RBS Global Restructuring Group and SMEs

Patrick Grady Excerpts

Thursday 18th January 2018 Commons Chamber

[Patrick Grady (Glasgow North) (SNP)]

I join others in congratulating the hon. Member for Norwich South (Clive Lewis) on securing this debate and in thanking the Backbench Business Committee for granting time for it, especially after a debate on the subject was cancelled before Christmas. It is clear from the contributions today that we could easily have filled a whole six hours, there is so much going on. I think it started for all of us with individual constituents coming to us, and we began to realise that this issue extends across the entire country.

One of the key questions, or perhaps the key question, that remains to be answered is whether the behaviour of the RBS GRG was, to paraphrase the right hon. Member for North Norfolk (Norman Lamb)—I hope this is not unparliamentary language—a cock-up or a conspiracy. Either way, the decision to seize and strip the assets of thousands of small businesses across the country has, as we have heard, caused untold misery to the owners and employees of these businesses and their families, and it seems to have caused genuine damage to the economy as a whole.

The fact that we are having this debate is a tribute to the campaigners, the various organisations that have raised awareness with their MPs and the work of the all-party group on fair business banking. Those campaigners include one of my constituents, Mr Neil Mitchell, who I know is watching this debate very closely. We have heard many powerful testimonies from constituents, and I want to share some of my constituent’s experiences.

Neil was the chief executive of Torex Retail. He alleges that the RBS Global Restructuring Group “conspired by unlawful means” with Cerberus, a private equity fund in America, to engineer the sale of Torex to Cerberus for a cut-price £204 million in June 2007, which is more than 10 years ago. He alleges “systematic institutionalised fraud” by the RBS GRG in relation to its dealings, which have cost him his business, and time and money afterwards in his campaign for justice. Although I, like many Members, have been able to table parliamentary questions, speak in debates and write to and meet Ministers, Mr Mitchell has faced the burden of this case. While he is rightly seeking restitution of his own losses, his greater motivation has been to support other affected businesses in seeking justice and the establishment of a system that will mean that this kind of scandal can never happen again.

All Mr Mitchell really wanted was a meeting with the chief exec of RBS, and I wonder how much grief might have been avoided if RBS had been willing to meet constituents and business owners much earlier in the game. Instead, Mr Mitchell commenced private legal action against RBS, Cerberus and KPMG; he reported his case to the Serious Fraud Office and the FCA, launched a civil legal action against the companies involved and financed a private criminal investigation with a view towards a private criminal prosecution. He has also played a part in the “ripped off” campaign. I pay tribute to his dogged determination and that of many other campaigners.

There are some key questions that the Government need to answer and that we perhaps all need to reflect on. First and most important, in whose interests were the decisions of the RBS GRG to force these businesses into default? Who has the beneficial interest in businesses that were secured borrowers being forced into default? Whether for an individual or a business, what is the primary objective of engineering the deliberate default and stripping of assets of businesses that potentially have long-term viability? Many of these businesses were stripped of fixed assets that realised capital for a state-owned bank, and individuals were forced out to the labour market, with all the cost to the state and loss to the economy that unemployment brings.

I thoroughly agree with all the calls for a dispute resolution mechanism and, indeed, for a public inquiry into the actions of GRG. Every victim of mis-selling should be given fair and equal opportunity to receive justice. Banks have to fulfil their duty to have the public interest at their heart, and that has to be put at the heart of banking culture in the United Kingdom.