BUSINESS Secretary Vince Cable has called on banks to look at their lending practices in the wake of Yorkshire entrepreneur Lawrence Tomlinson’s scathing report on Royal Bank of Scotland’s behaviour to small businesses.
Speaking to the Yorkshire Post during a visit to the region yesterday, Mr Cable said anecdotal evidence suggested that RBS might not be the only bank which needs to be investigated.
“A lot of people are getting in touch saying they have had similar experiences,” he said.
“So I want banks to look at it, particularly Lloyds, although it seems to be a particular problem for RBS.”
RBS has been accused by Mr Tomlinson, a government adviser, of pushing struggling small firms into its ‘turnaround’ unit, the Global Restructuring Group (GRG), so it could charge higher fees and interest, and take control of their assets.
Dr Cable has passed the report to City regulators, the Financial Conduct Authority and the Prudential Regulation Authority.
An RBS spokesman said earlier this week: “GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives.”
A Lloyds spokesman said yesterday: “The specific practices discussed in the report are attributed to another bank and are not a reflection of Lloyds Banking Group’s approach.”
Dr Cable was speaking during a visit to the Morrisons Farmers Boy processing site in Bradford yesterday to see the company’s investment in its manufacturing operation.
The supermarket has invested more than £31m over the past 18 months in the site, bringing a new pie preparation room, improvements to existing factory equipment and 150 new jobs.
Work on a new quiche line is ongoing and the £6.5m development is expected to bring 50 new jobs to the site when it is completed in the new year. It will have the capacity to produce 150,000 quiches a day and up to 650,000 a week in the height of summer.
Morrisons is the second biggest fresh food manufacturer in the UK. It has its own meat, produce, fish, bread and even flower factories among its 17 sites across the UK.
Dr Cable described Morrisons’ operation as ‘massively impressive’. “It is a distinctive model producing food from farm to shops and it has high quality standards and a high commitment to diversity in its labour force,” he said.
Dr Cable said Morrisons’ commitment to making the food it sells was a model other supermarkets should consider.
“I think the idea of big retailers who take care of their suppliers is a good one and would avoid a lot of the problems that farmers and suppliers have at the moment if other supermarkets did the same,” he said.
Morrisons chief executive Dalton Philips, added: “For us it’s about control, We want to have our fingerprints all over these products.”