RBS Global Restructuring Group and SMEs

Chris Elmore Excerpts

Thursday 18th January 2018 Commons Chamber

[Chris Elmore (Ogmore) (Lab)]

I thank my hon. Friend the Member for Norwich South (Clive Lewis), and members of the all-party group, for securing this vital debate.

Small and medium-sized enterprises form the backbone of our economy as well as our communities. The banking industry exists to support them, but the widespread malpractice that plagues the sector has shown that the banks fail those responsibilities catastrophically. Members have given details of the shameful behaviour of RBS, but as has been shown today, such behaviour is not exclusive to that bank.

One constituent of mine—a customer of Lloyds— has lost millions as a consequence of such immoral practices. Mr Alun Richards, who is in the public Gallery today, was once the owner of an extensive farming and property business in west Wales. He became a customer of Lloyds which, after a period of time, decided suddenly and without warning to transfer his account to the Lloyds recoveries unit in Bristol. After Lloyds made that decision, Mr Richards was soon left with nothing. He lost millions of pounds, and the bank took away all his assets, including his home. The manner in which it did so was inappropriate, irresponsible, and without any real explanation. There was little to no support available to Mr Richards, or any attempt to save the business. The solicitors, TLT of Bristol, acting on behalf of Lloyds bank, did so with intimidation and disrespect. Indeed, one Lloyds representative who met Mr Richards was not a Lloyds employee but on the payroll of chartered surveyors Alder King.

In the years that followed, Mr Richards raised complaints with the Royal Institution of Chartered Surveyors about the behaviour of Alder King, as well as with the Solicitors Regulation Authority regarding the behaviour of the solicitors involved. Each of the two regulatory bodies did little to nothing to investigate the situation. I have received many letters from both organisations, and to say that their responses have been half-baked would be an understatement.

Considerable attention has been paid to this issue in the House, including several Westminster Hall debates, and the beginnings of a sitting by the Business, Energy and Industrial Strategy Committee, during which the share price of Lloyds Banking Group dropped. Perhaps this debate will make Lloyds listen and realise that Members of Parliament are going nowhere, and neither are our constituents.

Such mistreatment of SMEs by the banking sector is a stain on the industry, and it is immoral, unjustified, and—unfortunately—widespread. I hope that after this debate, the Government will give due consideration to the atrocious behaviour by Lloyds, Alder King, and regulatory bodies such as RICS and the Solicitors Regulation Authority. Such regulatory bodies are there to deal with complaints, but they have utterly failed.

I am grateful that the Chair of the Treasury Committee spoke in this debate and said that she is in favour of some additional work on this issue. As I have told her, I am now composing a cross-party letter that will go to that Committee and call for a fuller and wider inquiry into the malpractices of the banking sector. This issue goes far beyond just one or two banks, and the system must be better regulated to prevent such behaviour. I hope that the Government will use the examples presented in this debate as evidence to do that, and I fully support the motion and the need for a tribunal service.

In the 30 seconds remaining to me I will also try to speak on behalf of my hon. Friend the Member for Cardiff West (Kevin Brennan). He is unable to attend this debate as he has a diary clash, and he apologises that he cannot be here. His constituents have suffered losses as the results of the practices of Lloyds bank and the receiver Alder King. He points out that the experiences of his constituents are similar to those related by hon. Members in previous debates, and they involve conflicts of interests, actions by banks that damage rather than support local businesses and an unhealthy culture that leads to unethical banking practices that have bankrupted many people who trusted their bank to act in their interest.