(6 years, 3 months ago)
Commons ChamberI thank the hon. Member for East Lothian (Martin Whitfield) for bringing forward this important debate. Like me, he is an officer of the all-party group on fair business banking and finance, which I co-chair. I also speak today on behalf of Jon and Kerry Welsby and others in my constituency who have suffered as a consequence of the apparent bank-induced failure of business services company Mouchel.
As the motion states, the problems in the banking sector are not restricted to RBS—I will offer evidence to the House later that will widen this debate—but I will deal first with RBS. It is clear that the senior management are directly responsible for what happened, but there are also serious questions that the regulator, the FCA, needs to answer, particularly about how it intends to hold these individuals to account through phase 2 of its inquiry and about the reasons for the fundamental difference in tone and substance between the conclusions of the full report and those of its summary. Its summary sets out its key conclusions, and although it identifies isolated examples of poor practice, it lists eight separate areas where RBS was cleared of blame before later highlighting areas in which widespread inappropriate treatment had occurred.
The full report, released eventually by the Treasury Committee some 15 months later, stated:
“Our central conclusions are that there was widespread inappropriate treatment of customers by GRG”,
that
“in a significant proportion of cases...we assessed”
these businesses
“as being potentially viable”
and that
“the treatment appears likely to have caused material financial distress…for the most part”
as
“a direct result...of the priorities GRG pursued.”
Is it not indicative of the problems of transparency that the delay between the release of the initial report and the full report was unacceptable and that it was only eventually released because of the efforts of Committees of the House and Members of this Chamber?
The hon. Gentleman makes a strong point. We should thank the Treasury Committee and its Chair for their work.
As I said, these issues are not restricted to RBS. Many will also be familiar with the HBOS Reading scandal, where former bankers and their advisers were jailed for a total of 47 years in 2017 for activities that took place over a decade earlier, prior to the takeover by Lloyds in 2008.
I have recently been sent by one of those convicted, Mr Michael Bancroft—this was kindly facilitated by my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi)—hitherto unreleased documents, including the Project Lord Turnbull report, authored by Lloyds senior manager Sally Masterton, which alleges that senior managers within the bank were aware of the fraud prior to the takeover and the £14 billion Lloyds and HBOS rights issues, yet they took clear, deliberate and documented action to conceal it. Let us be clear: if this is true, it could potentially make the rights issues and the takeover fraudulent. Those named as culpable for non-disclosure in the report include chief executive Andy Hornby, chairman Sir Dennis Stevenson, former CEO James Crosby, corporate CEO Peter Cummings, and the auditors and reporting accountants, KPMG. The all-party parliamentary group will have a full copy of the report and Members will be given access to it. Status, seniority and background cannot be a barrier to justice or to holding to account those who are ultimately responsible for the devastation caused to so many lives and to the wider economy.