‘An extraordinary scandal’ - Norfolk MPs lead charge against way RBS treated small businesses
- Credit: Sonya Duncan
Norfolk MPs have slammed the way the Royal Bank of Scotland (RBS) has treated small businesses in an 'extraordinary scandal'.
RBS is accused of deliberately destroying profitable firms so it could seize their assets, something the bank denies.
Norwich South Labour MP Clive Lewis, who led a House of Commons debate on RBS on Thursday, called for an inquiry into how businesses are dealt with when they go into liquidation.
He also wants small businesses to have access to tribunals to get redress from their banks if something goes wrong.
His calls were backed by North Norfolk Liberal Democrat MP Norman Lamb.
You may also want to watch:
Mr Lewis said: 'It is time the Government, the FCA (Financial Conduct Authority) and Parliament step up to the plate to ensure that businesses get fair treatment and access to affordable justice.
'Our businesses deserve nothing less. Our economy requires nothing less.'
The business of Norwich architect Andi Gibbs was destroyed in 2008 when he was forced by RBS to buy something called an Interest Rate Hedging Product to protect his business against rising interest rates.
- 1 Norfolk to feature in Steven Spielberg's Second World War TV series
- 2 Historic seaside pub reveals £60,000 B&B rooms
- 3 Couple turn grain store into 'James Bond' home
- 4 Restaurant boss U-turn after row over trial shift pay
- 5 Couple reveal reason for closing 30-year-old firm
- 6 Partner pays tribute to 'love of my life' after Thorpe stabbing
- 7 Car SOS to feature family who lost father and son
- 8 'Disappointment' for town centre with McDonald's branch closure
- 9 Third time lucky? Couple's plea after dream wedding day cancelled again
- 10 Slight increase in Norfolk coronavirus rates after restrictions eased
But instead it cost his firm thousands of pounds and RBS put his company in its now notorious Global Restructuring Group (GRG).
Mr Gibbs' story, first told by this newspaper in 2016, was raised by Mr Lewis during the debate in Parliament.
The MP said when he first heard Mr Gibbs' story he didn't believe it could be true.
But Mr Lewis said: 'The stories keep coming, backed up by evidence. It's now at the point where it's become clear we have not just a series of individual scandals, but a full, systemic failure that needs to be addressed by this House.'
Ten years later, Mr Gibbs is still going through the appeals process to get redress from RBS.
Co-sponsoring the debate, Mr Lamb accused RBS' GRG unit of having a 'rotten culture', while it was operating from 2008 to 2013.
'If they (GRG) did know what they were doing, it amounts to theft of assets from people who were running entirely viable businesses,' he said. 'It is an extraordinary scandal.'
On behalf of the Government, John Glen MP, economic secretary to the Treasury, said he would 'stop at nothing to improve the situation' and nothing would be ruled out.
•What is the GRG scandal?
RBS has long been dogged by allegations that it intentionally pushed small businesses to fail through its Global Restructuring Unit (GRG) in the hope of picking up their assets.
The bank said that, 'in some areas, it could have done better' for GRG customers but it denies it deliberately caused businesses to fail.
Companies put into the GRG rarely made it out again.
That prompted Mr Lewis in Parliament on Thursday to compare GRG to an 'abattoir' for businesses.
The allegations date from 2008 to 2013 but are still harming the bank today.
An internal RBS memo from 2008 made headlines on Wednesday for urging managers to let struggling business customers 'hang themselves'.
In November 2016 RBS announced a GRG complaints and refund process for some of those affected.
But former RBS customer Andi Gibbs, from Norwich, is yet to get any redress from that process.
•Bank watchdog says sorry to whistleblower
During the House of Commons debate on Thursday, Mr Lamb called for more protection for bank whistleblowers.
He told of the case of Mark Wright, from North Norfolk, who worked as a manager at RBS and alleged files were being falsified.
His allegations were denied by RBS and found to be 'groundless' by watchdog the Financial Conduct Authority (FCA).
But the FCA has now had to apologise to Mr Wright for revealing his identity to RBS in 2013.
The FCA sought to justify revealing his name by saying that Mr Wright had already taken his allegations to RBS and to 'public figures'.
But the Financial Regulators Complaints Commissioner, which handles complaints against watchdogs, ordered the FCA to apologise and said its arguments were 'unconvincing'.
Mr Wright said the Commissioner's decision was 'an excellent start' to the campaign to protect whistleblowers.
Mr Wright and Mr Lamb have now formed a service for whistleblowers called Bank Confidential.