Business Banking Resolution Service

Tuesday 11th July 2023 Westminster Hall

[Mark Pritchard in the Chair]

14:30

[Mr William Wragg (Hazel Grove) (Con)]

I beg to move,

That this House has considered the Business Banking Resolution Service.

It is an extraordinary pleasure to serve under your chairmanship, Mr Pritchard, and to welcome the Minister, shadow Ministers—the hon. Member for Hampstead and Kilburn (Tulip Siddiq) and the right hon. Member for Dundee East (Stewart Hosie)—and an extremely able Parliamentary Private Secretary, the hon. Member for Totnes (Anthony Mangnall), who will no doubt pass notes diligently.

I hope to outline how and why the Business Banking Resolution Service has failed to restore trust between small and medium-sized enterprises and their lenders, or to resolve a meaningful number of complaints. I also hope to outline alternative proposals that might achieve those goals. According to “Scale up to level up”, a 2021 report by the all-party parliamentary group on fair business banking, 73% of small businesses would rather grow more slowly than borrow. That is a worrying trend that needs to be reversed.

Empowering businesses to borrow with confidence can only be good news for our economy. A healthy SME lending market depends on trust and confidence that things will be put right if they go wrong. As has been stated in this place many times, most transactions between businesses and their financial service providers, including the majority of commercial lending, are neither regulated nor covered by consumer protection laws. The power imbalance between SMEs and banks and other large financial firms leaves small businesses vulnerable to poor treatment. It is, therefore, vital that SMEs have access to independent and effective dispute resolution services when they are in dispute with their lenders. The Treasury Committee’s 2018 “SME Finance” report was clear on that:

“We must introduce a system for dispute resolution and redress that gives the UK’s SMEs the confidence to engage with financial services providers, safe in the knowledge that they are not vulnerable to exploitation and mistreatment.”

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I congratulate the hon. Member on securing this debate. Support for the BBRS is limited; many have stated that a new alternative resolution scheme should be created. Does the hon. Member agree that any new scheme should seek not to burden the tribunal system, by requiring parties first to seek agreement through mediation services?

[Mr Wragg]

The hon. Lady makes a valid, important and sensible point. I will touch on a suggestion towards the end of my remarks.

In the course of its inquiry, the Treasury Committee considered the long-standing and very large gap in provision of a financial dispute resolution service for SMEs, between those eligible to refer a complaint to the Financial Ombudsman Service and those with access to enough money, appropriate legal representation, and sufficient courage and time to be able to sue their bank. A similar shortfall was identified in the APPG’s “Fair Business Banking for All” report.

[Kirsten Oswald (East Renfrewshire) (SNP)]

We should not underestimate the hon. Member’s point about the unreasonableness of expecting those who find themselves in that situation to have huge amounts of courage. I want to make that point on behalf of my constituents who have huge amounts of patience, courage and grit to right what in their case has been a very significant wrong. They would absolutely like to see an independent tribunal service. They describe the current system as a shambles and I do not disagree with them. Their trust is completely shattered by any measure. All of the resolution processes have failed. Does the hon. Member agree that there are people all over the UK who deserve significantly better?

[Mr Wragg]

Absolutely so. The courage of those small and medium-sized business owners is not to be underestimated. I have dealt with constituents whose cases go back decades. They have had more than patience; they have had the utmost resilience. Many would have given up by now, but such is the injustice—the wrongs that we need to right—that we must, on their behalf, respond with similar courage.

The expansion of the remit of the Financial Ombudsman Service in 2019 to include more SMEs and increase the maximum award level narrowed the gap to some extent, but did not close it. Neither has the gap been plugged successfully by the ad hoc redress schemes established by banks in the years following the 2007 financial crisis for those impacted by scandals such as the interest rate hedging product mis-selling, the mistreatment of small business customers by the Royal Bank of Scotland Global Restructuring Group and the HBOS Reading fraud.

The schemes that have been set up have all been heavily criticised for, among other things, a lack of independence and overly restrictive eligibility criteria. It was against that backdrop that the BBRS was established as a voluntary initiative to the specifications of, and funded by, seven participating UK banks. It was intended to help rebuild trust among the SME community by resolving historical and contemporary disputes between banks and those businesses. It thereby filled a gap in dispute resolution and redress.

[Andy McDonald (Middlesbrough) (Lab)]

Does that list extend to Lloyds bank? I have a constituent who is a reasonably successful property developer and was encouraged by Lloyds bank to take out larger and riskier loans. He took independent advice, only to find that the person advising him was on commission from Lloyds bank. The ultimate outcome was that he was foreclosed upon, and his life was ruined. That example shows, in all its gory colour, that the current system of resolution is not working.

[Mr Wragg]

I am afraid that the hon. Gentleman highlights one of many cases across our constituencies. I perfectly well understand his constituent’s sense of injustice. Hopefully this debate will at least give us an idea of the way forward.

The BBRS followed from the Walker review, commissioned by UK Finance, which identified a gap in dispute resolution and recommended that a voluntary scheme be established. It recommended action to deal with legacy disputes and contemporary complaints by providing speedy resolution for larger SMEs’ ongoing financial complaints. A proposal to set up a financial services tribunal was made at the time by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) and the Treasury Committee in its 2018 report. The Treasury Committee report noted strong cross-party support for the proposal. For a number of reasons, including a lack of parliamentary time and the significant costs involved, the Walker review did not support the creation of a tribunal.

The BBRS was also established to ensure the excesses of the financial crisis were not repeated, and that record keeping and data flows about SMEs can be used to monitor bank behaviour and culture, and can provide an early warning system for customer mistreatment. That was a key purpose of the Walker review, beyond providing a new mechanism for dispute resolution.

A 2019 letter to Stephen Jones, the then CEO of UK Finance, the then Chancellor of the Exchequer, Philip Hammond, made Her Majesty’s Government’s position on the nascent scheme abundantly clear. It stated:

“If it transpires that the scheme is not bringing resolution to a meaningful number of complaints…then I would expect there to be further discussions around the scope of and eligibility for the backward-looking scheme.”

That gets to the nub of the issue.

[Margaret Ferrier]

Despite forecasts that more than 60,000 legacy cases would be eligible for review, take-up and financial payouts have been minimal. Does the hon. Gentleman agree that further action must be taken to support businesses in bringing forward legacy claims, and that there should be a six-year time window?

[Mr Wragg]

As ever in these debates, the quality of interventions is superb. The hon. Lady pre-empts exactly what I was going to say. If she will forgive me, I will come on to that in a moment, but her point is perfectly valid.

It may not surprise anyone following the story closely to learn that the BBRS has failed to resolve a meaningful number of complaints. By the former Chancellor’s standards, I think it is fair to say that the BBRS has been an abject failure and has certainly not given UK SMEs confidence to engage with financial service providers.

As just mentioned by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), it was estimated by the then chief executive of UK Finance that more than 60,000 historical complaints would be eligible for review. However, by May of this year, the BBRS had made direct adjudications on just 28 cases resulting in financial awards. In that same time, it has been involved—whatever “involved” means—in the award of 56 financial settlements between banks and claimants. That includes cases where the dispute has resulted in a settlement following, but not necessarily because of, the involvement of BBRS. Even being generous, the BBRS has been involved in a maximum of just 84 financial awards in nearly two years out of an estimated potential of 60,000. Plainly, the quantity of resolved cases is very disappointing, to say the least.

Naturally, that raises questions about value for money. The BBRS cost more than £40 million to set up. By May of this year, according to its own data:

“Substantially more than £1 million of financial awards have been made to SMEs as a result of BBRS intervention so far”.

In other words, a maximum of between £1 million and £2 million has been paid out since the launch of the BBRS. Bear in mind that it cost £40 million to set up. Would it not have been easier to simply divide that £40 million and dish it out randomly? The BBRS has proved to be very poor value for money.

The primary issue behind these abysmal figures is the design of the scheme itself. Heavily restrictive eligibility criteria have locked out and timed out almost all credible claims from businesses, and there is no indication of any willingness from the BBRS or the banks to address this. The chair of the BBRS SME liaison panel—an advisory body set up to give SMEs a voice within the service—resigned in March this year, stating:

“The very low numbers of cases resolved by the BBRS and the banks suggest an inflexible system, and I do not detect the necessary willingness and imagination within the existing system to resolve this.”

Another fitting quote from an unnamed source close to the scheme was reported in The Times in May 2022. They eloquently put it as follows:

“Saying BBRS needs an overhaul is like saying that a tank that’s been blown up could do with a service. It’s completely defective.”

The specific concerns about eligibility are fourfold. First, the current point of valuation of turnover is the date at which the complaint was first made by the SME to its bank. This allows the bank to artificially distress companies’ assets to below £1 million, and therefore out of the scope of the BBRS, before the complaint is made to the bank. Instead, the point of valuation of turnover should be made at the point at which the bank’s alleged act or omission initially occurs.

Secondly, complaints eligible for the Financial Ombudsman Service are not eligible for the BBRS. However, the FOS has a wider purpose than strictly to resolve disputes. There may be a peripheral element of a historical SME claim that either qualifies it for consideration by the FOS or has been the recipient of such consideration. In this case, the applicant would be precluded from the BBRS, although it may meet the other criteria.

Thirdly, eligibility regarding size of business thresholds is too strict. Property developers, landlords and others cannot meet the current BBRS eligibility minimum business size criteria, even if they set out to do so. Fourthly, on balance sheet limits, currently businesses are assessed on gross business assets rather than net business assets. This is restricting and illogical, because it is not representative of the true size of the business, as it includes the costs that are due to be deducted from the balance sheet in the short term.

As I have already alluded to, the chair of the advisory SME panel resigned earlier this year after proposals put forward to reform the eligibility criteria were consistently rejected or ignored. This prompted the BBRS to unilaterally dissolve the panel. As I said at the time, this was a rather shocking and cynical move. The BBRS established an advisory panel to feed SME concerns about the service back to the BBRS. The concerns raised were ignored, and the proposals were rejected out of hand. When it appeared that the panel might be publicly critical, the panel was shut down. For those now unrepresented SMEs, that must have felt like a complete stitch-up.

The BBRS is indeed winding down—though I question whether it ever got into swing. The historical complaints process closed in February, and the contemporary complaints process will continue only until the end of this year. The reason that I am here—I surmise that colleagues are here for the same reason—is to put it to parliamentarians that the process has been a failure. We simply cannot make the same mistakes again. As I hope I have illustrated, the BBRS has been a waste of time and money and has certainly not resolved a meaningful number of disputes. If anything, many SMEs’ experiences with the BBRS have served only to further erode their trust in the financial services sector.

As has been suggested in the past, a financial services tribunal, with a statutory footing, could be the solution. I commend the idea to my hon. Friend the Minister. Such a body would be modelled on employment tribunals and be a genuinely independent organisation with legal teeth. The creation of a tribunal would have a dramatic effect on the power imbalance inherent in disputes between businesses and large financial institutions, echoing the transformation in employer-employee relationships brought about by the introduction of employment tribunals. That must be accompanied by an amendment to section 138D of the Financial Services and Markets Act 2000, to enhance the legal rights of SMEs. Those changes will be significant in ensuring that SMEs have access to justice. Indeed, as the Treasury Select Committee stated in 2018:

“Taken together, these changes will ensure that the UK’s small businesses will no longer be denied justice, as so many have been in the past.”

Ultimately, the BBRS has failed to achieve its aim of providing meaningful redress in a fair and independent way. As an alternative, the proposal for a financial services tribunal, endorsed by the Treasury Committee and by the all-party group on fair business banking, which I have the pleasure of co-chairing, must be seriously considered. We owe it to the brilliant SMEs in each of our constituencies to create a lending environment in which they can thrive and drive our national economy forwards.

14:47

[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Hazel Grove (Mr Wragg) on bringing this debate before us. He is absolutely right: businesses need access to a proper, functioning dispute resolution service, but I fear that the BBRS is not it. He was also absolutely correct that redress cannot be left only to those with the time, money and patience—or, as he said, the bravery—to sue the banks. The hon. Lady the Member for Rutherglen and Hamilton West (Margaret Ferrier) made the most salient point that barely a few dozen of the 60,000 legacy cases that were potentially liable to be investigated or taken up by the service have been resolved. That is a problem.

[Andy McDonald]

Are we assuming that those legacy cases fit the criteria set out by the hon. Member for Hazel Grove (Mr Wragg)? Many of our constituents will be nowhere near those criteria, but their lives and businesses lie in tatters. Are they not included? Are they not in anybody’s thinking, in terms of the resolution that they deserve?

[Stewart Hosie]

They ought to be in people’s thinking. The figure of 60,000 is commonly used. Of course, the eligibility criteria include that they must not be eligible for the FOS scheme, as was very properly referred to by the hon. Member for Hazel Grove. However, let us assume that it is a big number, in the tens of thousands, and let us hope that, at the very least, businesses do not fall through the cracks between this service and the FOS. It would be a different problem entirely if people were not eligible for any kind of access to at least one of the redress systems.

The hon. Member for Hazelgrove laid out a bit of the background. I want to go through some of that again briefly, given that it is quite important in terms of what the Government may choose to do next. The BBRS was set up in 2018 to help SMEs resolve disputes with their banks free of charge. Many high street banks, including Lloyds, NatWest and HSBC, took part in the scheme, and it has been operating—although I use that word loosely—since 2021. It was created after a spate of banking scandals involving the mistreatment of thousands of companies, including, as we know, the Royal Bank of Scotland’s GRG, and similar operations at other banks in the aftermath of the 2009-10 financial crash.

The eligibility criteria, which have been mentioned, are that the dispute must have occurred after 1 April 2019, and that the SME must have an annual turnover of up to £10 million per annum and a balance sheet of up to £7.5 million, and must not be eligible to take the complaint to the Financial Ombudsman Service. Many stakeholders have noted that the scheme has not been successful in helping SMEs to resolve their disputes, despite costing—as we have heard—tens of millions of pounds to set up, which was paid for by the industry. One of the main issues with the scheme is the narrow eligibility criteria for SMEs to use the service. The recent figure was only 35, but even 50 or 60 would still represent a tiny fraction of the number that could be resolved.

[Margaret Ferrier]

When the Business Banking Resolution Service was introduced, it was marketed as an accessible service. However, data shows that, by March last year, only 776 businesses had registered with the BBRS. Does the right hon. Member agree that this suggests that either the Business Banking Resolution Service was difficult to use or, alternatively, the service was not publicised effectively?

[Stewart Hosie]

It could be a combination of both, although it is instructive that Andy Agathangelou, the founder of the Transparency Task Force, called the BBRS an “abysmal failure” that is not “fit for purpose”, so I certainly think that the opaqueness and lack of advertising might be significant factors in how few businesses have sought to use it and what happened to those that did. He also said that some small businesses are “convinced” that the BBRS is

“a mechanism through which banks have found justification for not making payments”.

Even if that is not true, if the perception among the SME community is that the service, which was put in place to resolve their disputes, is being used for contrary purposes, that alone would be a huge problem for the BBRS.

[Kirsten Oswald]

My right hon. Friend is making a very helpful speech. The point he is making feeds into the wider point about the huge imbalance in power, influence and resources that exists between the banks and those seeking redress. On his point, the behaviour of some banks has been quite shameful—I am speaking from my own casework here—so whatever happens from here on in, it is imperative that new arrangements are fair, genuinely independent and transparent, so that businesses can be confident that they really are going to work.

[Stewart Hosie]

My hon. Friend is absolutely right, and that imbalance in power and resources was writ large in the BBRS executive’s unilateral decision in March to dissolve the SME liaison panel, after rejecting its numerous proposals to expand the eligibility criteria. It is a law unto itself. The liaison panel came forward with ideas to make things work better, but instead of them being taken on board and actioned—if they were appropriate—the panel was unilaterally shut down. The voice of SMEs to the panel has effectively disappeared, and that was after the SME liaison panel’s chair resigned because it was “difficult to make progress”.

That short list should be cause for concern enough for the Government, but let us take a look—I give great thanks to the all-party parliamentary group on fair business banking for this—at the list of headlines that this shambles has generated: “Business Banking Resolution Service a ‘real failure’”; “‘Cynical’ closure of bank redress adviser panel prompts anger”; “New £23m Business Banking Resolution Service has yet to pay any compensation”; “Bank redress scheme ‘is completely defective’”; “Lawyer Cat Maclean quits ‘completely defective’ banking compensation scheme”; “Business Banking Resolution Service ‘done on the cheap’”, with £40 million invested and it does not work; and “Banking redress chief earns £1m despite paying only five claims”—at that point.

If I were the Economic Secretary to the Treasury, I would be deeply concerned. The process has failed. Businesses are not getting the service or the redress that they need and deserve. The headlines are absolutely diabolical. It appears that few lessons have been learned from the financial crash, or if they have, they have been forgotten. I will ask the Minister two questions and then make one final brief observation. How will the Government ensure that we widen the criteria for businesses to be able to use the service, and what mechanisms will they put in place to allow SMEs to properly, fairly and quickly settle disputes with the banks?

My final observation goes back to the financial crash. We remember the actions of RBS, GRG and a variety of comparable outfits. Instead of restructuring those businesses to allow them to thrive, prosper, trade and grow again in the future, there was a perception—backed by some fact—that the banks were looking at asset-rich, cash-poor businesses to raid and pillage. From my time on the Treasury Committee, I am happy and confident to say that. The perception among the business community is that businesses were there to be raided by the banks, rather than helped. Trust between businesses, particularly small ones, and the mainstream banks broke down entirely. If I were the Government, I would be deeply concerned, looking at the headlines that have already been generated and the self-evident failure and lack of transparency within the BBRS, that it may not take an awful lot more for businesses to once again lose trust in the high street banks. I hope that the Minister will comment on that in his response.

14:57

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve with you in the Chair, Mr Pritchard, and I thank the hon. Member for Hazel Grove (Mr Wragg) for securing this timely debate.

Small and medium-sized businesses are the lifeblood of our economy and our communities, as I am sure everyone will agree. The smaller companies driving growth and creating jobs in every part of the UK deserve to be able to fairly resolve disputes with their lenders, and the BBRS was designed to do just that. That is why some of the issues with the BBRS, which we have heard about today from Members across the House, are so concerning and deserve to be looked at by the Treasury.

The BBRS emerged from the Walker review in 2018, after the Government chose not to accept calls from both the Financial Conduct Authority and the Treasury Committee for formal regulation of SME lending. In their 2018 response to the Treasury Committee’s report on SME finance, the Government gave several reasons for not accepting those calls and to justify their view that an ombudsman-style approach to dispute resolution was preferable to a statutory body. First, a statutory body and regulation could negatively impact SMEs’ ability to access finance. Secondly, there would be no real difference in how an ombudsman or a statutory body would make adjudications. Thirdly, an ombudsman would represent a less costly process for SMEs. Fourthly, an ombudsman would be able to arrive at decisions more quickly. Finally, a statutory body would require primary legislation—a response not proportionate to the problems faced by SMEs.

I hope that the Minister will address this question, five years on and in the light of the issues raised today. Does he believe that his Government’s reasoning still holds, that the cost of a statutory body and formal regulation would still outweigh the benefits and that the evidence on the ground suggests a new approach is needed, including for those businesses deemed too large for the Financial Ombudsman Service and which fall under the remit of the BBRS? For example, the Walker review estimated that more than 60,000 cases would be eligible for review by the BBRS, of which 6,000 were expected to register. However, according to the BBRS’s figures as of June 2023, only 28 cases, both historical and contemporary, directly adjudicated by the service, have resulted in financial awards being made.

We have heard numerous concerns about the transparency and accountability of the service in relation to the low number of cases and financial settlements, most notably those raised by Antony Townsend, who said it was too difficult for him to make progress when he resigned as chair of the BBRS SME liaison panel in March. Cat MacLean voiced similar concerns when she resigned last year, as the Minister will know. In 2019, the then Chancellor of the Exchequer, Philip Hammond stated that if the scheme did not bring resolution to a meaningful number of cases, he would expect further discussions about its scope and eligibility. Does the Minister believe his former Chancellor’s threshold for further thought on the effectiveness of the scheme has been reached? In particular, what assessment has the Minister made of the proposal to extend the jurisdiction of the Financial Ombudsman Service to take complaints from businesses with a turnover of up to £10 million?

I understand that the FCA recently concluded a call for input to inform its review of whether the thresholds for SMEs to access the Financial Ombudsman Service remained appropriate. However, since the consultation closed in April, businesses have received no update. Considering the concerns we have heard today, I hope the Minister will set out how the Treasury will work with the FCA to ensure that a timely and satisfactory outcome to the review is brought forward for Britain’s business community.

SMEs are vital to the UK economy. British businesses deserve a tax and payment system, procurement process and dispute resolution service that work for them. That is why I look forward to hearing the Minister talk about how the Treasury will respond to the concerns outlined in today’s debate. In particular, does he think we need a new approach to the resolution of disputes between SMEs and lenders? How will the Government work to ensure there is sufficient transparency and accountability in the resolution process? Finally, does the Minister believe it is time to widen access to the Financial Ombudsman Service?

15:02

[The Economic Secretary to the Treasury (Andrew Griffith)]

It is a pleasure to serve with you in the Chair, Mr Pritchard. I congratulate my hon. Friend the Member for Hazel Grove (Mr Wragg) on securing the debate on his behalf and that of the all-party parliamentary group on fair business banking. In my short time in this role, I have seen that the APPG does a significant job and gives a voice to our all-important small businesses.

We are a nation of small businesses. They employ a vast number of people in the economy and make a huge contribution and, as other speakers have said, it is vital that they secure access to the finance and capital that they need to grow, expand and do the wonderful things they do to help the UK economy. As part of that, it is critical when things go wrong—regrettably, they sometimes do—and businesses face issues with their bank, they can access efficient and unbiased dispute resolution. We all aspire to a quick, efficient and affordable process in that regard, which allows for unbiased outcomes for those businesses. Those are the higher-order objectives that we seek.

For context, it is not my role today to defend the BBRS. It is an independent body and is not a part of Government or the Treasury. I will share the same context about it being set up following a number of interventions by Parliament. We will not truthfully know whether the deficiency was in the overestimate of the number of cases or the effectiveness of the BBRS system. Given that we know that the BBRS is effectively headed for the exit in all circumstances, that is moot, although the question of how individuals and businesses get redress is not. That, I absolutely accept, is a responsibility of the Treasury; it is how we can ensure good order on this.

The more generous in spirit among us might accept that the BBRS was set up with good intentions, but as we have heard from Members here today, that has not perhaps been the experience. I understand that and have listened very closely to today’s debate, and perhaps my hon. Friend the Member for Hazel Grove would care to meet me to share his own particular constituent experience. I understand that is a long-standing piece of casework, and sometimes such specific examples illustrate the more general point that we have heard from Members today given that there are clearly a number of cases.

[Kirsten Oswald]

The Minister has offered to meet the hon. Member for Hazel Grove (Mr Wragg), who secured the debate, which I am sure is very welcome, but might he feel able to extend that offer to others of us who have long-standing cases in this field that are difficult to resolve?

[Andrew Griffith]

I want to be a listening Minister and am of course very happy to do that, but in so doing I do not want to hold out a false expectation. These matters are not directly the subject of ministerial interventions, so while I am very happy to meet the hon. Lady, and, again, use those examples to inform the wider policy area, in fairness it is important for people in the Public Gallery or who might be following the debate that I do not raise false expectations, because some of these matters have involved great trauma to individuals and have been going on for a long period of time. I would be grateful if the hon. Lady could frame things in that important context, but of course I would be happy to meet her and, lest I receive more interventions, that is a general point for Members of this House. It is right that I approach my responsibility diligently as we try to formulate policy.

As we go forward, whatever past decisions have been made in this respect, I am very keen to understand—the hon. Member for Hampstead and Kilburn (Tulip Siddiq) talked about this—the role of the Financial Ombudsman Service, which successfully deals with tens of thousands of complaints each year now, including SMEs up to the threshold of £6.5 million. The Financial Conduct Authority—whose decision it must be, but with the support of Ministers—has looked to extend that upper threshold, and it is consulting; perhaps Members have responded, like the APPG has.

I spoke to the chief executive of the FCA and gave him great encouragement that, the consultation having been closed in April of this year, we will shortly hear the response. I hope the House will await that, because it is my belief that one should look again at the merits of this versus a statutory tribunal, which I believe still has some of the disadvantages that the hon. Member for Hampstead and Kilburn outlined, particularly in terms of the need for primary legislation but also the non-material differences between an ombudsman service which exists, is seen to work generally in practice—although I am always open to representations—versus yet another novel intervention in the form of a new statutory tribunal.

[Stewart Hosie]

Can I just get a guarantee that there will be no gap between the removal of the BBRS and the decision taken on the thresholds that can be reached and potentially another body, statutory or voluntary—that there will be no gaps or black hole that businesses might fall into at some point in the near future, whether in months or years?

[Andrew Griffith]

The right hon. Member makes a fair point. The cracks that exist in the compensation regime are a challenging feature. That is one reason why I am attracted to using as much of the existing architecture as possible precisely to avoid that point about cracks.

[George Eustice (Camborne and Redruth) (Con)]

I apologise that I missed the opening speech because I had another meeting. If a lender were to try to enforce security in respect of a residential mortgage on a home, they would first need to go to a court to get a possession order. When it comes to business lending, a bank can enforce their security without any recourse to the courts at all. Does the Minister think that that is something we should look at?

[Andrew Griffith]

My right hon. Friend raises an important point. It would not be right to say that we should not look at it, but he raises this in the closing minutes of the debate and he knows that these areas can be fraught. One of the most challenging things about the regulation of financial services in general is the unintended consequences. The hon. Member for Hampstead and Kilburn talked about that, and we do not want to see any diminution in access to capital that could prevent our small businesses from growing. I would be happy to meet my right hon. Friend to understand the issue he raises in more detail, but I do not want to go any further from the Dispatch Box on that.

We have heard the importance of this matter to constituents of hon. and right hon. Members. We are united in this House on the importance of the provision of that lifeblood of business growth capital for our small businesses, which lack some of the sophistication and have been predated on by the banking sector in the past. That is not acceptable, and it remains the position of the Government to do everything we can to deliver redress where we can and to ensure the financial regulatory regime protects those who need our protection.

15:12

[Mr Wragg]

I thank the Minister for his constructive reply to this important and timely debate. I can respond positively to that kind offer to meet the APPG. Such a meeting would be invaluable for explaining some of our thinking and ideas in greater detail—whether that is an expansion of the Financial Ombudsman Service or, indeed, the establishment of a statutory tribunal system. Each has things to be said for them, but that is something to be worked through. Our preference would be on the basis of a tribunal.

To echo the remarks made by the right hon. Member for Dundee East (Stewart Hosie), we cannot have people falling through the cracks. We should be particularly mindful of the 600 businesses that have applied to the existing BBRS scheme and the status of their complaints. To finish on a phrase that is often used and can be seen as trite, but is absolutely applicable to this scandal, which has afflicted so many SMEs across our United Kingdom: justice delayed is justice denied. We should be mindful of that as we seek to bring about long overdue justice for those small businesses.

Question put and agreed to.

Resolved,

That this House has considered the Business Banking Resolution Service.

15:13

Sitting suspended.