RBS Global Restructuring Group and SMEs

Ged Killen Excerpts

Thursday 18th January 2018 Commons Chamber

[Ged Killen (Rutherglen and Hamilton West) (Lab/Co-op)]

As we have heard, this debate is about wider failures, which go beyond RBS GRG. I would like to highlight the extent of the problem by drawing on the experience of my constituent Mr Derek Carlyle, who is in the Gallery today. I pay tribute to the late Jimmy Hood, the former Member for Lanark and Hamilton East, who first raised this case in a Westminster Hall debate on 10 March 2010. The record of that will show a more thorough account of the case than I will be able to give today.

Almost eight years later, things have moved on significantly for Mr Carlyle, but the issues he faced and the considerable challenges he had to overcome remain today. What started as a good relationship with RBS took a turn for the worse in 2008, when a promise to provide development funding was withdrawn. Mr Carlyle went on to fight for 10 years in the face of relentless intimidation, bullying and underhand tactics by RBS. It sought to destroy Mr Carlyle, and it almost succeeded. It manipulated his personal bank accounts, seized his assets, forced his company into administration and set about preventing solicitors from acting on his behalf. His solicitor at the time, also a small business, found itself under siege, inundated with requests and bombarded with phone calls—so much so that it was unable carry out its usual functions and provide a service to its other clients. In the end, it felt that it had no option but to cease representing Mr Carlyle. Eventually, his case was taken by a firm of solicitors that was not specialised in litigation and first had to seek the permission of RBS before it could act.

Mr Carlyle had to go all the way to the Supreme Court to settle his case—the only person to do so—and it came at a huge financial and personal expense. He lost his business and his house; his private life was affected; he suffered damage to his reputation; and he was forced into bankruptcy. The great unfairness is that the bankruptcy restriction order against him is still in place today, meaning that he is unable to act as director of a company, unable to borrow more than £500, and even unable to become a Member of this House should he wish to turn his talents to the world of politics. How can it be fair for someone to fight for almost 10 years, be vindicated in the highest court of law, and then, at the end of it all, find themselves significantly disadvantaged in what they can and cannot do in their personal and professional life? The legislation that controls bankruptcy in Scotland is devolved. I am disappointed that the Minister for Business, Innovation and Energy in the Scottish Parliament has declined to intervene to correct the unfairness that means that Mr Carlyle is still subject to the bankruptcy restriction order.

Most of us would not have the determination or strength of character that it took for Derek Carlyle to win his case. He was told on more than one occasion to give up. He says that he relied on others who put their neck on the line, and no small measure of luck. If this can happen with a bank that is over 70% owned by the taxpayer, it can happen with any bank. It shows that we have a completely dysfunctional system where the balance of power is heavily in favour of not just the banks, but professional advisers who are integral to the system, such as surveyors, insolvency practitioners and solicitors. Moreover, bad behaviour is rewarded because outcomes like Mr Carlyle’s are rare and almost impossible to pursue. It is in the interest of small and medium-sized enterprises and the banks to sort this problem now. It is not going away, and failing to tackle it will only push it further down the road. The last thing we need is another banking scandal.

It is not sustainable for banks to continue to act as judge and jury, and it should not take what Derek Carlyle had to go through to reach a fair outcome. I fully support the recommendation of the APPG on fair business banking. We need to bring complaints out into the open. We need an affordable, accessible dispute resolution process. It needs to be a completely independent system that sits outside the regulatory structure and has the knowledge and power to deal with the complex disputes that will be brought before it. The best way of achieving that is through a public tribunal system, and I hope that Members across the House will back those calling for that.