Banking Misconduct and the FCA — House of Commons, 2018-05-10
Topic: Domestic Commerce
John Philip Glen (Conservative, Centre-right): First, I congratulate the hon. Member for East Lothian (Martin Whitfield) on securing this debate and thank the Backbench Business Committee for granting it. I have listened carefully to more than 20 speeches and 30 contributions, and I would like to acknowledge the request from the hon. Member for Vale of Clwyd (Chris Ruane) and my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) to address specific cases; I am happy to engage with them on that Considering the developments in the case of RBS Global Restructuring Group since our debate on 18 January, it is absolutely right that we revisit this important subject. As Members across the House have said, small and medium-sized businesses are the backbone of our economy—I grew up in one—and they depend on financial services providers for vital finance through lending, but those transactions must be in the strictest accordance with the law. Let me be clear: wherever that has not been the case, any business affected should be compensated. I have listened carefully to a whole range of stories from Members this afternoon about people who have clearly been badly let down. I had the privilege of meeting hoteliers in the constituency of my hon. Friend the Member for Torbay (Kevin Foster) who were treated in an appalling fashion and given products that were clearly not suited to their needs. That has been replicated in very many cases. I have been moved by the numerous letters I have received from Members on behalf of their constituents, many of whom face significant difficulties as a consequence of their treatment by RBS GRG I want to reassure the House that the Government and the Financial Conduct Authority take this issue very seriously. I understand the frustration about the timing of resolution, and I want to address specifically what I have done as the Minister since January. In March I met Andrew Bailey, chief executive of the FCA, and stressed to him just how important I consider the proper and full resolution of the RBS GRG issue to be, which he agrees with. The skilled person report produced for the FCA stated that there were areas of widespread inappropriate treatment of firms by RBS. That is unacceptable I went on to meet the chief executive of RBS recently, to discuss the range of issues that were raised then and have been raised again today. Following that meeting, I was pleased to receive a letter from the chief executive addressing a number of the points that colleagues have raised today. RBS has committed to setting up an independent appeal process for consequential loss claims, addressing a gap that existed in the redress scheme, and it is discussing with Sir William Blackburne how that process will operate. RBS has also agreed to stand aside —rightly, in my opinion—from any money that might be returned to it from redress paid to liquidated companies and will donate that money to charities supporting small businesses. I welcome those important steps in improving the operation and transparency of the redress scheme for businesses affected by RBS GRG As Members will be aware, the Treasury Committee has published the FCA’s full report on RBS GRG. The FCA is now conducting the second stage of its investigation, which is a more focused investigation into the matters arising from the report. It has moved on quickly, so that we can examine the issues more quickly than if we had gone through an alternative process. I have confidence in the FCA’s approach and direction on this case. I am meeting Andrew Bailey regularly, and I hope that the FCA will conclude its investigation soon, by which I mean in the next eight to 12 weeks. As I mentioned in our debate on this topic in January, I do not wish to complicate the matter further or prejudice any outcomes while the FCA is investigating, but I am very clear that I expect it to conclude its investigations in a very short timeframe The FCA’s independence is vital to its role; it was vital before 2010, and it is vital now. Its credibility, authority and value to consumers would be undermined if it were possible for the Government to intervene directly in its decision making I would like to turn now to the broader issue of alternative dispute resolution methods between SMEs and banks and to some of the issues around professional services that were raised in the debate.