RBS Global Restructuring Group and SMEs — House of Commons, 2018-01-18
Topic: Domestic Commerce
Nicky Morgan (Conservative, Centre-right): My hon. Friend makes an important point with his customary passion, and he is absolutely right. I will come on to talk about the tribunal, but he is right that there are significant losses, some of which cannot be quantified. However, sometimes just starting by saying sorry can take the sting out of the situation, but we are still waiting for that Faced with the FCA’s continued refusal to publish the section 166 report, my Committee appointed an independent QC to review the summary and to make sure that it was an accurate reflection of the full report with no material omissions. The FCA’s final summary was finally published on 28 November 2017. Although it is written in neutral and technical language, it exposes a litany of poor conduct, mentioning "insensitive, dismissive and…aggressive" relations with customers and "a culture of deal making…that set little store by the interests of customers" It also referred to "inadequate and inappropriate" complaints handling and a failure to handle "inherent" conflicts of interest—the list goes on. Just yesterday, in a letter to me, RBS published its 2009 "Just Hit Budget!" memo, which we had already heard about. That lifts the lid on a culture at RBS, however much it tries to distance itself from that Given all that, it is unfortunate that the FCA and RBS decided to state that "the most serious allegations made against the bank have not been upheld" when the FCA published its interim summary. I think we all agree that what happened is still very serious, and I am sure that many firms agree It is also disappointing that RBS—again, pressed by the Treasury Committee—has disclosed that it does not accept many of the findings. In particular, it disagrees that inappropriate treatment of SMEs was "systematic or widespread". RBS appears to be isolated on this, with the FCA supporting the conclusions of the independent review The Committee will take evidence from RBS and Promontory, the firm that conducted the review, very shortly. I encourage all Members who have not yet sent us evidence on behalf of constituents to do so. While the Treasury Committee does not consider individual cases, we will keep RBS’s feet to the fire over the functioning of its redress scheme I agree with the spirit of the comments of the hon. Member for Norwich South, too, because he is right to look at not just what went wrong, but the future, as the second half of the motion does. For small, financially distressed businesses, as he said, what we have is not a partnership of equals, but an unbalanced and potentially exploitative relationship in which banks can use their legal and financial firepower to ensure that their interests prevail over those of their customers As we have heard, the FCA told the Committee in October last year that it is considering broadening the scope of the Financial Ombudsman Service, but there is concern that the Government might not be prepared to consider a legislative solution. I would welcome the Minister addressing that point. The House will have to seriously consider whether the FCA solution is merely a sticking plaster, and if so whether the responsibility falls to us, as parliamentarians, to consider what legislation might be required.