RBS ‘sucked the life out of small firms’

ROYAL Bank of Scotland is a ‘vampire’ bank which has systematically destroyed small businesses by its ruthless treatment of entrepreneurs, the Government’s entrepreneur-in-resident claimed yesterday.

In an explosive grilling by MPs, Lawrence Tomlinson described his ‘shock’ at the disgraced banking giant’s handling of small firms, which he compared to the blood-sucking ghoul. He told MPs on the Treasury Select Committee: ‘Wherever I go, people come to me and tell me their tale of woe.’

Later, he spoke of his ‘shock by the lives that have been ruined, not just the businesses that have been ruined. The complete waste of an opportunity to grow businesses, rather than destroy them.’

Labour MP John Mann asked if ‘RBS is maximising its profits by mis-using its power in the market at the expense of perfectly viable, decent British companies across the country’.

Tomlinson agreed, saying he finds it ‘absolutely infuriating’ how firms have been treated, including suppliers to his own businesses.

His appearance follows his report, published last year, which claimed RBS pushes some small business customers into its ‘turnaround’ division, Global Restructuring Group, even though they are not in a desperate state. Few escape this black hole, which means they are ‘put on a journey towards administration, receivership and liquidation’, it said.

RBS (down 2.7p at 341.2p) has asked the lawyers Clifford Chance to investigate Tomlinson’s claims.

The bank, which is 81pc-owned by the taxpayer, says many businesses re-emerge from the controversial GRG division, such as Thomas Cook and Samsonite.

A spokesman said: ‘The vast majority of businesses that have gone through GRG have had a positive outcome, either returned to the main bank, moved to another bank or paid their debt back with only a minority facing insolvency.

‘These are serious allegations that have done damage to RBS’s reputation, and the independent review by Clifford Chance we have commissioned will examine these.’