A former Government adviser has called on Britain’s markets watchdog to publish a full report into allegations that the state-backed Royal Bank of Scotland (RBS) mistreated thousands of its small business customers.
Leeds entrepreneur Lawrence Tomlinson said he was shocked by the Financial Conduct Authority’s announcement that it would not serve the public interest to publish a full report into allegations made against RBS’s Global Restructuring Group (GRG).
The FCA has rejected calls to publish a report into the allegations against RBS, saying it would instead release a detailed summary soon. Nicky Morgan, who heads up the Treasury Select Committee, warned last month’s leak of the report to the BBC has left the FCA with “no control over the timing or content” of further public disclosures from the report.
The BBC reported late last month that the 361-page leaked report showed 92 per cent of “viable” firms seen by the unit experienced “inappropriate action”, such as interest charges being raised or unnecessary fees imposed. It was also reported that only 10 per cent of its business customers ever returned to the main bank.
In a letter to FCA chief executive Andrew Bailey, Ms Morgan urged him to secure approval from RBS for full publication of the report “without delay”. She asked the FCA to update the committee on its inquiry into the leak itself and if the regulator “bears any responsibility”.
Mr Bailey said in a letter that it was not in the public interest to publish in full because such “Section 166” reports were conducted on the basis they would be kept private.
Mr Bailey said the FCA would publish a detailed summary and in a form that won’t need “Maxwellisation”, a legal requirement to give RBS a chance to respond, a process that has taken years with some official reports in the past.
The detailed summary is largely ready for publication once the FCA has decided whether it should formally investigate RBS or individuals, Mr Bailey said.
Mr Tomlinson, who has published a scathing report on the way RBS managed its relationships with some small businesses, said: “How can the FCA justify that publishing the full report into the mistreatment of thousands of UK businesses by RBS’s Global Restructuring Group is not in the public interest?
“I am shocked by Andrew Bailey’s suggestion that the investigation was conducted ‘on the basis that there is no intention to publish’.
Mr Tomlinson added: “Any suggestion that the report may not be published has only arisen since it became clear that the conclusions of the investigation were heavily critical of RBS.”
Mr Tomlinson served as an “entrepreneur-in-residence” for former Business Secretary Vince Cable during the coalition Government.
Norman Lamb MP, the vice chairman of The All Party Parliamentary Group on Fair Business Banking and Finance, said: “The secrecy around this report completely undermines public confidencein the FCA, and Nicky Morgan is right that the situation is unacceptable. We cannot tolerate a situation where a leaked report on such a vitally important issue remains in the hands of a select few.”
Mike Cherry, the Federation of Small Businesses (FSB) national chairman, added: “For the FCA to spend three and a half years reviewing the disgraced division and refuse to publish its findings is simply not good enough.
“If the regulator believes in protecting the public interest it will provide the in-depth, candid assessment victims need to secure the compensation they’re due.”
RBS has previously acknowledged that, in the aftermath of the financial crisis, it let some of its SME customers down, in connection with the transition to GRG, clarity over changes to prices or fees and the handling of complaints.
Ross McEwan, the CEO of RBS, said last year: “We have acknowledged for some time that mistakes were made. Some of our customers went through what was a traumatic and painful experience as a result of the crisis.
“I am very sorry that we did not provide the level of service and understanding we should have done. The culture, structure and way RBS operates today is fundamentally different from the period under review.
“We have made significant changes to deal with the issues of the past, so that the bank can better support SME customers in financial difficulty whilst also protecting the bank’s capital.”