Banking Misconduct and the FCA — House of Commons, 2018-05-10
Topic: Domestic Commerce
Luke Patrick Graham (Conservative, Centre-right): I am conscious of time, Madam Deputy Speaker. I am disappointed that we are having to debate this matter at all today, let alone for the second time this year The section 166 report highlighted that RBS GRG was focused on profit over customer service. I was also interested to note that the Tomlinson report found few examples of businesses entering the RBS GRG then being returned to local management. On a separate, but related, point, in my own dealings with RBS over its closure of three branches in my constituency, it has been clear that customer service is not the bank’s priority I want to touch briefly on how the actions of RBS GRG have impacted upon my constituents. One constituent, who has been in regular contact, is appalled by the conduct of RBS GRG. He ran his own property development business in my constituency and was in the hands of GRG for a number of years. He was so aggrieved by its actions that he produced a 19-page report describing in tragic detail the manner in which RBS denied him the opportunity to rebuild the company after it fell into problems, closed down the company, which he had built from scratch, and tried to evict his entire family from the family home. This is but one example. I know that other Members have many more Small and medium-sized businesses are the backbone of our economy and often the lifeblood of our communities. They employ our constituents and pay the taxes that fund our public services—taxes that were also used to bail out the banks, including RBS. It is bad enough we had to bail them out in the first place; for those banks then actively to undermine the very source of their rescue is a serious moral, as well as legal, issue that we are right to consider and which we must address There is widespread discontent with the banking sector that admittedly is not limited to the actions of RBS but stems from the financial crisis in 2008 and other subsequent high-profile cases, such as that of HBOS Reading. The only way to restore any semblance of confidence in the banking sector is to hold an inquiry into the treatment of SMEs by RBS GRG. I am pleased therefore that the all-party group on fair business banking and finance has called for a public inquiry. I back that call The all-party group has laid out three reforms it believes are necessary to move the sector forward, and I am pleased to support its proposals, especially that for a more rigorous and robust dispute resolution procedure. Currently, victims have only two routes available—one via the Financial Ombudsman Service and one via the courts. As we know, the ombudsman does not always have the scope to deal with cases where compensation is worth more than £150,000, while going through the courts is potentially cripplingly expensive, especially for anyone who has just lost their business Any reform must address and tackle the causes that brought us to this point. It is simply not sufficient to recognise that it happened and compensate accordingly—we must improve the current processes and prevent these issues from ever recurring.