Commercial Financial Dispute Resolution Platform

Roger Mullin Excerpts

Thursday 15th December 2016 Commons Chamber

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I shall be mercifully brief. I am afraid I have a slight throat infection, so I am forced into brevity against my better judgment.

I would like to address just one area: culture. Many outstanding speeches have gone into lots of detail on the way in which people have been crucified by the banks through the mis-selling of products that were entirely unsuitable—that were not transparent and simply existed, at the end of the day, to allow people to asset-strip perfectly good businesses in our society. I have a number of constituents who have been affected. I will not go into great detail on them because, like those of my hon. Friend the Member for Aberdeen South (Callum McCaig), they do not particularly want to be named, and I fear that if I give too many details, others might find out who they are. One of them was a victim of Clydesdale bank, then National Australia Bank, and then the utterly appalling Cerberus. They have, as he put it, stolen his assets and put him completely out of business—a family business—creating problems not just for him but for his entire family. Another businessman said to me of the Clydesdale bank-NAB-Cerberus lot: “They have destroyed a business, and the mafia couldn’t have bettered the way in which they did it.”

A business close to the boundary of my constituency was promised in statements by Ross McEwan of RBS that proper mechanisms would put in place, and that there would be proper resolution, so that it would get back fees that were unsustainable and quite ridiculous. It then found that what RBS did not state was that it was surrounding this with such difficult conditions that this medium-sized business in central Scotland is unable to get back a penny of—would you believe?— £1.8 million in fees that RBS is imposing on it.

At the heart of this is a cultural problem of a particular sort. It is fundamentally about a complete lack of ethics in the banking sector in relation to businesses, including small businesses. Broadly speaking, there are two major ways in which one can look at ethics. The first is the so-called ontological approach—looking at the processes along the way. Were those processes properly transparent, and was the information properly provided, so that along the route, before one sees an outcome, it can be expected that banks operate ethically? Banks have demonstrably failed on those measures, so from the ontological point of view, they fail the test of operating ethically.

Of more interest to me from an ethical standpoint is the so-called consequentialist view—looking at the outcomes of the banks’ behaviour. Judged on that basis, they have demonstrably completely failed this community—small and medium-sized businesses in this country—and society as a whole. We can look at this from the point of view of medical ethics. The medical profession says that one should operate on the principle of non-maleficence; basically, one has an obligation not to inflict harm intentionally. If ever there was a case of operating to inflict harm intentionally, in order to gain from the destruction of businesses, it is the way in which many of these banks have been operating. We need to get action on this.

I support the motion, but there are two additional things that I would like to see. First, there should be imposed on the entire banking sector a proper and rigorous duty of care towards its customers. Unless we get a duty of care, the banks will continue to have an easy path towards ignoring the rights of individuals and businesses, and potentially continuing to destroy them for their own gain. Secondly, there should be far greater strengthening of support for whistleblowers in the banking community. The Government should contemplate putting in such severe penalties against financial institutions that they are deterred from blackmailing and harassing people who are doing society a favour, because, so often, it is the whistleblower who suffers, rather than the perpetrator of the crime.