complainants were insolvent, in the case of RBS Global Restructuring Group that figure is upwards of 75%, with some estimates as high as 94%, yet fundamentally nothing has changed because RBS has already confirmed that it will not deal with the business owners who have lost their livelihood. The too little, too late apology from the chief executive of RBS, Ross McEwan, is not good enough Thanks to the excellent investigative journalism of BuzzFeed and the BBC, the so-called dash-for-cash articles make fascinating, yet harrowing reading. They clearly demonstrate a system that is well ordered and well structured in which the winner takes all. The so called victory emails that were sent to teams in GRG when West Register acquired an asset are a disgrace. That is quite telling because where there is a victor, there is always a loser I am grateful to Nick Stoop of Warwick Risk Management who applies the story of the "Komodo dragon" condition. The Komodo dragon lies in wait at a watering hole where it nips the foot of its prey. The prey escapes, apparently not seriously harmed, but the bite is toxic and the dragon knows that its target will eventually weaken and die. So it is with RBS swaps and GRG. The swaps salesman lands the toxic bite. GRG and West Register then get to tear the client to pieces I concur with Members who spoke about what that means for those people. We can never forget that people are at the heart of what we are trying to do here. Remember what they may have lost—their family home, their business, their livelihood, their future livelihood if they planned for their children to go into the business, their dignity, their pride and often their very self-definition. We know that wider society loses—the wider community, other local businesses that depend on the failed business, its supply chain, creditors, Her Majesty’s Revenue and Customs and local authorities. My hon. Friend the Member for East Lothian (George Kerevan) pointed out the potential emotional impact on individuals who, for years, have to dig deep for resilience and strength, but very often end up with mental health issues or develop physical illnesses. Let us never forget that people have committed suicide as a result of the actions of some of our banks When did we sign up to this? When did we sign up to a taxpayer-owned bank pillaging the assets of our SMEs—the so-called life blood of our economy—or creating a system where victory emails are sent when another department of the same bank asset-strips? We have to ask whether abuses such as those at RBS could have taken place if we had a system where a business owner could simply be heard. I concur again with my hon. Friend that it is a contract between unequals when somebody who has been declared sequestrated or insolvent cannot take on a bank.