The Right Honourable Rishi Sunak MP Chancellor of the Exchequer HM Treasury 1 Horse Guards Road SW1A 2HQ

Andrew Bailey Governor Bank of England Threadneedle Street London EC2R 8AH

25 October 2020

Dear Sirs,

The Business Banking Resolution Service

We respectfully request your most urgent attention and action in relation to the premature roll out of the Business Banking Resolution Service (BBRS).

The scheme’s foundation relates to a letter published by the then Chancellor of the Exchequer Philip Hammond, almost two years ago in January 2019 to Stephen Jones, Head of UK Finance (copy enclosed).

In the letter, Philip Hammond stated:

“It is important that this scheme draws a line under the events of the past, allowing both businesses and banks to move forward”

“If it transpires that the scheme is not bringing resolution to a meaningful number of complaints, and as such is not going to achieve its objective of bringing closure to past complaints, then I would expect there to be further discussions around the scope of, and eligibility for the backward- looking scheme.”

BBRS a failure before it begins Following the completion of the Live Pilot on 28 August 2020, it has become abundantly clear for many UK SMEs with serious historical complaints, that UK Finance, the banks and the BBRS Board are failing to achieve on every level, the clear objectives identified by Phillip Hammond.

After 22 months of negotiation it is totally unacceptable that critically important issues surrounding eligibility criteria such as insolvency, consequential losses, the effects of participation in legal action, as well as in previous supposedly ‘independent’ review schemes, have still not been clarified or fairly resolved as promised before the service is launched.

This negatively impacts upon many UK SMEs still affected by the banks mistreatment of them, particularly following the 2008 crash, on critical issues such as: Interest Rate Hedging Products; Tailored Business Loans; the Lloyds HBOS fraud scandal; RBS GRG and other bank’s Business Support Units. As well as the issues of Vulture Funds; Abuse of Personal Guarantees, Hidden Margin and other undisclosed or fabricated credit facilities and bank documents (typical of those evidenced in the Signature Forgery Campaign currently under assessment by the NCA).

Live Pilot conflict Of the 300 or so SMEs that registered for the BBRS, following very limited publicity of the scheme, only 48 cases were progressed in the Live Pilot. However, the banks raised so many objections with them that a substantial amount of time was wasted. This further resulted in the majority of those complaints getting put on ice, pending the conclusion of the pilot and the promised confirmation of the schemes final eligibility criteria.

It is now 58 days since the pilot concluded. Yet despite the efforts of the SME representatives and the steering group, a lack of independent leadership of the BBRS, together with the continuing unreasonable conduct of UK Finance and the banks, has resulted in a scheme and proposition that remains prejudicial to 80% or more of SMEs requiring restitution through the backward- looking remit.

This wholly unsatisfactory situation has further led to the emergence of the rather bizarre and still undefined complaint ‘classification’ referred to as ‘borderline’ or ‘boundary’. The marginalisation of these cases, that will very likely form the main volume of historical complaints, suggests the banks are up to their old tricks of rigging yet another redress scheme in their favour. This is entirely unacceptable when these SMEs, many of whom are still waiting to be able to register for the scheme, have already suffered two decades of unrelenting misconduct and malpractice.

We ask you to consider that the only role the banks should have is that of writing the cheques that stem from the findings and nothing more. They should certainly not be designing the scheme as currently. After all, it would be negligent on their part if they did not seek to manipulate it as the evidence so conclusively shows they have and of others before it.

Misleading communications The BBRS published two reports on the Live Pilot declaring it was a resounding success. This is misleading when consideration is given to the very limited frame of reference involved in their production. As well as the numerous unresolved issues we are bringing to your attention in this letter, which were not meaningfully addressed in the reports.

To tout the pilot a success, but ignore the pilot established that the banks strongly objected to 80% or more of complaints, is disingenuous conduct by the BBRS at best. At worst it could be seen as a dishonest and manipulative attempt to make the scheme appear viable and the only option available to SMEs.

To further compound these contentious issues, the BBRS also recently made a number of incorrect and controversial statements to the media, scheme registrants and participants of the Live Pilot. These suggested the service might be ‘refocused’ from historic complaints onto future Covid related cases, following possible encouragement from the Treasury. They also indicated that the contemporary service would soon be launching, while the final eligibility criteria for the backward-looking scheme and borderline/boundary cases would remain unresolved.

It can be concluded from all this that the BBRS management is projecting an altogether inaccurate picture of the scheme as being successful, independent, accessible and fair.

Lessons not learned The key to this scheme is the word Resolution. Unfortunately, however, UK Finance and the banks continue to demonstrate they have failed to learn from past mistakes. They have not undergone any measurable cultural change, and still have no obvious intention of bringing closure to a meaningful number of historic complaints, in a fair and reasonable manner as promised.

On this basis it would be unreasonable to conceive that UK Finance, the banks and the apparently conflicted BBRS management, would treat future disputes fairly and honestly. The substantial damage this corrosive attitude and conduct will continue to inflict on the UK economy, at such a critical time, should not be underestimated, nor allowed to continue.

It would therefore be a further betrayal of affected SMEs if UK Finance, the banks and the BBRS were to be given the seal of approval by Her Majesty’s Government and the Treasury through the hosting of the scheme’s premature launch, at what can only be seen to be an inappropriate and celebratory gathering, already scheduled to take place in Westminster on 1st December 2020.

Failure to act now before the launch of the service, will lead to further public grievance and a continuing lack of trust and confidence in the Government, the Treasury and the regulator’s ability to properly provide effective safeguards in small business lending. Especially in the continuing absence of a proper legal framework, which would undoubtedly be required in combination with a Royal Commission or Independent Public Inquiry, if the BBRS continues to fail to achieve the clear objectives set out by Phillip Hammond.

Working together If the BBRS is to prove valuable to the future of the UK economy, it can only do so from a firm foundation established and operated by truly independent executives and experts.

We also firmly believe that to have credibility now, and in the future, all banks / lenders should be participants in this scheme and that every complaint, regardless of the classification must be heard.

Therefore, as a collective, we ask you Chancellor to personally intervene by way of requesting the BBRS Board, its stakeholders and steering group submit to participation in a Roundtable meeting.

We would further propose that a small number of truly independent experts would present more detailed and fully substantiated concerns at that meeting, to ensure the contentious issues that critically affect and govern the backward-looking scheme may be dealt with more robustly than has so far been achieved.

It is our intention that these experts will be recommended / selected, to the satisfaction of the SMEs supporting this letter, by truly independent and trusted senior figures with direct and relevant experience of these matters.

Everyone needs an honest transparent scheme that works and is fully independent and has the attributes described which are and should be the only qualities and characteristics you and the Government should be content to sanction into existence.

Chancellor. Governor. We very much trust that you will capitalise on this unique opportunity to ensure the BBRS is a truly independent dispute resolution scheme and catalyst for real cultural change. This would be the best way to start to rebuild public and SME confidence in the integrity and trustworthiness of the U.K. banking and financial services sector.

Yours sincerely,

1. Andrew Candy Surrey Graphic Design / Art Gallery 2. John Guidi Glasgow Estate Agent 3. Lloyds Remediation UK Support Group (100+ UK SMEs) 4. Mike McGrath Cardiff Builders 5. Trevor Mealham Somerset Estate Agent 6. Julia Davey UK Property Development & Hoteliers 7. Jonathan Jones UK Spar Grocery Chain & Groceries 8. Prof. Nigel Harper UK Chartered Banker 9. Sir Norman Lamb Norfolk Politician, solicitor and former MP 10. Bank Confidential UK Whistleblowing Protection & Advice 11. Mark Wright Norfolk Bank Whistleblower 12. Steve Middleton Leeds Senior Adviser Bank Confidential 13. Mark Banister Kent Banking Reform Campaigner 14. Paul Carlier Kent Former Lloyds Bank Dir. & Whistleblower 15. Clive May North Wales Building Contractor 16. Heenan Gray Lancashire Campaigner for Fair Financial Services 17. Imram & Seema Alia London Property Development 18. David & Jackie Barron Berkshire Precision Engineering 19. Julia Barrington-Fuller Essex Vehicle Storage & Salvage 20. Gary Bashford Sussex Property Development 21. Mark Berry Cheshire Building Contractor 22. Cregan Boyd N. Ireland Motorsport Technology 23. Paul Clark Norwich Haulage Contractor 24. Derek Cullen Rochdale Residential Investment 25. Paul Davey Lincolnshire Agriculture 26. Brian Elliot Lechfield Farming 27. Jane Farmer Kent Events & Promotions 28. David Farndon Manchester Property Investor 29. Stephen Finch Greater Manchester Hoteliers 30. Debbie Giglio Manchester Cycling Shop & Business 31. Roger Giles Cambridge Landscaping Contractors 32. Catherine & Nigel Jarvis Northumberland Accommodation & Tourism 33. Joan Keeley Kent Property Investor 34. Stephen Lilley Cleveland DIY & Repairs Shop 35. Mike Lloyd Sussex Chain of Pubs 36. William May Hereford Agriculture 37. John Melton Barnsley Property Investor 38. Anthony Molyneaux Manchester Builder 39. C. Guidi Lanarkshire Property Investor 40. Gurch Samra Coventry Building Contractors 41. Joe & Tereasa Jeavons Cornwall Hoteliers 42. Caroline Shires Hampshire Farming 43. Scott Simpson Barnsley Property Management 44. David Taylor Manchester Haulage Contractor 45. Jeff Taylor Gloucestershire Farming 46. Peter Way Swansea Food Service Contracting 47. Andrea Willows Midlands Wedding & Events Venue 48. George Winter Durham Property Development & Management 49. Francis Wood Somerset Farming 50. Carol Woolcott Inverclyde Builders

All correspondence:

Mr Andrew Candy 020 8647 1800 07989 851 377 [email protected]

Mr John Guidi 0141 649 8899 07770 571 234 [email protected]

C/O 30-34 High Street Carshalton SM5 3AG