Parliamentary sketch – Banking on our business to succeed

We don’t have any big business here in West Cornwall and Scilly. Big retailers, big banks and other companies have a presence, of course, but our local economy fundamentally depends on the success of our small and medium sized businesses and sole traders.

I have been waging a behind the scenes war on the banks and the way they treat our businesses. Banks are supposed to be business friendly, but, for the past decade or so, they have become parasites engaged in sharp practice by mis-selling complex interest rate swap agreements which they will have known were massively to the detriment of the small businesses they flog them to.

Instead of growing the economy and creating jobs, many small businesses have been held back, others put out of business altogether. That suits the banks. Every company that goes out of business has assets that can be sold and becomes a company which cannot seek redress.

I have taken up many cases on behalf of local businesses. One is Seasalt Ltd – I’m sure their shops, clothes and other products are very well known to local people. It is a business which was set up by Don Chadwick in Penzance in 1981 and now employs over 300 people, mainly in Cornwall.

That it remains in business is a miracle and a product of the dogged determination, creativity and perseverance of the family and their staff. They were mis-sold an inappropriate financial product by their bank in 2008. The bank’s subsequent refusal to accept responsibility for their conduct has constrained Seasalt’s growth and created uncertainty during the recent difficult economic times. However, Seasalt has, like so many other local companies, shown a level of resilience in spite of their mistreatment by the bank.

Most people are blissfully unaware of the challenges thrown at many local businesses. Seasalt was lucky as well as resilient and has survived these exploitative practices and are now coming out the other side. Other local businesses fought hard but have sadly had to throw in the towel with the consequence of debts, bankruptcy, loss of jobs and business opportunities.

The behaviour displayed by these “bully banks” is horrific. But it is encouraging to see that steady, albeit slow, progress is being made. However, it is extremely worrying and frustrating that hundreds of businesses continue to suffer due to a still inadequate Financial Conduct Authority scheme which still lacks real teeth.

I raised questions on behalf of local businesses with the Economic Secretary to the Treasury in a debate this week. It is important that the Government learns from the mistakes of its predecessor in allowing, in an unregulated market, banks to come up with new and creative rouses to milk the lifeblood from our entrepreneurs and job creators, holding back UK Plc.

The mistreatment of Seasalt by its previous bank has been disgraceful, but is a classic case of the kind of exploitative practices I have witnessed. We are turning the corner now and I hope that the banks – as well as hanging their heads in shame – will get behind businesses rather than try to suck them dry.

You can contact Andrew George by email: andrew.george.mp@parliament.uk. His constituency office can be contacted at Trewella, 18 Mennaye Road, Penzance, Cornwall, TR18 4NG. Telephone: 01736 360020.

Andrew George MP
Kernow a’n West ha Syllan
West Cornwall and the Scillies
Kwartron Porthia
Constituency of St Ives
Tel: 01736 360020
Fax: 01736 332866

8th April 2014