RBS apologises for misleading MPs over SME “forced closure” scandal

RBS (2)

Royal Bank of Scotland today apologised for giving “incorrect” evidence to a committee of MPs, but forced the author of a report that had initially raised the concerns to close down accounts held for 20 years.

The parliamentary committee had been tasked with investigating whether a subsidiary of the bank deliberately bankrupted businesses for profit. RBS claimed at the parliamentary hearing that its Global Restructuring Group did not operate as a profit centre, contradicting conclusions drawn by a report by Lawrence Tomlinson, adviser to business secretary Vince Cable, which said that the bank was deliberately closing down small and medium-sized businesses in financial trouble, in order to make money from them.

RBS Chairman Sir Philip Hampton later wrote to the committee, saying that the evidence “lacked clarity” and accepting that it had mislead MPs.

However, on tonight’s broadcast of BBC’s Panorama, Tomlinson will describe how, the day before he was due to give evidence to the committee, the bank’s Deputy Chief Executive  emailed him to say that he would have to close all of his business and personal accounts, and move his mortgage, due to a “breach of trust”. Tomlinson had held accounts with RBS for over two decades, and runs a business that employs over 2000 people.

I couldn’t believe it. You know, on the business side it was going to be really difficult to move it, cancelling all my credit cards, my cheque book, you know, all of these things needed sorting out. I have a very complicated business, so it’s just created a big problem for us,” said Tomlinson. “I’ve been with them 20 years. I’ve tried to help them change – and they’ve cancelled all my business and personal accounts. I think to just create the maximum amount of disruption to me and my businesses.”

RBS denies that the decision to close all of Tomlinson’s accounts had anything to do with the report submitted to the parliamentary investigation.

Although external investigations have not found any evidence of wrongdoing at the bank, Committee Chairman Andrew Tyrie said in a statement that evidence supplied by RBS was “materially incorrect on a crucial point and unacceptable,” adding: “parliament expects witnesses to give straightforward evidence. Two senior managers at RBS fell short of this standard at a hearing with the Treasury Committee in June.”

It is vital to a sustainable economic recovery in the UK that access to finance for SMEs, from banks and elsewhere, be restored to working order. The reality on the ground behind all this is hundreds of thousands of small businesses – crucial to sustaining our recovery,” he added.

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