Interesting start to the New Year with press, politicians and even the 1% elite all discussing equality - or rather inequality. And there's been some very diverse comments from all over the place - not least those people with millions of pounds like Sir Martin Sorrell, insisting economic equality does not bring prosperity. http://www.theguardian.com/business/2015/jan/23/davos-wpp-martin-sorrell-equality-prosperity Personally I don't get his logic and I keep wondering - if 1% of people will own 50% of the world's wealth by 2016 (according to Shelter), and as that 1% seem very keen on buying things like diamonds and Ferrari's, how are Governments going to keep any reasonable economic strategy in place?
Surely we are going to get to a stage (if we're not already there) where no one except the 1% can afford to buy property - which can't be good for the building sector; more and more people will be relying on food banks and charity - which can't be good for farmers or the food industry; less people will be able to afford to run a car or afford the very expensive public transport - so less people will be able to get to work and; little luxuries like a holiday, will become a thing of the past for many families - not good for the travel and hospitality industries. It makes no sense to squeeze the 99% and in particular the so called 'middle class' to the point they are no longer predominant consumers because the 1%, with all their wealth, can't replace them.
As for SMEs - well many SME owners have been considering inequality for a very long time. For example, we don't think it's fair banks can abuse small businesses with complicated and sometimes fraudulent financial products and nothing is done about it. Similarly, access to funding and, even more importantly access to justice is not getting any easier. I know this is a gong SME Alliance has been banging since we were formed but, unfortunately it needs to be banged!
However, we are absolutely determined to make 2015 a year of progress and not just moaning. So we have started the year with two very important letters - one to Andrea Leadsom MP and the other to John Griffith-Jones and Martin Wheatley at the FCA. The point of our letters is - as things stand SMEs have little or no representation in the world of financial regulation. On the one hand the FOS are so limited in what redress they can give it is of no use to SMEs (some of whom have lost millions) and on the other hand, the FCA doesn't deal with individual cases. Yes it does deal with systemic issues and it does come up with blanket resolutions for redress but, given the effects of financial misconduct impacts differently on every small business affected, how can one generic formula resolve them all?
Big question - will we get replies?
I hope we will. I remember a good friend who is probably one of the 1% (oh yes, we at SME Alliance have no prejudice) telling me some time ago when I was writing to the newly formed FCA about a specific bank fraud, I was missing a trick by not writing directly to John Griffith-Jones - who, he insists, is one of the good guys. Maybe he is. I can't see why we wouldn't get a reply or why the FCA would not want to open a dialogue with a collective group of SMEs? Aside from anything else, we have a ton of information about the banking sector which becomes increasingly more powerful when cross referenced across the membership. I also think we'll get an answer because "it's good to talk" and this year we're focusing on positives.
So fingers crossed. We've also asked Andrea Leadsom to help us address this gap in regulatory agencies that leaves SMEs out in the cold. Both letters are on this website in the 'Public Interest' area. http://www.smealliance.org/public-interest.html But, if any member would like to forward either or both letters to their MP to further the cause, send an e-mail and we'll send pdfs.
Another positive this year will be our next meeting (date to come) on the subject of positive banking. We've done some research and there are various ethical sources out there - if you know where to look. Ironically there was an article in the press today saying the FCA is also looking at alternative funding and specifically peer to peer funding. They are concerned the public could be unprotected from rogues in this growing market. I'm not going to make the obvious comment - it would be negative!!
In general I don't like January. It's cold, damp and I didn't get an invite to Davos so I won't be whizzing down the ski slopes. All the same, I'm pleased 2014 has gone and I think 2015 will be much better for everyone. The very fact so many people have recognised and are talking about inequality has to be a good thing. I'm sure the resolution won't come over night and there will be lots of opposition. But there's an election coming and the one thing the 1% don't have on their side is numbers. Four million plus SMEs with 20 million plus votes should have a voice. We just need to direct that voice in the right direction. Starting with letters like the two we have just sent asking for positive communication.
This will be of particular interest to members but as all SMEs are affected by the obvious gap in regulation for SMEs, this is being posted as an open blog and not restricted to the members area. We hope it will be of interest to members and non members alike.
The 3rd meeting of SME Alliance, held at the St Philips Chambers in Birmingham last Tuesday was another huge success. The weather, various bugs and viruses meant some people couldn't make it but we're a tough lot and many people did!
Many thanks to our speaker - very talented Ian Fraser, author of Shredded. I won't say all our members already know Ian but certainly they all know of him as he has, without doubt, led the way in shining a light on how our financial institutions have been dramatically exploiting SMEs over the last 10 years or longer. So it was a fascinating talk and even those of us who have spent years investigating financial crime, still got some real eye openers from Ian and some quite comical. For example, Ian pointed out RBS has a customer Charter – here is the updated version of it:
As many of us often say (so often I'm giving it a hastag), #youcouldn'tmakeitup! Ian pointed us in the direction of so much lunacy from RBS and read some brilliant extracts from his book. If you only ever read one book on the outrageous behaviour of banks and how they have been able to get away with it, read Shredded!
I'm not going to say any more about Ian's speech as I hope he'll give another one later in the year. Not least because I know so many people were disappointed to have missed it.
One of the issues raised at the meeting was the incredible gap in regulatory bodies when it comes to SMEs. On the one hand the FCA insist they don't deal with individual cases (actually they do all the time) and on the other hand the FOS are so limited in what compensation they can award, their remit is completely ineffectual for SMEs.
There was some debate on who we should approach to remedy this situation and yet again there was resistance from some to opening doors with those seen as the establishment. But the overall consensus remains we must try and open doors with as many people as possible and we must do our best to overcome the 'them and us' situation. As our common sense lawyer always reminds us, we have to break down the Silos. So that is what we are going to do and a letter will be going to Andrea Leadsome and Vince Cable pointing out we cannot forge positive relationships or have useful mediation, if no regulatory body represents us. Will keep all updated.
Mel Loades has put together a brilliant team of advisers who had a morning meeting at the same venue to see how they (all members of SME Alliance) can best share information for the benefit of the membership. Many of these advisers have had considerable success helping SMEs overcome banking issues. Collectively they will be a powerful force and, given the team has experienced financial advisers and lawyers on board, this will be a very important resource for SME Alliance.
On the subject of SME Alliance itself, we were all in agreement with Clive May's comment at the meeting that, even although we are not all about banking, we do need to chalk up a positive result. How brilliant then that just two days later, Clive, with the help of his MP, David Hanson and Andy Keats (SME Alliance member and adviser) have achieved exactly that!
Today James Hurley published an article in the Times confirming Clive has won his battle with RBS over EFG loans and, as a direct result of his tenacity and persistence, RBS have agreed they miss-sold many EFG loans. A separate blog will be going up in the news section about this – but what a great start to 2015 for SME Alliance!
We discussed our next meeting which will be in London, probably at the beginning of March. The subject will be 'positive banking and funding.' That will be a first for lots of our members – the positive side of banking! But it had to come sooner or later. Some banks and funders are, fortunately, happy to lend to SMEs without a hidden agenda and we want to make sure our members know some of the best options.
We'd like to thank our hosts for last Tuesday, Andrew Maguire and Justin Luckman of St Philips Chambers, Birmingham. And I have to say, never having been to Birmingham before (I've been to the NEC but never into Birmingham city) and contrary to what a certain Fox News journalist had to say, I thought Birmingham was a very vibrant city. The venue we had was spectacular, the people were very friendly and I will definitely be going back.
I will try and get dates for the next meeting sorted out next week so everyone has advanced warning.
Excellent Letter From James Glanville To His MP On The Subject Of Interest Rate Swaps And The Conduct Of The FCA
Many thanks to James for allowing us to share this letter and supporting documentation as a blog for our members. Good to note Andrea Leadsom is insisting both MPs and the Treasury want to get to the bottom of this. Now let's see!