Vince Cable is demanding an urgent meeting with the boss of Lloyds Banking Group after the bailed-out bank made deep cuts to the number of its small business experts.
The business secretary wrote to António Horta-Osório on Wednesday night after Lloyds said half the relationship managers handling small business queries that their roles were being made redundant as part of a long-running strategic review.
The 560 roles in the commercial banking division were among more than 1,300 job cuts announced on Tuesday, taking total cuts under Horta-Osório, who took the helm in March 2011, to 11,760.
Cable's concerns about Lloyds came as one of his advisers – entrepreneur-in-residence Lawrence Tomlinson – accused the other bailed-out bank, Royal Bank of Scotland, of being like a "vampire" sucking cash out of otherwise good businesses.
Lloyds – 33% owned by the taxpayer since a tranche of shares was sold off in September – has largely avoided criticism of its approach to small business lending, with most of the concern about lack of credit being directed at RBS.
But Cable said he was very surprised and disappointed at the action taken over relationship managers. "Under its new management, Lloyds have made a virtue of breaking free of its past performance and culture.
In particular they have put relationships with small businesses at the core of their new approach. I welcomed this at the time and praised them on this basis," Cable said.
"So I am very surprised and disappointed to see the news that Lloyds has announced cuts that strike at the heart of these important commitments and put its focus on small businesses at risk." Lloyds said it would meet with the business secretary.
"We are committed to the relationship model and are the only bank to increase lending to small businesses since the new management team arrived," a Lloyds spokesman said.
Cable's remarks came shortly after Tomlinson's appearance before the Treasury select committee of MPs, sparked by his damaging allegations that RBS has been pushing businesses into its Global Restructuring Group (GRG) and forcing them to the brink to allow the bailed-out bank's West Register unit to buy their properties on the cheap.
"I find it really frustrating, this talk about zombie businesses and the fact banks are being so kind [to them]. I liken a lot of this zombie business to more like vampires," he said, claiming that firms are kept in the GRG and "as soon as they get any available cash to invest and grow, it's just taken away".
"Wherever I go, people come to me and tell me their tale of woe," said Tomlinson, who is based in Leeds and manages a business which manufactures sports cars and runs care homes. "What concerns me about it is: it's not just one region or one office. It could be in Bath, could be in Bradford or it could be over in Belfast."
He said that rather than being a unit of RBS aimed at helping turn around troubled businesses, GRG was more like a "debt collection agency". His allegations have sparked RBS to call in lawyers Clifford Chance to conduct an inquiry and for the Financial Conduct Authority to order an independent investigation as well.
Tomlinson said the investigators should be "shocked by the treatment of businesses, shocked by lives that have been ruined – not just businesses but people's lives".
He said that whistlebowers from within the banks were also hard to find. "I've never come across an industry where people are so scared to death [to speak out]," Tomlinson said.
theguardian.com
The business secretary wrote to António Horta-Osório on Wednesday night after Lloyds said half the relationship managers handling small business queries that their roles were being made redundant as part of a long-running strategic review.
The 560 roles in the commercial banking division were among more than 1,300 job cuts announced on Tuesday, taking total cuts under Horta-Osório, who took the helm in March 2011, to 11,760.
Cable's concerns about Lloyds came as one of his advisers – entrepreneur-in-residence Lawrence Tomlinson – accused the other bailed-out bank, Royal Bank of Scotland, of being like a "vampire" sucking cash out of otherwise good businesses.
Lloyds – 33% owned by the taxpayer since a tranche of shares was sold off in September – has largely avoided criticism of its approach to small business lending, with most of the concern about lack of credit being directed at RBS.
But Cable said he was very surprised and disappointed at the action taken over relationship managers. "Under its new management, Lloyds have made a virtue of breaking free of its past performance and culture.
In particular they have put relationships with small businesses at the core of their new approach. I welcomed this at the time and praised them on this basis," Cable said.
"So I am very surprised and disappointed to see the news that Lloyds has announced cuts that strike at the heart of these important commitments and put its focus on small businesses at risk." Lloyds said it would meet with the business secretary.
"We are committed to the relationship model and are the only bank to increase lending to small businesses since the new management team arrived," a Lloyds spokesman said.
Cable's remarks came shortly after Tomlinson's appearance before the Treasury select committee of MPs, sparked by his damaging allegations that RBS has been pushing businesses into its Global Restructuring Group (GRG) and forcing them to the brink to allow the bailed-out bank's West Register unit to buy their properties on the cheap.
"I find it really frustrating, this talk about zombie businesses and the fact banks are being so kind [to them]. I liken a lot of this zombie business to more like vampires," he said, claiming that firms are kept in the GRG and "as soon as they get any available cash to invest and grow, it's just taken away".
"Wherever I go, people come to me and tell me their tale of woe," said Tomlinson, who is based in Leeds and manages a business which manufactures sports cars and runs care homes. "What concerns me about it is: it's not just one region or one office. It could be in Bath, could be in Bradford or it could be over in Belfast."
He said that rather than being a unit of RBS aimed at helping turn around troubled businesses, GRG was more like a "debt collection agency". His allegations have sparked RBS to call in lawyers Clifford Chance to conduct an inquiry and for the Financial Conduct Authority to order an independent investigation as well.
Tomlinson said the investigators should be "shocked by the treatment of businesses, shocked by lives that have been ruined – not just businesses but people's lives".
He said that whistlebowers from within the banks were also hard to find. "I've never come across an industry where people are so scared to death [to speak out]," Tomlinson said.
theguardian.com
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