JUSTICE FOR OUR FIRMS
Top entrepreneurs back our campaign
SOME OF Britain’s most famous entrepreneurs have backed The Mail on Sunday’s call for an official forum to tackle grievances between desperate businesses and their banks.
This newspaper has been highlighting the plight of small business owners who have had their lives ruined by big lenders.
Celebrity plumber Charlie Mullins, former Dragons’ Den star Hilary Devey and veteran retail entrepreneur Theo Paphitis all backed our call for a tribunal-style system or beefed-up ombudsman to enable companies to bring costeffective claims against big banks. Liberal Democrat leader Sir Vince Cable has also lent his support.
Campaigners including the SME Alliance, the organisation set up by victims of banking scandals, have been calling for a tribunal, alongside the All Party Parliamentary Group on Fair Business Banking (APPG). The APPG says businesses with a £2.9 trillion turnover are not protected.
Nikki Turner, a whistleblower and one of the victims of the HBOS Reading frauds, said this weekend that as well as a tribunal, a ‘truth and reconciliation’ process may be necessary for past scandals.
In some cases, businesses were brought down by outright fraud, such as at HBOS’s Reading branch in the mid-2000s. In others, customers allege that banks’ business support units engineered their insolvency in an attempt to get their hands on valuable assets.
Mullins, who set up Pimlico Plumbers in 1979 and has grown it into a business turning over tens of millions of pounds, said it was‘ staggering’ that it was so difficult for small firms to get justice.
He said: ‘ It’s hard to believe after all the financial dodgy dealing and mis-selling we’ve been through in recent years that there’s no proper protection for small and medium-sized businesses from banks who don’t exactly play fair. Talk about stacking the deck. If you’ve been stitched up you can complain to the bank, with your only other option being to blow loads of cash on lengthy legal action. ‘There needs to be a tribunal that is paid for by the major banks and which all lenders must answer to. This sector is worth £ 2.9 trillion and to think that there is currently no real protection for this huge chunk of the economy is staggering.’ Devey, who made her fortune through her Pall-Ex freight business, said: ‘The banks’ greatest asset is their user base and in particular small business owners who might grow to become their most impor- tant customers in the future. At present, there is clearly a lack of trust and faith on the part of many entrepreneurs, so The Mail on Sunday’s campaign to create an independent tribunal is in everyone’s interests, leading to faster resolution of disputes and more transparency, and letting British businesses get on with thriving to the benefit of all.’
Paphitis, another former Dragon and well known in the business world for a string of retail success stories from Ryman to Robert Dyas, said he thought a tribunal would benefit both small firms and banks. ‘Small businesses have to borrow money and need to get services from banks, but they don’t have teams of advisers who know what they are getting into like bigger corporations do.
‘ Banks then get a bad press because, as we have seen in the past, they have not always been that sympathetic. But also because a lot of people don’t understand how it all works. This sounds like a good idea for the banks and for their small business customers.’
The campaign received high profile political backing too last week. Sir Vince said: ‘The many, many banking scandals, including RBS’s Global Restructuring Group and HBOS Reading, have ruined people’s livelihoods, small firms and damaged public trust in the banks.
‘It is time to level the playing field – if the Financial Conduct Authority cannot or will not intervene to correct palpable injustice, then a new dispute resolution mechanism for financial contracts is needed.’
Banks also welcomed the idea of a new service.
Craig Donaldson, chief executive of Challenger bank Metro, said: ‘It is so important for firms that there is an effective dispute resolution service, and we therefore fully support The Mail on Sunday’s cam- paign.’ Ian Stuart, chief executive of HSBC UK, said: ‘HSBC is committed to supporting small firms, which make a huge contribution to the prosperity of local economies in the UK. They need an option when they are in dispute, and we are working with the FCA and others to establish how best to make this work in practice.’
Lord Cromwell, chairman of the All Party Parliamentary Group on Fair Business Banking, said internal bank processes were ‘ manifestly inappropriate.’ He said of a tribunal: ‘This is now recognised as the right way forward by Parliament and by the regulator. It’s time for action.’
FCA chief executive Andrew Bail ey t old The Mail on Sunday recently: ‘For issues such as RBS and its Global Restructuring Group, interest rate hedging, and complaints from small and mediumsized firms, there isn’t a proper dispute resolution process. I think there should be an ombudsmanstyle service.’
A Treasury spokesman said: ‘We set up the FCA in 2013 to make sure banks treat their customers fairly. It has committed to consult on giving larger SMEs access to the Financial Ombudsman Service and we will consider its findings when they are published.’