Commercial Financial Dispute Resolution Platform Debate
Full Debate: Read Full DebateCallum McCaig
Main Page: Callum McCaig (Scottish National Party - Aberdeen South)Department Debates - View all Callum McCaig's debates with the HM Treasury
(7 years, 8 months ago)
Commons ChamberI congratulate my hon. Friend the Member for East Lothian (George Kerevan) on his choice of tie and on securing this debate—we are wearing remarkably similar ties today, although I am not sure whether that says more about him or me.
This is a really important debate, and there are two aspects to it. First there is looking back at some of the truly appalling practices carried out on behalf of banks, and secondly there is the forward-looking aspect of making sure that these mistakes are never repeated. I do not believe that the solutions that have been put forward will do that adequately.
Banking is clearly a cornerstone of our economy. The central role that it plays has been built on trust—businesses’ trust that their bank will deal with them responsibly, but also that the Government and the financial system will protect them if that relationship, for whatever reason, breaks down. That system may work for a large conglomerate—a major employer with the ability to go toe to toe with the banks in terms of litigation, affording lawyers and so on. However, for small or medium-sized enterprises, that relationship is skewed, and they stand to lose out because they cannot meet the might of the banks.
Let me just put that into perspective. I am sure that these numbers will not come as a surprise to anyone, but small and medium-sized enterprises account for 47% of turnover and 60% of employment in the private sector. That is a huge part of our economy, and one we must all be cognisant of, and we must provide the protection it requires.
How do we go about rebuilding the trust that has been lost? We have heard that the problem stretches across the length and breadth of the country and that different banks and sectors have been affected by malpractice. Will ad hoc arrangements address the problem? I do not believe they will, because the problem is not ad hoc; in large part, it is systemic, and we do not solve systemic problems with ad hoc fixes.
There is a temptation in this place, and in all walks of life, to find the simplest solution possible. In this case, that will not cut the mustard; we need to find a proper solution, and my hon. Friend’s suggestion of a commercial financial dispute resolution platform, whether that is a tribunal or something else, is a key part of doing that.
Like other hon. Members, I have constituents who have had issues in this respect, particularly with RBS and its Global Restructuring Group. While I have been sitting in the Chamber, a constituent—I do not feel comfortable naming them, and they have asked me not to—has messaged me about this. He said that, in the dealings his lawyer has had with RBS, the bank’s lawyers have said that these things are water off a duck’s back and that a bit of bad publicity now will not change how it operates. If that is the case, it suggests that, even when we have ad hoc solutions in place, they do not solve the ad hoc problems. That adds to the compulsion on us to find that systemic solution.
Perhaps I could name one of my constituents, Archie Meikle, of Ashwood Homes, who has given me permission to do so. I have fought on his behalf for over six months, and we have been waiting for responses from RBS after he was forced into the GRG. Does my hon. Friend agree that the only way we can solve these problems and grow our economy is by making sure that our businesses are protected from programmes such as these, which are being pursued by the banks?
Unsurprisingly, I agree wholeheartedly. The importance of economic growth is tied into this. There are individual consequences to issues like these, but there are also whole-system economic problems that come from them.
Aberdeen is going through a difficult economic time as we speak, although I think we are beginning to see green shoots of recovery. However, we have not seen the problems associated with the previous financial downturn, and we may be in a beneficial situation. However, there is no systemic solution, and just because we do not have a problem now, that does not mean that there will not be problems in the future. The economic problem in Aberdeen has been particularly localised, but if it were to be repeated on a national level, the mistakes of the past could well creep back in. As the UK moves towards leaving the European Union, there is the risk of greater pressure on our financial and business systems, and the temptation may come back for banks to use the opportunity to make money on the backs of others. It is therefore incredibly pressing that we get this right.
The benefits of this proposal would be manifold. Rather than huge crises that we need to solve, we would have early intervention, and we would have parity between banks and companies, so that they could identify and solve problems early, without the need for massive recompense, as has been the case.
We have heard from many hon. Members today that it is very difficult to put a figure on the cost to business. It is even more difficult to calculate the cost to the economy of lost growth as a result of these problems. But let us come back to the human cost, which a number of Members have mentioned: the hours of grief, the hours of anguish and, in certain cases, as the hon. Member for Edinburgh West (Michelle Thomson) mentioned, the lives that have been lost. That is the problem, and we can do something about it: we can protect our businesses. We can ensure best practice, and above all, we can ensure that the mistakes of the past are never repeated.