Bernard Ginns: The bank, the businessman and bursting of the bubble

Over the decades, the Wakefield businessman built up a property investment company with more than 500 properties across Yorkshire with a combined value of £100m.

He said the bank approached him a year ago with new terms, which he described as “prohibitive”.

“We felt we had to go somewhere else,” said Mr Woodhead, 73.

“Sadly. there’s a lot of customers we know that cannot find another bank because they are too highly geared so they have had to accept the terms on the table with Yorkshire Bank.”

Woodhead Investments refinanced with Handelsbanken, which is rapidly expanding its operations in the UK in the wake of the financial crisis as rivals retrench. Mr Woodhead said: “Handelsbanken has given us a war chest, a funding arrangement for the future, which we did not have with Yorkshire Bank.”

He said his estate was revalued at £90m ahead of the refinancing. Mr Woodhead added: “Never before have I been more than 30 per cent geared. Now we have around 45-50 per cent. That’s really more than we have ever been geared.”

Yorkshire Bank announced at the start of the year that it would be halting new commercial property lending. Last month, Yorkshire and its parent Clydesdale Bank transferred its £5.6bn commercial real estate business to its Australian owner, National Australia Bank.

NAB’s UK operations reported a statutory loss of £470m in the year to September 2012. David Thorburn, the UK chief executive, spoke of “further deterioration” in the commercial property market in a statement last month.

Mr Woodhead feels aggrieved at the way he has been treated after banking with Yorkshire Bank for so many years. “We have never, ever breached a covenant,” he said.

Mr Woodhead said the “rot started” in around 2005 when the bank “started throwing money out left, right and centre” at commercial property and “wannabe millionaires with white socks, gold medallions and Porsches”.

“They have all disappeared now,” said Mr Woodhead.

He started in business in 1963 as an estate agent in Wakefield. His two sons, Mark and David, are directors in Woodhead Investments. The company employs 30 tradesmen and 12 office staff and specialises in retail, office, residential, industrial, and agricultural property.

A spokesman for Yorkshire Bank said: “We are not doing new (commercial property) lending. The existing portfolio is being run down depending on the customer’s ability to pay. We are still providing finance for businesses to own their property.

“We are not doing new lending on commercial property portfolios.”

He said the UK commercial real estate balance sheet was transferred to NAB on October 5 along with some UK staff under TUPE arrangements.

This is what happens after a bank goes on a lending binge. Woodhead Investments was lucky. It was able to refinance on agreeable terms with another bank. Handelsbanken is certainly making a name for itself in the UK banking sector and providing some much-needed competition.

Other borrowers might not be so lucky and will find themselves under more onerous terms. Some might find them too much and fail. These are the inevitable consequences of too much credit. This is the reverse of the boom. And we are going to see a lot more of it before we can get a full recovery.

Business Secretary Vince Cable was on strident form this Sunday, telling the BBC that corporate tax avoidance is “completely unacceptable”.

He said: “The best off in society have got to contribute more, and that includes companies.”

The York-born MP added: “There’s nothing more galling to small and medium-sized enterprises when they are paying, and others are dodging it.

“Our own tax authorities have got to be very tough on things like royalty payments, which is where a lot of the subterfuge takes place.”

He also called for wider international agreement to help close loopholes in tax havens.

Andy Street, managing director of department store group John Lewis, joined the fray, warning that multinationals with offshore structures will “outinvest and ultimately out-trade” UK rivals.

Multinationals like Amazon, Google and Starbucks have all come under fire over their legal tax arrangements. Both Dr Cable and Mr Street have a strong point. The UK is struggling to balance its books and pay for vital services. Tax avoidance comes at a cost – the closure of these services.

The Government has to strike the right balance between encouraging companies to pay their fare share and making the UK an attractive place to invest.