SME Alliance Members Speeches At Cranfield University

On 31st May 2017 three members of SME Alliance gave a talk at Cranfield University. Not surprisingly, the three speeches were to raise awareness of the appalling and stalemate situation between some Banks and their SME clients - both historically and in their current inadequate way of dealing with legacy issues.

I think it would be fair to say that many people in the audience were shocked - and rightly so.

The speeches from Nick Gould (Chairman of SME Alliance) and Clive May and Nikki Turner (founder members and Directors of SME Alliance) are posted below as separate blogs in the order they were given. Starting with Nick's.

We are very grateful to Professor Ruth Bender and her staff at Cranfield for inviting us to speak and for their excellent hospitality.

Nick Gould (Chairman of SME Alliance) talk at Cranfield University – 31st May ,2017.

Good evening ladies and gentlemen, what a five-star introduction from Ruth. I hope the three of us can live up to it.

Last month I was invited to give a talk at an FT Conference on Banking Standards. I started by saying that I felt rather like Daniel in the lion’s den as the majority of attendees were bankers, regulators and those who are meant to advise on bank strategy. Actually, the talk went much better than I had hoped. Let’s see what happens this evening.

My talk will build on the one I gave the other week. Before I start, I want to say thanks very much to Cranfield and to Ruth Bender for inviting us to talk about and discuss these issues with you. As Gillian Tett of the FT put it, silo breaking is important. I sometimes worry that too many academic institutions do their research without much regard for real life facts. If you don’t leave here tonight without some understanding of those facts, the three of us have not done what we came to do.

As you now know, my name is Nick Gould. I am corporate law partner at gunnercooke. I am also Chairman and a co-founder of SME Alliance and it is only in that role that I am speaking here today. I am certainly not here to comment in any way on the legal profession.

Ruth also mentioned a bit about SME Alliance. It is currently a sole purpose lobby group formed less than three years ago—but seems to be creating rather a lot of noise at the moment. It is made up mostly of owners of Small and Medium sized businesses who have in some way been damaged by certain action of certain people at certain banks. I have recently been using the word “evil” to describe the actions of some of those people. I will let you decide whether words such as “amoral” and “lacking in emotional intelligence”, are more appropriate. As well as trying to help members however we can, we act as a knowledge sharing group and we have an excellent group of outside advisors who do all they can to help our members, generally on a pro bono basis.

I will start by giving an overview of the impacts of bank behaviour on some of our members—I hope that will set the overall framework for our discussions. Clive May (aka Clive the builder) will speak about his own personal experiences in dealing with RBS and make one or two robust comments about the legal profession and its regulators. Nikki Turner will discuss matters relating to HBOS and Lloyds and what is known as the HBOS Reading fraud. Because, as you may have read, there are on-going negotiations with Lloyds, we will not be discussing anything which has a direct bearing on those negotiations but don’t worry; the 15 or so years that Nikki and Paul Turner have spent exposing the initial fraud and the years of bank and regulator denial and cover up, will give you more than enough to take away with you.

I have divided my brief talk into three parts.
First, some examples from SME Alliance members of the effects of poor governance and rules which are too complex, unenforceable and unenforced.
Next, to give an insight into how some banks got themselves their current awful reputation. Finally, I’d like to end on a positive note; what might be done to improve banks’ culture – and why that would benefit everyone.

We would very much welcome thoughts and questions which we will do our best to answer after Nikki’s talk.

I should note that my comments are addressed mainly to two major UK banks RBS and Lloyds/HBOS and various regulators. The other financial institutions are not directly within these discussions—but also should be interested.

SME Alliance is, I think, wrongly perceived as a bank bashing organisation – we aren’t, but look at it from where the owners of the SMEs we try and help, sit. They feel beaten up, destroyed, not listened to and not heard, so they fight back in numerous ways. They feel also they have been defrauded by the banks and the banking system, and I am using the word fraud in a non-legal/ non-technical sense here. No one wants a war, but that’s what it feels like and that is what SME Alliance, as an organisation would like to try and get away from.

I asked some SME Alliance members a couple of questions about their views of RBS and HBOS. We have posted the replies on an anonymised basis on our website www.smealliance.org , here are some of them.

Q1. If you had a claim against a bank today would you be treated any differently?
Everyone said no—examples;
” No, I don't think I would be treated any differently. I think that my bank and its lawyers are arrogant and believe they are invincible and they know that I have no money and can take no action against them.”
“No because banks and bankers now think it’s part of the game to extract every penny they can with no moral compass or a thought for right or wrong.”
“No because bank culture has not changed.”
“No difference now because the fundamental relationship between Banker and Customer and the insolvency industry has not changed one jot. Banks take security and it gives them total power – this is the problem.”

Q2. Has there been any improvement in your treatment by your bank over last few years?
“Personally, worse; no interaction with the bank is possible. Imagine the school bully holding you at arm's length while he eats your sweets; but without the faint hope of a teacher coming to the rescue.”
“I have seen no improvements since the recession. The Bankers maintain their arrogant standing! As they could not run a business how are they able to dictate to Small Businesses what they should or should not be doing!”
“Worse. There is no fairness being demonstrated in any dealings.”

Q3. Would you say the people you have been dealing with have treated you with high ethical, professional and business standards; please provide examples.
“Recently one person has been really good professional polite and courteous although his hands are tied he cannot even sneeze in front of you without the approval of the legal team. In the early days, it was all about intimidation and power to batter you down into submission you are made to feel alone and a failure.”
“No definitely not! At Mediation, they were intimidating to say the least. The bankers continue to lie through their Solicitors they have no morals or standards. They most of the time are trying to cover their backs for bad behaviour from the past.”
​
Q4. If you could wave a magic wand and improve one thing in the overall conduct of your bank in its dealings with you, what would that one thing be?
“Truth honesty and decency along with large helping of self-reflection.”
“Honesty, transparency and genuine file disclosures. The banks need to stop fabricating central files and file documents to cover up their misbehaviour and dishonesty, there will be a substantial cost to this but ‘the rules are the rules’!”
And finally, this is from Nigel Henderson. You might want to watch his talk at last year’s Cambridge Symposium on Economic Crime, which you can find on YouTube. It is shockingly honest and should (but won’t), make the board of RBS, the taxpayers’ bank, and UKFI, its majority shareholder, cringe.

“The mainstay of any business relationship is trust in the ethics, commercial morality and basic honesty of the people you are dealing with. Banks have shown themselves to be devoid of all of the above, putting personal and commercial avarice ahead of any other consideration towards their customers. Recent court cases have demonstrated that those at the very top of the banks persist in ignoring the conduct of the bank and covering up such wrongdoing.”

I believe Nigel’s comments sum up much that is wrong with the banks and it mentions words—ethics, morals and honesty- which too many senior bankers continue to ignore, while playing lip service to these ideas.

So how did UK banks, so highly regulated, get into this position? A couple of thoughts and several questions. It seems to most outsiders that senior bankers live in a bunker mentality, the boards have their spades and just keep on digging. They can’t or won’t listen – why, is it seen as a sign of weakness? Or is that what they are “told” to do? Have bankers ever thought how ridiculous it is that they need a regulation called “Treating Customers Fairly”? Why not just do it as a matter of course and not look for wriggle room to get out of such a basic idea?

Where are the regulators needed to ensure rules are effectively enforceable and enforced? Why do they allow bullying of whistle-blowers, doctoring of transcripts between bank and customer, or a vendetta against certain bank customers? Does the Banking Standards Board ever talk to those affected directly? Why would a bank spend (say) double the amount on professional fees that it need spends to settle a claim? Why is there apparently such a fear factor within these banks? Who actually decides on the banks’ strategy when it comes to the thousands of potential claimants who have been subject to such appalling behaviour? How did RBS (the 73% taxpayer owned bank) spend over £125 million in legal fees to defend shareholders’ actions.

The Banking Standards Board attended the FT Conference I mentioned, as did members of the FCA. They haven’t really rushed to follow up with us despite making all the right noises at the time. What message does that send out to the thousands of people affected by these matters?
And please take this next comment away with you—it is the core of my talk.
Ethics, morals and relationships—they are, but shouldn’t be, merely words to many senior executives. And because they are seen as merely words and because of action or inaction, arrogance or inability of certain directors and senior executives to hear the real effects of those words, we know people who have committed suicide, have died prematurely, are dying of cancer and have had nervous breakdowns. These are real people with real lives—not numbers or units. Bankers want all this stuff to be anonymised. They won’t deal with the real-life impacts of their appalling behaviour.

And you know what-- it would actually be in the banks and everyone else’s interest for them to behave morally and ethically, to build real relationships and to be effectively regulated. I assume no one wants to be spoken to like this. I also know very well, generalisations are odious. 99% or more of those working in banks are good and fair people. Sadly, the bad guys and girls are the ones sitting on top of the heap.

So, where next?

This is from Nikki.
“Reality check - Most of all (and here's the 'world peace' line) I would like to see senior management having some real consideration for the society we all live in. Some senior bankers may believe the importance of the financial sector means they are indeed 'masters of the universe' but that is ultimately a delusional view. I know many bankers who are good decent people but sadly, over the last ten years, the term banker has become synonymous with the most disparaging of descriptions previously reserved for unsavoury characters. It is a fact the only people not badly affected by the so called 'credit crunch' are the senior bankers who oversaw the disaster. Society has not forgotten this fact and it has tainted the entire sector. Given that nothing has changed for the better, society is becoming more and more frustrated by what can only be perceived as a culture of greed, arrogance and disdain for the very people who bailed banks out and allowed senior management to continue to receive telephone number sized bonuses. It is not a healthy or sustainable situation and the only people who can change this perception or this dark culture are senior bankers.”

We need bank directors to stop digging and to start acknowledging the real wrongs; start talking to us and others like us. Stop being just legalistic—be something more. Stop relying on your lawyers and other advisers. You get paid enough, take some responsibility. Read the comments from the boss of Thomas Cook who in connection with the death of two children in Corfu some 10 years ago, said recently “you have all kinds of advisors….but you have to make the decision…. you have the responsibility.” He also said “…probably the company did wrong everything they could do wrong until I decided to talk not about the family but with the family.” Maybe he should join a board of a UK bank.

Be human, be moral and recognise what happened to those on the other side of the table. If I worked in an industry and read some of these comments, I would be ashamed. Why not be part of a change for something positive. Paul Turner who knows more about these defects in banks than most, suggested something such as a truth and reconciliation commission, why not?

Thank you
Nick Gould

Nick Gould

Clive May Speech at Cranfield University 31st May 2017.
​
Good evening My name is Clive May.

Thank you for your time in listening to our experiences.

The failure to listen by the banks has in part led us to where we are now. They failed to listen they failed to hear and see what we were telling them about their wrong doing.

That failure led to the cover ups being seen played out in HBOS Reading and RBS mistreatment of SME’s and many other instances of bank fraud. And here I am using the work “ fraud “ in a non-technical sense.

I used to own a company called  C May Brickwork Ltd but it is fair to say that company was destroyed  by the actions of  employees / senior managers of RBS. My story isn't unique thousands of SMEs have been destroyed in a similar way- through economic crime in its widest sense.. It is important that people listen to these stories and hear what we are saying. They involve real people, with real families and real lives. losing real jobs and sometimes sadly killing themselves.  SMEalliance has been a great help to many of us , it means we aren't alone and neither were we the failures that the banks had made us feel. We were just conned by bankers helped by lawyers and accountants -- people who we should have been able to trust. 

We are almost over-whelmed by the resources that banks like RBS are throwing at us to stop us claiming fair redress. You only have to look at the latest shareholders’ case to see over £125m being expended only to scramble at the last minute desperate to settle.  Sad to say, much of the nasty bits of our stories involve too many parts of the legal profession -- these include law firms, partners in those firms, the SRA and the Law Society. The regulator apparently doesn't want to understand and so can't regulate effectively. The Law Society  doesn't seem to have any interest in how its members come across to people like me. I know about all this from very direct and personal experience. So this is the chance for us to get a small part of our message across. 

I’m the lead campaigner in the Enterprise Finance Guarantee scheme mis-selling that RBS was forced to admit back in 2015 as a result of our campaign . The EFG was supposed to enable SME’s suffering in the downturn obtain funding that was otherwise unavailable from lenders. The government covered 75% of the loan to the lender in the event of default, RBS sold it on the basis that the 75% guarantee was for the borrower paid for by an insurance policy covering the liability  RBS sold it to SME’s on the basis that personal liability would be 25%. This turned out not to be the case RBS totally mis represented the facts.

How can a loan to an SME lead to its demise?

As a result of the financial crash banks were required to be well capitalised incase of further crisis’s. Banking regulation required banks to provide provisions for debt lending to SME’s which were considered risky. The higher the risk the greater the provision.

RBS found out they could use the EFG to convert existing lending on overdrafts therefore obtaining the 75% guarantee on existing debt in many cases without lending any new money.

Not only did they get the 75% guarantee they also found that because govt guarantees are AAA backed any previous provisions would be returned to the banks helping their liquidity. Remember RBS “lent” nearly a billion pounds using this scheme many SME’s didn’t want or need the EFG they wanted to keep their overdraft facilities inplace RBS had other ideas.
 Not content with this RBS pulled remaining pledged overdraft facilities post EFG’s possibly in order to collect upon the guarantee at the company’s demise?

Remember it’s not profit that sends a company under, its cashflow once the ability to service costs goes the business will follow it soon after. 

 It’s one thing to mis-sell a product but to do it in a potentially fraudulent manner as in my case sets a new low for this particular bank.

 Whether it is a true fraud remains to be seen as North Wales Police are still investigating staff at RBS at the moment.
 There are four key points I want to make very quickly. All show the barriers we face in our quest for justice?

 1.    ​The regulatory bodies 
​In the case of the EFG review that RBS announced after publicly admitting mis selling, the BIS FCA & British Business Bank all stated the relevant review would be an independent review.  RBS set up an internal review team comprising of ex GRG staff to review selected customer files. How on earth can this be independent when it’s the same people at the bank?  With this being allowed by the regulatory bodies it’s no wonder they think they are too big to fail 

 2..  The law firms colluding​ with ​the banks 
The SRA doesn’t want to know. I told them in a formal complaint that a major law firm had ignored key information from me and several other witnesses relating to damaging allegations against SME’s. Those people had run companies which had been ruined by RBS. The SRA said this wasn't a matter of public interest.​
​I have made complaints about several law firms; it is a total waste of time . It seems that the SRA is there to protect law firms alone.  
The Law Society say they don't get involved in matters of regulation. They are in some ways even worse than the SRA, as they are meant to be the face of the legal industry. They have turned their backs on the victims of economic crime like us. If the Law Society President would like to reply to my letters to him, I would be very happy indeed. 

3  The barriers to finance to obtain justice
​ The cost of fighting the banks with their unlimited amounts of resources (RBS has spent more than £125 million on legal fees on one case alone recently ) is almost impossible.  Is this another form of financial crime by the banks? They have too much power, how can we ever obtain a level playing field...
​ We have so much law in this country -- huge amounts. But, and this is the point , if there is no fair process to allow me and others to be heard in Court then there is something wrong with the system and we victims of economic crime can never have fair redress.​ 

4  The unwillingness to put things right​
If banks started at least to have sensible discussions about these matters instead of trying to bully people like me into submission we could probably do a fair deal and move on. If anyone doubts those committing the economic crimes don't come over too well from a PR point of view, the fact the world's major banks have been fined hundreds of billions of dollars says a lot. ​ Banks try and pretend in the media they are in some way trying to fix things. Sadly, the truth is entirely different. We, the victims of economic crime remain in limbo and something needs to change to give us back our lives.

 Thank you

Nikki Turner Speech At Cranfield University 31st May 2017

HBOS Reading – Bankers are not too big to jail.

Hello, I’m Nikki Turner and like Nick and Clive, I am a director and co-founder of SME Alliance. I suspect (in fact I’m sure) that but for the now infamous HBOS Reading scandal, I would never even have thought about bank fraud let alone co-founded an organisation to combat it. Therefore, and not that I would wish on anyone what we’ve been through for approaching 14 years because of the fraud, I can’t help feeling it was fortuitous, in a bizarre way, that Paul and I were involved. Firstly, because one of the positive results of our experience has been the formation of SME Alliance which has and continues to support many SMEs battling against banks - and secondly because, as it turns out, we are strangely adept at exposing fraud. Which is rather odd because we have both been in the music business all our adult lives except for the last ten years when we have been forced to become sleuths – or in Paul’s case ‘super sleuth’. The alternative was to lose our home and our sanity on top of losing our business.
 
For those who know nothing about HBOS Reading, I should explain it is what Thames Valley Police have described as “the biggest bank fraud in British history”. Despite repeated reports in the press about bank losses of £245M, I can assure you that the HBOS Reading fraud caused losses in the region of £1BN to HBOS / Lloyds and hundreds of millions of pounds in losses to the banks business clients, their shareholders and their creditors. Worse than that the HBOS Reading fraud ruined many lives and that’s what I want to talk about because it was so catastrophic and so unnecessary.

Unnecessary because HBOS rumbled what was going on in mid 2006 and we had uncovered the main points of the fraud by September 2007. There was no reason for the victims to suffer for ten years. Catastrophic because at least five victims I know of, have died before seeing justice done.

If I was writing a fictitious book about Bank fraud and I used HBOS Reading as a storyline, I suspect I would never find a publisher on the grounds the story was too outrageous – not to mention pornographic. We weren’t just alleging crooks were being put into BoS clients companies by our bank manager, we were also alleging the crooks were being given full control of these companies and the bank were funnelling millions of pounds into them so they, the bank manager and his chums, could live luxury lifestyles. This included the services of prostitutes paid for by the client companies.

We made these allegations after the Bank closed our business accounts on erroneous grounds. I’m not going to go into detail but our business was closed down in April 07, reopened in May 07 when the Bank were on a fishing trip to see what we knew, which was relatively little back then, and then definitively closed down in July 2007 which is when we really started investigating.

I am reliably informed by a contact at Thames Valley Police, that the most successful frauds are the most simple and if you peel back the trimmings from this one, it was very simple. It took us approximately six weeks to uncover the basics of the fraud. We did it by following the directorships of David Mills and Michael Bancroft, the key men in Quayside Corporate Services – the Bank’s preferred ‘turnaround’ consultants. Almost all of their directorships were in companies owned or previously owned by HBOS clients. Almost all of the companies were given huge increases in funding the moment Mills and/or Bancroft became directors and all of them ended in administration or liquidation leaving the original owners with massive debts which were subject to personal guarantees.

I should point out that while some companies did go into administration and were pre-packed into new companies owned by the Quayside consultants while Lynden Scourfield was still at the Bank, the majority of them were pulled down after he left. It seems to have been a deliberate tactic by HBOS to distance the Bank from what happened at Reading. Directors of Companies in administration have very limited scope to make claims against creditors (which the bank was in every case) – as usually only the administrators or liquidators can bring such an action. So, even where directors made generous offers to buy companies out of administration, the bank (or rather the administrators) repeatedly sold companies for a fraction of the directors offers to connected third parties. In this way, no victim of HBOS Reading could bring a case against the bank on behalf of their company. And at the same time, the Bank pursued those same company officers under personal guarantees for the short falls caused by the Bank employee’s and consultants, which resulted in many business owners losing their family homes.

Of course, what made HBOS Reading particularly news worthy when it did finally result in a five-month criminal trial 10 years after the Bank uncovered it and nine years after we uncovered it, was the luxury life style it facilitated for the defendants. Again, if I was writing a fictitious book, this would have been a ripping yarn. Bank managers and the consultants using money syphoned from customer’s accounts for the kind of perks usually reserved for rock stars and footballers. Luxury properties, private jets, superyachts, exotic holidays and lots of bling. As for the sex and the drugs – well Paul and I have been in the music business all our adult lives. Paul’s previous company, Zenith Lighting, did lighting and production for the tours of people like Bob Marley, Led Zeppelin, Thin Lizzy, Bruce Springsteen, Fleetwood Mac, the Jam and Paul Weller amongst others.  I did work for Paul’s company years ago (yes, I did eventually marry the boss) but I lived in Italy and Hungary for many years and worked for big European bands. Rock bands, particularly 70’s and 80’s heavy metal bands, were not known for limiting excess but neither Paul nor I have ever heard anything quite so disturbing as the excesses of Lynden and co. Bear in mind we’re talking about our middle-aged bank manager and the consultants he imposed on his clients.

Here’s a quote from the witness statement of one of the prostitutes. This quote didn’t make it into the press and was probably considered too racy even for the Sun! These are the people who were given full fiduciary control of the businesses of a High St Banks clients.

On the second occasion it was Suzie, me and another girl called Starr. We met near the flat and one of the men met us and we walked to the flat. Once again we chatted and had drinks. I spent quite a bit of the time in the kitchen with the fat bald man talking. We girls then got changed and we did a girl/girl show again. I was aware that Suzie then went into the bedroom with the fat bald man. She later told me on the way home that she had given the man oral sex, it didn’t last more than 10 minutes and she was paid extra for the sex. Myself and Starr stayed in the lounge with the other two men. We were bouncing around on some plastic balls. I was aware that the men took their cocks out and were masturbating. I do not recall ejaculation. I just ignored them and did our thing. We then left. I have a recollection of getting some extra money on one of the occasions, which was shared out. Both meetings I was paid about £700/800.

I have nothing against those practising the oldest profession in the world and it’s not a crime in this Country to consort with prostitutes but oddly, I think it was a definitive moment for the defendants when the girl’s statements were read out in Court. I was watching the jury and their faces went from confused to shocked to totally disgusted hearing this. Understandably, after they had heard this, it was quite hard for the jury to look at these men as the kind of people who should be trusted to run other people’s companies. Like so many before them, these so called ‘professionals’ were foiled by the old ‘trouser dilemma’.

After just a few weeks of investigation back in 2007, we had discovered all the perks including the sex (although fortunately we didn’t have the more taboo details) and we told the entire Board of HBOS. Not just by e-mail but also by registered letter to each individual director including Sir Dennis Stevenson, the Chairman and Andy Hornby the CEO. That all happened in 2007. The Banks reaction to our allegations in 2007 was to start trying to evict us from our family home in an attempt to stop our investigations. In total we had 22 hearings between January 2007 and August 2010 and the Bank’s Board’s legal costs were paid from a false account in the name of our company.

Even now, I find it absurd and more than that, illogical, that senior bankers, paid telephone number remuneration to run their banks efficiently and professionally, could deny facts they knew to be true. And not just them, their lawyers did the same on behalf of the Bank to the point the Deputy Chairman of a 600 strong London law firm felt able to put in writing on 27th May 2008 that our allegations were “ill-founded and misconceived.” HBOS also felt able to tell both Cambridge and Thames Valley Police at the beginning of 2008, they did not want the police to investigate HBOS Reading because nothing had happened and there was no fraud. Ten years later when the criminal trial finally started, it was confirmed by various senior HBOS bankers they started investigating Lynden Scourfield and Reading in July 2006 and the Bank’s Crime Prevention Unit had done 3 investigations when they told the police there was nothing to investigate.

Please take a moment to think about that. A major Bank, realising something has gone seriously wrong in one of their branches, starts investigating in July 2006; gets rid of the Bank manager; gets rid of the consultants who have caused hundreds of millions of pounds of losses to the bank and its clients; even gets rid of any client business unwittingly involved by closing them down and putting them into administration (thus ruining many good companies and many lives) and then tells the police, nothing happened and tells their shareholders everything is so rosy in the garden they should all invest in a £4BN Rights Issue. Sometime later they did accept there was a problem at Reading but they put it down to one man, Lynden Scourfield, who had been a regular Robin Hood figure who had been over generous to some of his customers. Those same customers who were now penniless, with no businesses, no livelihood, in some cases no home and massive debts. As Robin Hood figures go, I’d say Lynden failed miserably.

More bizarre still is the fact the police, the financial regulators, senior members of the Bank Of England, the Treasury Select Committee and even the Prime Minister and the Chancellor of the Exchequer, all accepted the Banks explanation back then. There was no fraud. Therefore, it didn’t matter what we uncovered about losses to the bank or its clients or what stories of drug abuse and prostitution came out because no one would believe us or do anything about it anyway. Even when our MP, Sir James Paice, along with seven other MPs, instigated a Debate in Parliament in June 2009 on the subject of HBOS Reading, where he also alleged potential criminal conduct, the Bank was able to completely ignore the MPs and the constituents they represented. Of course, we now know a lot was happening in the background. There were endless reports and reviews into HBOS Reading starting in 2006 and continuing even now.

When documented, all of that makes for outrageous reading about outrageous conduct. But it’s not so easy to document the consequences. It’s not easy to document the emotions of people who lose everything; people whose marriages split up because of the extreme pressure families live under when the Bank, chasing personal guarantees, take people’s homes after destroying their businesses; it’s hard to explain what it’s like when you have to accept packages from food banks because you can’t feed your family despite years of hard work. Most of all it’s not easy to explain the emotional state that leads to suicidal thoughts and which, in some cases, is fatal because – banks have not only been too big to fail and bankers have not only been too big to jail, the authorities have been wilfully blind to the epidemic of fraud some banks have been perpetrating. The feeling of impotency when you realise none of the authorities you relied on to protect you from criminals will act when you allege the criminals are bankers, is shattering. For some it was simply too much.

To lose everything because of a gambling habit or a drug or alcohol addiction or even because you were simply very bad at business, would be devastating but it’s self-inflicted and probably inevitable. But when you’ve done nothing wrong and you lose everything because of the conduct or policies of bankers and those professionals that surround and protect them, it is criminal and should be treated as such. Sadly, in the majority of cases, it isn’t. In the name of ‘Brand Protection’ and in order to protect the reputation of our financial sector in International markets, banks have been allowed to rape and pillage small businesses for years. It started before the credit crunch and it continues now. Even where there is indisputable evidence of misconduct and criminality, banks and bankers have been able to avoid any culpability by getting their shareholders to pay massive fines or persuading the authorities to rename fraud and theft as ‘mis-selling.’

I am hoping HBOS Reading will start to turn the tide and bankers will start to consider the possibility they too are subject to the common law that put Lynden Scourfield and his pals in jail for years. SME Alliance is working closely with the All Party Parliamentary Group on Fair banking to push for a more level playing field for SMEs abused by Corporate organisations because and as things stand - SMEs are not protected by inadequate regulators and for most, the cost of the Civil Court means it is not an option. We are also talking with Anthony Stansfeld, the Police and Crime Commissioner for Thames Valley who is pushing for our police forces to have bigger budgets that will allow them to investigate and prosecute allegations of economic crime. Ironically, the result of the credit crunch and the bank bailouts reduced police budgets and severely curtailed their ability to investigate bank fraud. Catch 22 – the Country was too impoverished to investigate the root cause of the austerity.

Post HBOS Reading and after years of struggling to get any real scrutiny of bank behaviour in the press, we now have any number of journalists eagerly asking for information. But of course, the only thing that will really stop the HBOS Readings, RBS GRG and the other Bank BSU’s experience, is for change inside the banks under the guidance of the kind of management that genuinely wants to restore proper corporate governance and re-establish faith and trust.

Personally I am not convinced RBS will ever be turned away from the dark side. Many SME Alliance members have very strong cases against RBS for their treatment in the bank’s Global Restructuring Group but even where regulators have told the bank to compensate victims, the process has been slow, biased to the bank and miserly in its outcomes. Their conduct is disappointing and immoral and this is a bank that was saved by the public purse and is still predominantly owned by the public.

Lloyds banking Group have said they are going to compensate the victims of HBOS Reading swiftly and appropriately. Lloyds CEO, Antonio Horta-Osorio, has repeatedly confirmed this will happen; Paul and I have had a letter from Lord Blackwell assuring us this will happen. Do I think it will?

I can only say I sincerely hope so. Not only from a victim’s point of view – we are very tired of life on the breadline – but also because if Lloyds were to lead the way on positive resolution for serious legacy issues, I think other banks would find it hard not to follow suit. I may not agree with some of the processes the bank has decided on but ultimately, I believe Lloyds Banking Group will take this opportunity to start regaining public trust. It would be a terrible waste if it didn’t.

The HBOS Reading story is far from finished and I’m reliably informed further investigations will commence or have already commenced. And there is another related criminal trial in November this year. I imagine it would be wise for Lloyds to avoid additional bad publicity for not compensating the victims. But I also think Lloyds will do the right thing because whereas other banks (and particularly RBS) are persistent in saying black is white and seem to have no empathy at all with their victims, Lloyds do seem sincere when saying they are going to take responsibility for HBOS and that their priority is assisting the victims.

To say this and not do it, would be a disaster for the bank and a disaster for the victims. The banking world has had enough disasters in recent times and any bank that can turn the face of banking around, even a tiny bit, will be a step in the right direction.

It would be good to know the HBOS Reading saga has caused positive change. For Paul and I it would be good to know the ten years we’ve spent investigating HBOS Reading were years well spent even if they have felt like ten years of wading through glue somewhere in downtown hell! While we take no personal pleasure in the fact our bank manager, Lynden Scourfield and his associates have gone to jail for a very long time, we are pleased the point has been made. Banks may still be too big to fail and I hope our next government will start recognising that as the major problem it is, but bankers are not too big to jail.

Many thanks to our good friend Ruth Bender and to Cranfield University for inviting my colleagues and I here this evening and many thanks for coming to hear us.

Nikki Turner for SME Alliance 31st May 2017.