Protecting small businesses has to be a main priority
This month, parliament will debate the Royal Bank of Scotland’s treatment of small and medium-sized enterprise (SME) customers who were transferred to its now-defunct Global Restructuring Group (GRG).
RBS has faced an investigation for the role of RBS GRG in the poor treatment of SMEs in the wake of the banking crisis and I hope to speak in the upcoming debate on behalf of my constituent, Derek Carlyle, who was one of those who was treated appallingly.
After the bank changed its mind on a promise to provide funding for a new development, Mr Carlyle was forced into bankruptcy, lost his company and his home.
He found it almost impossible to find a solicitor who was willing to represent him in what turned out to be a seven-year legal battle with the Royal Bank of Scotland.
Eventually, time and perseverance paid off and Mr Carlyle won his case in the Supreme Court which ruled that a phone call from the bank in 2007 could be relied upon as a legally binding contract.
There are similar cases that I expect to hear more about during the debate, but Mr Carlyle’s success only proves that the current system for settling disputes between large banks and SMEs does not work.
No one should have to put their life on hold and lose everything they have to get the fair outcome they deserve.
That is why we need an open, affordable and accessible complaint resolution service that sits outside the regulatory structure and has the power to deal with the complex disputes that will be brought before it.
Such a system is not only in the interest of SMEs, but banks and the economy too.
It may help to improve the reputation of the big banks and at a time when they are closing branches and leaving towns like Cambuslang and Blantyre with no local bank, they could well do with a good news story.
SMEs are the backbone of our economy, they account for 99.3 per cent of all private businesses in the UK.
That is why Labour would increase lending to SMEs through regional development banks, but we also need to give SMEs the confidence to borrow from commercial banks to grow their businesses - offering a fair way to resolve complaints will help.
Unfortunately, for Derek Carlyle the story is not over, because the bankruptcy restriction order placed on him still stands.
It seems grossly unfair that he continues to suffer the consequences of what happened despite having done nothing wrong and being vindicated in the highest court in the land.
Mr Carlyle hopes that the Scottish Government will be able to intervene in finally having his bankruptcy restriction order overturned but, disappointingly, we have yet to have a response to enquiries to set this in motion.
It must be a very frustrating position to be in after so many years of fighting.
I hope that we can right this final wrong and that the upcoming debate in parliament will ensure that it never happens to anyone else.