An internal memo in which Royal Bank of Scotland staff were told to let small businesses “hang themselves” has been labelled disgraceful by MPs on the influential Treasury committee, ahead of a parliamentary debate.
Labour MP Clive Lewis will call for a public inquiry into banks’ behaviour towards small firms in a debate on Thursday at which allegations that RBS’s global restructuring group (GRG) drove companies to the wall for profit are set to resurface.
Ahead of the debate, the Treasury committee published a memo called “Just Hit Budget!” sent to GRG staff in 2009 and released by the bank to MPs.
The memo referred to struggling companies – many of which had been damaged by the banking crisis – as “basket cases”, while staff were advised that “missed opportunities will mean missed bonuses”.
In a section headed “Rope”, the bank’s employees were told: “Sometimes you need to let customers hang themselves.”
Alister Jack, Conservative MP for Dumfries and Galloway and a Treasury committee member, said: “At a time when banks had created a financial crisis, they should have been standing foursquare behind customers.”
“That memo highlights the disgraceful approach the bank took after getting themselves into difficulty, to then transfer problems on to customers whenever they had the opportunity.”
Fellow committee member Stewart Hosie MP, of the Scottish National Party, said: “The RBS memo makes shocking reading. It was a step by step guide to fleece RBS customers.”
In a letter to committee chair Nicky Morgan ahead of an appearance before the committee later this month, RBS chief executive Ross McEwan blamed “a junior manager who is no longer employed by the bank”, saying the memo was “not widely distributed”.
“For the avoidance of doubt, the language used in this document was completely unacceptable and the bank does not condone it,” he said.
The bank has said that in most cases, firms did not suffer “material financial distress” due to GRG’s actions.
At Thursday’s debate, Lewis will urge an independent inquiry into how banks treat small business customers and call for a tribunal system to deal with financial disputes involving them.
What RBS staff were told
“If they sign, they can’t complain.”
“Missed opportunities will mean missed bonuses.”
“Basket cases: Time consuming but remunerative.”
“Rope: Sometimes you need to let customers hang themselves.”