SME Alliance, which supports business people in their disputes with banks, has accused HM Treasury (HMT) and the Financial Conduct Authority (FCA) of failing British business and caving into the big banks in their refusal to set up a fair, independent and transparent system for resolving disputes between SMEs and their lenders.

In their response to the Treasury Select Committee’s 24th Report on SME finance, both HMT and the FCA have refused to regulate SME lending, or set up the Tribunal system advocated by MPs, businesses and some banks. Instead they are allowing UK Finance, the banks’ own trade body, to set up an “independent” adjudication system. The Government and the regulator claim that there is not “a clear case for bringing SME lending into regulation, as there would be a number of direct and indirect costs” and also argue that “the financial services industry has changed significantly”.

Nikki Turner, director of SME Alliance, said: “The Government and the FCA are betraying British businesses, while acknowledging they are the backbone of this country, because they are unwilling to take on the big banks. Instead of putting in place regulation that would protect businesses and create a truly independent tribunal system to deal with disputes, they are allowing the big banks to run their own mechanism, which is on their terms, effectively letting the banks mark their own homework.

“This has created a farcical situation where SMEs become ‘too big to regulate’ because the banks are ‘too big to challenge’. Yet again business owners have been denied access to justice.

“The arguments used by FCA and HMT are flawed. They only need to look to Ireland to see a regulatory system that is working for SMEs without onerous extra costs. The idea that because the banks are not behaving as badly as they did a decade ago, it’s all OK, is like inviting Hannibal Lecter to dinner because he hasn’t killed anyone recently.” 

Two of the leading challenger banks – Metro and TSB – have joined calls by the Treasury Select Committee, the All-Party Parliamentary Group on Fair Business Banking and SME Alliance for an independent tribunal to rule on disputes between SMEs and their banks.

Members of SME Alliance are currently battling many of the major UK banks for compensation, with high profile cases against Lloyds Banking Group and RBS leading to claims for hundreds of millions of pounds of recompense for unethical, oppressive and illegal behaviour.
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SME Alliance was formed in September 2014 to support SMEs “battling against fraud, corruption and misconduct in the financial sector” and to lobby for the fair treatment of businesses by their banks and advisors.

First and most importantly, thank you to everyone who has helped SME Alliance and its members in so many ways during what has been another tough year. Although a few members have managed settlements in a few cases, that has been the exception rather than the rule and let no one tell you those settlements were generous in any true sense of the word.


Generally, and I am not sure whether I'm still surprised about this or not, too many bankers and their advisors still seem to think claims for fair and reasonable compensation for lives and businesses destroyed between one and two decades ago, amounts to a war. They battle on ( as I've said before this year) regardless of the huge personal damage they continue to cause. They've either lost sight of what went on over a decade ago, or just as conveniently, have tried to bury it all, by re-writing history.


Any ideas of just "doing the right thing for a change " seem to be completely outside their blinkered vision. For them, it seems also, the massive adverse PR and indeed, as we have been told, the actual loss of business, seems to be acceptable collateral damage.


The recent Advice from Jonathan Laidlaw QC , drove a horse and cart through Lloyds Bank's " Griggs Review". The FCA also was criticised strongly.  How embarrassing it was during a recent debate, to hear a Minister attempt to defend the indefensible. Ministers, unlike many supportive constituent MPs, think the five million or so SMEs employing over 25 million people , are just nothing to do with them.


On a wider basis it is clear to most of us that almost no one ( except apparently SME Alliance and its members and friends and a few MPs) is prepared to stand up to what have been described as criminally corrupt bankers and their advisors.


If anyone still doubts this idea of corruption, have a look not only at the Advice mentioned above, but also the damning report written by Sally Masterton, " Project Lord Turnbull" issued earlier this year. Five years on, Lloyds finally admitted they had in fact commissioned the report in 2013, after half a decade of denials.

The Report makes devastating reading. Meanwhile the NCA, the SFO, the FRC and the FCA, to name just a few disinterested parties, apparently hope this will all just go away.


Turning to the 72 per cent taxpayer disaster which is RBS, it perhaps the board thinks  has got off lightly this year because of our greater focus on Lloyds. It seems fairly clear to me that the spotlight will be brightly back to shine on RBS and its GRG division in 2019.


May I remind everyone that SME Alliance is a small group of people but one which tries to punch well above its weight. We can do this only because we are extremely focused. We are not trying to change the world, not even the banking system. We are trying to make sure our members get the compensation to which they are entitled so that they can get on with their lives.


I would also like to thank many in the media who have been so supportive with their time this year as well as members of the APPG on Fair Banking ( special mention for Kevin Hollinrake) as well as many MPs who have been helping individual members.
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We will keep fighting because it is to our mind unacceptable that major financial institutions such as Lloyds , RBS and other banks  and in particular certain senior executives and executive directors of those banks, should continue to deny and cover up the enormous human and other damage they have caused and continue to cause and believe they are and remain above the law.

Best wishes,
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Nick Gould

​19 December 2018
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Treasury and FCA have become Lloyds’ lapdog in response to Griggs compensation farce
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Victims of the HBOS Reading scandal have reacted angrily to the announcement by City minister John Glenn MP that Lloyds Banking Group (LBG) will be allowed to conduct its own review into the flawed compensation scheme for HBOS Reading victims.

Speaking on behalf of the Government at the end of a Westminster Hall debate into the LBG’s compensation scheme for HBOS Reading victims, Mr Glenn said HM Treasury had agreed that the Financial Conduct Authority (FCA) and LBG would appoint an “independent reviewer” to assess LBG’s compensation scheme. This is despite the FCA agreeing to the original scheme and the appointment of a supposedly independent chair in Professor Russell Griggs, even though he had a prior business relationship with LBG.

The scheme was set up in April 2017 to provide, in the words of LBG chief executive Antonio Horta Osorio, “fair, swift and appropriate compensation for the victims of the HBOS Reading fraud.”

However, 20 months on, many victims are still awaiting fair compensation. An in-depth opinion from Jonathan Laidlaw QC, who has represented The Bank of England among others, found that the review is “procedurally defective and “unfair” and its methodology and guiding principles are “flawed and appear partial to LBG’s interests”. He concluded “to genuinely right the wrongs of the past, LBG should revisit the serious shortcomings of the Griggs Review and the FCA should commence its investigations and disciplinary process without further delay.”

SME Alliance, which is supporting many of the HBOS Reading victims, said that the reaction by HM Treasury, along with its recent support for a bank sponsored review system for SME complaints, showed that it is bending over backwards to placate untrustworthy bankers.

Said Nick Gould, chair of SME Alliance: “The Treasury and the FCA have become Lloyds’ lapdog. Allowing Lloyds to appoint its own ‘independent’ assessor once, could be dismissed as weird, but twice smacks of either arrogance or complicity. By commissioning a review of the Griggs process, the Treasury, FCA and Lloyds are accepting explicitly that Russell Griggs was not independent.

“The other key failing of this defective proposal is that it kicks a solution further down the road. and Many HBOS Reading victims have already been waiting more than a decade to get fair recompense for losing their livelihoods and more which has led to years of undue stress. It is extraordinary that Lloyds still seems to ignore the human aspects of this on-going nightmare.”

SME Alliance also supports the call made by Kevin Hollinrake MP, chair of the All-Party Parliamentary Group on Fair Business Banking, during the debate for Mr Horta Osorio to resign. It also thanked all the MPs who contributed to the debate, notably Ed Vaizey MP, who spoke at the first parliamentary debate into HBOS Reading 10 years ago.

SME Alliance has already filed a formal complaint to the FCA under the Senior Managers and Certification Regime about the conduct of executive directors at LBG, in which it alleges that “Antonio Horta-Osório has been aware of the evidence of serious criminal conduct originating at HBOS Reading at least since 19th April 2011.”

In February 2017 six people were jailed for a total of 47 years and nine months for a fraud both HBOS, and subsequently LBG insisted for many years, did not happen despite many internal reports into the fraud from 2007. In April 2017, LBG set up a process which Mr Horta-Osorio said would provide “provide fair, swift and appropriate compensation for the victims of the HBOS Reading fraud.”
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About SME Alliance
SME Alliance was formed in September 2014 to support SMEs “battling against fraud, corruption and misconduct in the financial sector” and to lobby for the fair treatment of businesses by their banks and advisors.

17th December 2018

Leading fraud QC demands Lloyds revisit “defective”, “unfair” and “partial” compensation scheme for HBOS Reading victims
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Calls for regulatory investigation into “lack of integrity” by senior Lloyds directors ​