MPs Ready To Learn From Past Mistakes
1st February 2018.
Two powerful committees of MPs have launched separate inquiries into the protection of small businesses in the wake of the scandal surrounding RBS’ Global Restructuring Group (GRG), and the collapse of the construction company, Carillion.
While the GRG severed the relationship between small businesses and banks, the Carillion crisis highlighted the supply chain bullying and corporate harassment that small firms suffer at the hands of large firms. The ensuing investigations will hopefully take steps towards strengthening small businesses’ role within the wider economy and ensure they aren’t scared away. Here at the Credit Protection Association, we have many small business members and many have had little respite.
The Government inquiry will be conducted by two separate committees; the Treasuring, and the business select committee. The Treasury committee will analyse the devastation caused by GRG and attempt to restore the relationship between small businesses and banks, while the business select committee will focus on government support for small businesses and their maltreatment by large businesses.
On Tuesday, RBS’s top bosses – chief executive Ross McEwan and chairman Sir Howard Davies – admitted multiple failings at GRG in a bruising grilling by MPs on the Treasury committee.
Sir Howard admitted some behaviour by staff within GRG was “the stuff of nightmares”, including an internal memo unearthed that encouraged managers to give customers in financial distress enough rope to “hang themselves”.
Nicky Morgan, who chairs the Treasury committee, said the GRG case had “undermined the trust of small firms in banks”.
On the other side, Rachel Reeves, who chairs the BEIS committee, said Carillion’s failure had shown the stresses placed on small business finances.
“Deliberate supply chain bullying can be devastating for business owners and contributes to thousands of business deaths each year. We want to hear if the Government could be doing more to stop this,” she said.
These inquiries are clear steps towards the building of a new business landscape. Since Carillion, the plight of small firms has come under intense scrutiny. Large firms like Laing O’Rourke are still paying their suppliers late, and more needs to be done to stop this once and for all. The Credit Protection Association does all we can to keep late payers at bay and to get our members paid what they are owed. Many large firms still believe they are above paying on time and let their suppliers suffer as a result. Small business commissioner, Paul Uppal’s recent threats to bring in late payment legislation, along with this investigation, should finally force large firms to face up to bad payment behaviour.
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