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Apathy International. Does anyone really expect HSBC or wealthy tax evaders to be prosecuted?

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I had an interesting conversation on twitter last night with someone I don’t know from Canada – although I think he is British. The very topical subject was “why are wealthy people guilty of tax evasion not prosecuted?” And right from the start of the conversation my twitter friend, let’s call him Bill, made the point that in his view it would cost so much money and take so much time to prosecute them all, it would be counter productive. The cost would be more than the gain.

Bill is probably right. Tracking down the thousands of people identified by the Swiss Whistle blower (and let’s face it, as he says, his list is the tip of the iceberg) would cost a fortune and would probably result in very lengthy criminal trials where the only beneficiaries would be the lawyers. And Bill compared the situation to the gun amnesty used in the US. Hand in your unlicensed gun and we’ll say no more about it. Here the equivalent would be throw the tax man a few thousand pounds voluntarily and we’ll call it a day. I say a few thousand because, in the same way it wouldn’t be cost effective to prosecute these people, I can’t imagine HMRC have the manpower or even the will to do full on investigations into how much is actually owed?

My point was (and is) even considering the logistics of this situation, how can a democratic country ditch the law in the case of one section of society because it’s not cost effective to enforce law? Tax evasion is against the law and nowhere does it say “unless you are part of a rich minority who has been advised by your bank to shunt your money offshore.”

I also made the point HMRC will go through hell and high water to prosecute so called benefit cheats or even people on low incomes who may have been overpaid and then can’t pay it back. Similarly SMEs will be hounded for perceived VAT or tax issues and, if the man in the street doesn’t get all his tax returns in precisely on time and to their satisfaction, HMRC will be very efficient in sending out demands for what they calculate is owed or hefty fines. They also have no compunction about prosecuting for a few hundred pounds if they feel it is due. And that happens to thousands of people.

Bill made the point it doesn’t make any difference whether you cheat the tax man of £50.00 or £5M – it’s still against the law. I agree. So why do I have this horrible feeling you are less likely to be penalised for the £5M than the £50? And the same seems to be true of money laundering or other economic crimes. Big banks money laundering for drug cartels just get hefty fines paid by their shareholders but no one goes to jail. Here’s an extract from my book about HBOS (to be published in the dim and distant future) on these criminal but curiously acceptable transactions:

“And by the way, how does that happen? It’s common knowledge now that certain banks have done these totally illegal deals and, yet again, no one in any bank is to blame and instead, the shareholders have paid massive fines as a penalty for bankers conduct. But if no one’s to blame, how do the deals get done? Do the bosses of the drug cartels phone a special ‘money laundering’ call centre and listen to an anonymous voice giving various options: “Please dial 1 for drug deals, 2 for arms deals or 3 for off shore tax evasion. To hear these options again, please dial 4.” Or do the Banks have departments which deal specifically with these ‘dodgy transactions’ and where the staff work in the secure knowledge no one will ever go to jail for criminal deals because bankers are above the law?”

Then there’s other proven fraudulent products like IRHP – another fine. Out and out asset theft from SMEs – another fine. PPI, EFG, SFLG, it’s becoming like a game show – think of an acronym and the contestants get to guess the appropriate meaning and the applicable fine. Winner gets two weeks in the Caymen Islands all expenses (and of course taxes) paid by the FCA. But if you or I were to commit any deliberately fraudulent act to turn a quick profit, you could expect and get the full force of the law to come into force.

However, taxes and financial crime aside, what really disturbed me about my twitter conversation which, by the way, I thoroughly enjoyed because I love a good debate, was the apathy involved. While Bill agreed with me we shouldn’t have a two tier justice system, his very logical approach was, as Tony Soprano would say, wattayagonnado? We are where we are and there’s little we can do about it – apparently.

I am pretty sure the members of SME Alliance would not agree. Most of them (me included) have been victims of the many and varied banking scams which have devastated SMEs. Most of us have been fighting for justice for what seems like a lifetime and sometimes pretty much is and we are, putting it politely, extremely angry at the way banks, who have caused us so much damage, are never penalised except with shareholders fines. Neither are they obliged by the regulators to repair the damage done. So when we hear about people with very healthy off shore bank accounts, organised by their bank, becoming immune from prosecution, we are anything but apathetic, we’re furious. It’s another slap in the face of the British justice system and another reason we are losing faith in it.

But, being honest, I think back to my life before the consequences of fraudulent bankers and their associates kicked in – was I even aware of our two tier justice system? Admittedly inequality has got worse since the so called credit crunch but, if my business hadn’t been sabotaged and had instead fulfilled its full potential and made millions of pounds, would I be seriously concerned about the conduct of the likes of HSBC and its tax dodging clients? Would I be calling for prosecutions? Or would I be taking the rather detached and very logical approach Bill takes?

We have a saying in our house, “you can’t not know what you do know.” And that’s a shame because the things I now know after 7 years of investigating bank fraud and social injustice, very often stop me sleeping at night. I didn’t sleep much last night thinking it’s possible a massive segment of society may be so oblivious to what is happening to democracy or, more likely, just trying to get on with their own reduced circumstances in austerity Britain, they don’t even care about off shore accounts in Switzerland or Monaco. But I think (or should I say I hope) I would have been aware, albeit to a lesser degree, of the increasing dangers our democracy faces even if I hadn’t experienced the consequences personally. I’m a lyricist and a poet and I grew up listening to Bob Dylan and Joan Baez – so the spirit of protest has always been there. But who knows? As long as the comfortable remain comfortable, will they rock the boat? Hmmn. While apathy is, on the one hand a powerful tool for the State, it’s also a powerful tool for the individual conscience.

“If there is nothing I can do about injustice, no one can blame me for doing nothing.” It’s a scary concept but one that has helped permit every shameful human catastrophe.

Anyway, I don’t know what the resolution is to the HSBC tax evaders or the many other tax evaders who were no doubt advised by other banks. Quite frankly, I think those banks must be bricking it in case their own whistle blowers come forward. I agree with Bill, it is impractical to think HMRC can or will prosecute all of these people. But, and remembering this year sees the 800th birthday of the Magna Carta, if we are truly a democratic society, I cannot see how Government, or the appropriate authority, cannot prosecuted them? After all, one person has been prosecuted and surely that has set the precedent? And what was so special about that case? Seems a bit harsh – thousands do it but only one pays the price.

I wouldn’t like to be running this Country. Whatever good intentions any of our politicians have, there seems to be an endless barrage of obstacles in the way of good governance and most of those involve the necessity to compromise and close their eyes to the kind of corruption that is swamping the Country. Hard, I imagine, not to just go with the flow for the 5 years they are in power. And hardest for those in power as opposed to those in opposition where it’s easy to shout foul (especially if you have a short memory)!

If anyone thinks they have the answer to the current problem – is it possible to prosecute every criminal act in the financial system and the associated activities like tax evasion, I’d be happy to hear it and I’m sure many politicians would as well. If we did take this route, we’d have to build a lot more prisons because financial crime, without doubt, is more epidemic or contagious than the flu and we have no jab for it. We seem to have no cure for corruption.

I leave you with a poem I wrote in 2003. I rarely inflict poetry on my blog readers but this one seems entirely appropriate.

Apathy International

I am a member of

Apathy International.

I am working my way up in the company

and should shortly become

a bored member.

Membership was free

and just slipped onto my shoulders

during a raging storm,

like a comfortable old raincoat.

The effects are almost unnoticeable

as is everything else now.

And, as in all such large organisations,

only non members receive active attention,

so I fully expect to disappear completely and painlessly any day now.

(Which I really can’t worry about).

But late at night I wake up

terrified

as a distant but unfiltered image of raw gaping wounds stabs me

and I can hear the hideous cackle of the devil’s favourite shareholders

and I recognise the voice of our beloved CEO crooning

and I think I will implode with panic.

But in the grey reasoned morning light

I think –

what could I do? Nothing.

So I don’t –

except to gently fondle my membership badge.

© Nikki Turner 2003

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Bad Saturday – Twenty people with teacups can’t stop the flames of the next credit crunch.

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Not a good start to a Saturday. First the post arrived and it was one letter with a barely legible hand written envelope to Mr P Turner – well done to our postman for deciphering the address. All the same we could see immediately who it came from because of the Royal Courts of Justice stamp on it. We were surprised because we don’t have a pending case in the Courts. What we do have is an indefinitely stayed case regarding our never ending eviction hearings. It’s stayed pending the outcome of the HBOS Reading trials which were due to start in January 2015, were moved to September 2015 and, a couple of weeks ago, were moved again to 2016.

For those reading this who don’t know anything about Paul and I, we have spent years investigating and exposing a major bank scandal. It took us from mid 2007 to September 2009 to get the regulator involved and then another year to get the police involved even although we reported it in December 2007. For our troubles, HBOS and then Lloyds Banking Group tried to evict us 20 times and on their last attempt a Circuit Judge allowed it and refused us permission to appeal. So our last hearing was the second of 2 in the High Court where we were asking for and then granted permission to appeal. That was in August 2010. However, by this time the police were involved and the first arrests in the case were in September 2010. So in December 2010 the Bank asked us to agree to an indefinite suspension of any eviction hearing on the grounds both we and they were witnesses in criminal proceedings – it wouldn’t do for witnesses to be fighting each other. That’s where we are – on hold until the criminal trials are over and God only knows when that will happen – although thinking about it, God probably doesn’t know either.

Anyway, the letter, or rather the form from the Courts this morning, informed us that our case is now closed and we have 14 days to retrieve our paper work or it will be destroyed.

This could mean one of two things: First, a clerk in the court, tasked with filing, has seen the date on our case and assumed it must be over, or sorted, or in any event not going ahead because it’s dated 2010. I might make that assumption myself in the same way I would have assumed the HBOS Reading trials would have been over 4+ years after people were arrested. And if this is the case, which I hope it is, we simply have to inform the Court our case is not over and is still active.

The second and darker scenario is that this is some form of legal trickery by the Bank to get the case out of the High Court and maybe back to a friendly Circuit Judge. I can’t see why the Bank would do this or how it would be advantageous to them when they could simply carry on waiting for the criminal case to start which could be never? But, while I repeatedly say (these days and as a founder of SME Alliance) that I firmly believe there are good banks and good bankers, sadly I don’t include Lloyds Banking Group or team Horta-Osorio in that bracket. And I am always waiting for their next malicious move.

You don’t hear much about HBOS these days although there was a small flurry of news when it was reported the FCA review into HBOS (like the HBOS Reading trials) has been delayed yet again – until after the election. Well there’s a surprise. But I don’t think this is because anyone in Government or in the FCA/PRA has forgotten about HBOS – we are constantly reminding them it remains unresolved. I think it’s still a priority – or at least burying what happened at HBOS is still a priority.

Which leads me on to the second disturbing thing about this Saturday morning. Included in our e-mails this morning were a couple from our friends at WBUK (whistle blowers) who wanted to share a video on Youtube. The video is of ‘The Spaniard’ interviewing a former employee of the FSA/FCA turned whistle blower. https://www.youtube.com/watch?v=bS5c1FmVL8M

The whistle blower, who almost certainly isn’t called ‘Joanne’, says she worked in the financial sector for 15, 16 years and her last job was to help the FCA write mortgage policy so a financial crisis couldn’t happen again (so she was looking at what happened with sub prime) – I have no reason to doubt what she’s saying. She also says or confirms what a lot of us have felt for a very long time – the regulator is paid for and controlled by the banks.

This is not a revelation and I do remember a senior enforcement officer of the FSA telling Paul and I the FSA BoS Censure Report of March 2012 could have been published two years before it was but for Lloyds stopping it – which was a clear case of the tail wagging the dog.

Ridiculously maybe, even people like me who have battled long and hard with the FSA for 7+ years, still hope there is an element of good intention in the Regulator’s office and that ultimately, it will do what it says on the tin – i.e. regulate, control and, where necessary penalise the banks and bankers to stop them doing more damage to the economy and to society as a whole.

Some would say that is a very naïve view and one I have no excuse for holding but actually, it is essential we hold on to this hope because the alternative is too dark to consider. Which is why I found ‘Joanne’s’ words so depressing this morning. I am a member of WBUK and I know there is no glory to blowing the whistle. Whether you blow the whistle on the MoD, NHS or the financial sector, all you will get for your efforts is aggravation, alienation and sadly, in many cases, persecution leading to serious depression. So I think Joanne would have thought long and hard before she did this interview.

It’s quite hard to hear what she’s saying because it was a telephone interview so I’ve transcribed a couple of extracts:

“….it was all about making sure you work with the banks to protect the banks, not to protect the people. It’s definitely not independent – everything had to go back through the banks, even the wall to wall control by banks – it was absolutely astonishing. I was amazed at the amount of politics that was there and the fact that everything had to be referred back to – did it reflect well on the Government, did it reflect well on the banks – and that was the aim of everything.”

“…. and in my opinion there were rules already in place that could have been used to prosecute banks and could have been used to hold somebody to account for what happened in the massive mortgage mis-selling scandals. But they weren’t because nobody had the will to. Because that’s not what we were there to do – we were there to give the impression that’s what we were doing but you weren’t actually supposed to do it.”

I would have transcribed more but it’s too depressing – maybe I will tomorrow. In short, what Joanne is saying is, all the harsh words from politicians, from the Treasury, from the regulators about how bad our banks are and what is being done to reform them, are no more than lip service put regularly in the public arena to deceive us. In reality the banks have been and are still holding all the cards and pulling all the strings. When you go to the regulator with a serious complaint, you are really sharing information with the banks and they will decide how it is dealt with. If Joanne is right in her allegations then Paul and I have furnished the Bank with 35,000 pieces of evidence about HBOS Reading. Not very clever of us.

Back to this morning’s post and Mr HO. I have no faith or trust that the HBOS Reading trials will ever go ahead – I hope I’m wrong but considering Joanne’s words, it seems unlikely the establishment would allow such a controversial story to come out. Similarly the FCA report into HBOS. If regulation is all about protecting banks and not the people, HBOS is a hot potato that at all costs must be mashed to a pulp and then smothered in a gluttonous gravy that makes it impossible to recognise let alone swallow.

While Ian Fraser’s brilliant book ‘Shredded’ (which I would advise everyone to read) exposed the horrendous goings on at RBS, there has been no major criminal case involving RBS bankers which would put Ian’s research in the spotlight and directly in full view of the Court of Public Opinion. Not so HBOS – we’re waiting for a major criminal trial to proceed and a major FCA review to be published. Additionally, there is at least one book taking a very candid look at HBOS waiting to come out and that is over and above the fact no one can doubt, after his years of blogging and articles, Ian Fraser is a font of knowledge about HBOS as well as RBS. Of course all concerned will abide by the rules of sub judice until the criminal trials are over but none of this will fit the criteria of “ did it reflect well on the Government, did it reflect well on the banks” Clearly not. So will the authorities ever allow HBOS to be fully exposed? Probably not.

And if that is the case, the only other place where much of the truth about the staggering misconduct in HBOS would come out, is in a High Court case when and if the Bank decide to re open our eviction hearings – although actually the stayed appeal is our case and we could also reopen it. Our defence in the eviction hearing is entirely based on what happened at HBOS Reading and the conduct of the management of HBOS and Lloyds after Reading was exposed.

So maybe the logic of the Bank and its high powered lawyers is to get our case out of the High Court where it could be as damaging as the criminal trials themselves? Or maybe our post this morning really was a case of a clerk having a tidy up? Who knows? Either way, Paul and I have learned a lot over the last 8 years and we will not be ignoring the Court letter.

I really, really hope that one day soon, someone, somewhere in authority, will decide enough is enough and bring about even a minor change of policy that starts reflecting the interests of the Country and its people over the interests of the Banks. I don’t think that someone will be David Cameron or George Osborne or Ed Miliband. All of this “first and foremost protect the banks” policy, started under New Labour and has progressed under the Conservatives. Sure, there are some really good cross party MPs or even Conservative or Labour MPs – but one swallow doesn’t make a summer and even a really good MP – my friend Clive May’s MP, David Hanson, is a very good example as is Brian Little’s MP, Jim Shannon – can’t change policy on his own.

Maybe Mark Carney who has said “no one is above the law”is the man for the job? And someone told me a while back that John Griffith-Jones is actually one of the good guys and I should talk to him – I would certainly like to and I would like to ask him for his comments on what Joanne has said. I would be so happy to see concrete evidence that actually the FCA considers “consumer protection” and “the reduction of financial crime” of equal importance to “market confidence.” But Joanne’s words make that hard to believe. Especially her comment when she was asked – if Wembley Stadium going up in flames equalled the credit crunch, how many fire engines would she say the FSA used to put the fire out? Her answer was:

…….“there was probably a line of twenty people with teacups.”

That is very scary and we should all be aware the only outcome of this situation continuing is the next fire won’t be contained to a stadium.

Many thanks to both the Spaniard at White Rabbit Education and ‘Joanne’, for bringing this insight (or is it incite?) to our attention.

First the Banks – are EU Regs, MOSS VAT & HMRC also trying to kill off UK SMEs?

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This is an unscheduled blog because this afternoon I read an article in the Telegraph about a proposed VAT reform which will literally kill off tens of thousands of SMEs. Here’s a link to the article: http://www.telegraph.co.uk/technology/internet/11295953/How-the-EU-is-throttling-online-business-with-idiotic-VAT-reform.html In short, what it says is every SME will have to pay VAT on every digital transaction to EU Countries as of January next year and this will expand to physical transactions in 2016. Therefore, even an aspiring author or musician or photographer selling their ebooks, digital images or mp3s – and maybe with a turnover of £5-£10,000 per annum will have to register for VAT, charge it to their EU customers and submit a mountain of paperwork to HMRC. They will also have to register for UK VAT even although they are exempt and under the threshold.

This begs the question of why we are part of the EU when the adverse consequences seem to outweigh the benefits? And what benefits? Surely one of the biggest benefits was we are free to trade with all our EU partners? Here’s a blog from Andrus Ansip at the EU Commission: https://ec.europa.eu/commission/2014-2019/ansip/blog/euvat_en

The first thing I noticed in the blog was this comment “The change in VAT rules was decided democratically, and after years of discussion, by EU Member States in 2008.” Democratically by who? Given it will affect SMEs so dramatically, I wonder how many SMEs were asked how they felt about it? And assuming it was a democratic process in EU terms, i.e the MEPs sat down over a nice lunch and agreed on this, how democratic were individual Governments and specifically ours, in asking if SMEs agreed? Personally I had no idea this was due to happen – maybe I just missed it? Admittedly I was very tied up exposing bank fraud in 2008 (another crippling tool to destroy SMEs) so I may have over looked it because I couldn’t trade my SME back then (or now). And, trailing through Goggle today, I have found plenty of news about this – although no front page news, so I have been asleep at the wheel but that doesn’t excuse the lunacy of it.

Why have the EU done this? Well according to Andrus, “ As I understand it, one of the aims was to establish a level-playing field for smaller companies. No more picking of low VAT countries by larger companies to gain a competitive advantage over SMEs.” Riggghht! This is to stop companies like Amazon exploiting tax loop holes by basing their digital content sales in Luxembourg. Fair enough, Amazon et.al will now have to pay millions in extra VAT payments. But does anyone really think they will absorb this cost? No. They will simply pass the cost on to the consumer. Not just the cost of the VAT but also the huge accountancy costs involved.

Andrus goes on to say “Now, some small and micro companies are worried about what the VAT changes coming on January 1 mean for them.” You bet they are. “Given that this change was adopted six years ago, Member States should have helped businesses to prepare.” Even if they had – what would that change?

Consider this: Joe Bloggs writes a book, turns it into an e-book and promotes and sells it via his own website. The e-book costs the buyer £2.00 + VAT for EU buyers. He sells 50 books in the UK – that’s OK he doesn’t have to charge VAT although he still has to be registered for VAT if he wants to sell in the EU. He sells 10 books in France, 15 in Germany, 5 in Italy and and 20 in Spain because his Aunty Mavis who lives in Benidorm persuades her friends to buy it. So that’s 100 books and 4 different VAT rates. There is apparently a “one stop shop” which will help with these varying VAT rates but I’m not sure how this works or, if I was Joe (and to an extent I am) whether I would want to take that route or just not sell to EU Countries.

Joe will have to do quarterly UK VAT returns even if he doesn’t charge VAT in the UK (he can just fill in 0 in all the boxes – so that’s not a waste of any one’s time!) and do separate VAT returns for his EU sales (no idea what happens with the rest of the world – is that still zero rated?). But because he does charge VAT for the EU he can deduct any expense relating to his EU sales from his overall VAT. And all this will be broken down and documented in the records of sales Joe must keep for years.

Now Joe, who is an excellent writer but not much of an accountant, could possibly struggle with the various rules and regulations he has to comply with – starting with, does he have to register at all or is what he does exempt? For example, these new rules don’t apply to: “supplies of goods, where the ordering and processing are electronic.”

But they do apply to: “images or text, such as photos, screensavers, e-books and other digitised documents e.g. pdf files, music, films and games…..”

I find that a bit confusing because ordering or processing an e-book is all done electronically isn’t it? So I looked at the section of the HMRC document entitled, “What is meant by electronically supplied?” and it explains: “This covers e-services which are automatically delivered over the internet, or an electronic network, where there is minimal or no human intervention. In practice, this means: Where the sale of the digital content is entirely automatic – for eg a customer clicks the ‘buy now’ button on a website and the: content downloads onto their device – customer receives an automated e-mail containing the content.”

So what part of a customer clicking “Buy Now” on your website and then receiving your e-book to download, isn’t covered in the above? Equally confusing is the section entitled “Examples of Electronic Supplies and Whether They Are Digital Services.” According to the chart, if Joe e-mails a pdf (his book) to someone, that is an E Service but it’s not covered by the new rules. However, if his pdf document is automatically e-mailed by the sellers (his) system or automatically downloaded from his site, then it is an E-Service and he does have to pay EU VAT to sell it in Europe. Hang on – didn’t it also say the new rules don’t apply to “supplies of goods, where the ordering and processing are electronic” or where the customer clicks the “buy now” and automatically downloads?

I won’t go through the rest of the document because I’m confused enough but here it is: https://www.gov.uk/government/publications/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance

I have a horrible feeling this EU VAT reform will be an absolute disaster for SMEs and it will either cause a lot to just stop trading or, it will cause them to stop bothering to be independent. What will be the point of Joe doing all this hard work (over and above writing his books) when the easiest option will be to sell it on Amazon in the first place and let them do the accountancy exercise? Yes Joe will get less money so Amazon can have a cut and his book will cost more because Amazon will pass on the EU VAT costs to the customers – but at least Joe won’t have a nervous breakdown doing a mountain of paperwork (which will no doubt result in massive fines if he gets it wrong) in order to sell 50 e-books to Europe. And there are 1000’s of Joe Bloggs in this Country who will do the same. I would even advise them to do so. So Amazon et.al could come out of this quite nicely.

Don’t get me wrong, I have two books on Amazon Kindle and it’s a very convenient site for writers. And ironically, I’ve had an e-mail this evening explaining the new charges anyone in Europe will have to pay for my books. But I am very aware small publishers will really struggle with this new system – the same as I would as a music publisher – which I was and would be but for HBOS.

End result? Whereas the internet gave millions of people and SMEs the opportunity to promote and sell their individual downloads all over the world – MOSS VAT + HMRC will now take that ability away. We will end up with half a dozen global platforms to sell digital or physical products across the Europe – and no doubt the world will follow. Sure they will have lots of subsidiaries but ultimately there will be a few Corporates running sales across the internet or to Europe.

The obvious solution was (and you don’t need to be a rocket scientist to work this out) – those digital traders or physical traders in the UK who sell in excess of the UK VAT exemption figure, should charge and, if applicable, pay VAT to the EU in the same way they do in the UK but at a flat rate agreed by the EU community to avoid unnecessary bureaucracy.

I would say to Mr Ansip, Mr Osborne and Mr Darling (who must have agreed this in the first place) that while MOSS VAT may bring in some cash from the big players avoiding tax, it will do them little harm and they’ll simply put prices up. But your new rules will be a disaster for SMEs, for the economy and for the morale of the Country.

For example, I know a young photographer who sells her images digitally and who has already considered the sad fact she will have to put a sign on her site saying – “Apologies, no sales to EU Countries.”

One might almost think our Government’s (present and past) are quite keen to see SMEs throw in the towel. First the banks and now this. What next?

And one last thought, why does Andrus Ansip say “As I understand it….” Surely this is an EU directive drafted in Brussels or Strasbourg wasn’t it? So he should know. Unless it was drafted elsewhere.

p.s If any accountant reading this can clarify what MOSS VAT really means to SMEs, please do post a reply or e-mail smealliance2014@gmail.com . I sincerely hope I have got this all wrong.

Christmas 2014 round up of financial crimes with no one going to jail.

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My husband made a very valid point a few days ago and I have been thinking about it every day since. He pointed out that when we (Paul and I) started looking at misconduct in the financial industry and specifically HBOS, we couldn’t get anyone to take our allegations seriously because no one believed us. That was in 2007 and it took until late 2009 to actually get the FSA involved and 2010 before the police got involved – even although we made allegations to the police in November 2007. We’re not a lot further forward now in December 2014 because the criminal trials for that alleged crime won’t start until September 2015 – and even then, I’m not holding my breath.

It was disappointing no one believed us in 2007 but not surprising because the idea banks, or rather bankers, might be crooks, was out of the question back then. Bankers were seen as respectable professionals and your bank manager was so trustworthy, he or she could even sign your passport. The same doesn’t apply now and no one bats an eyelid at the concept of crooked bankers – in fact bad conduct is what we expect from them, to the point even the good guys (yes I do acknowledge there are still many good bankers our there) are tarred with the same brush.

Paul’s point was simple: It was tough back in 2007 because no one believed us, so nothing was done. Now, everyone knows the financial sector is rife with fraud and corruption and still nothing has been done! Not just in the case we reported – right across the board and in thousands of cases. Even more alarming is the fact that, in many instances I know of, where people have tried to report financial crime, the police will not investigate it! In all probability this is because they don’t have the budgets to investigate such a glut of criminality in austerity Britain – but that is of no help to the victims who are frequently told – “it’s a civil matter.” No it’s not – crime is never a ‘civil matter’ and even victims of PPI have a right to report it as a crime, get a crime number and, if applicable, also have it investigated. Of course that might damage crime statistics.

But no. Most financial crime is just swept under the carpet as “mis-selling” or “restructuring” and resolved by bank shareholders’ paying huge fines to the FCA. Think about that for a moment – we all believe bankers have committed criminal acts but nothing has happened. It just beggars belief and is really as scary as hell because, what it actually means is, we can no longer rely on the Law and really do have a two tier criminal justice system. There isn’t another, plausible explanation.

This terrifying thought was brought home again when I read the latest excellent Matt Taibbi article in Rolling Stone magazine: http://www.rollingstone.com/politics/news/the-police-in-america-are-becoming-illegitimate-20141205 where he is talking about the disparities in the US legal system and it reminded me that I still haven’t had a reply to my letter to Mr Cameron of December 2012 when I asked for some clarification about the apparent immunity bankers have from prosecution. In that letter, which I wrote after reading some worrying comments from Andrew Bailey (now head of the PRA), I said:

“Mr Cameron, unless I am completely mistaken, Mr Bailey seems to be telling us that banks, and therefore bankers, are now officially considered to be above the law in this country and that, in the interests of confidence in the banking industry (which is already at rock bottom among the British public, and therefore can hardly sink any lower), they cannot be prosecuted.

I am writing to ask you, as Prime Minister, for some clarification.

Does your government endorse the notion that banks and bankers should be given a licence to commit criminal acts without any fear of prosecution? Is this now official government policy? Are the British public now being asked to accept that, despite incontrovertible evidence of multiple criminal acts by banks, including money-laundering, drug-money-laundering, Libor rigging, multiple frauds and assorted Ponzi schemes, bankers are considered to be immune from prosecution? And if so, can I ask on what grounds your government, or indeed the government of any democratic country, can justify such a policy?” Full letter here: http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

I didn’t write the letter to be confrontational – although I must admit I am incredibly disappointed the PM’s strong words in the run up to the last election about what should happen to criminal bankers, turned out to be hot air and no more. This is what he said to Jeff Randall in January 2009:

“I think that we need to look at the behaviour of banks and bankers and, where people have behaved inappropriately, that needs to be identified and if anyone has behaved criminally, in my view, there is a role for the criminal law and I don’t understand why is this country the regulatory authorities seem to be doing so little to investigate it, whereas in America they’re doing quite a lot.”

I wrote the letter because I genuinely wanted some reassurance from the Prime Minister that bankers are not above the law; we don’t have a two tier legal system and; something would be done to redress this inequitable situation.

So what has happened to clarify or allay my concerns since December 2012? Well a few things have happened but not what I was expecting. For example:

  1. I’ve never had a reply.

  2. Several banks have been found guilty of money laundering and even money laundering for drug cartels. And the only penalty has been a huge tax on the bank’s shareholders who have paid massive fines for the conduct of bankers. But no one has gone to jail.

*given that banks (buildings or legal entities) don’t have any physical ability to pick up the phone and negotiate with drug cartels – such deals had to be done by bankers. So why have no bankers been held responsible?

  1. Many banks have been found guilty of making billions of pounds with the PPI scam. They’ve had to pay the money back in many cases but, I assure you, not all cases. So again, the shareholders have lost a fortune. But no one has gone to jail.

* I often wonder who invented PPI? Did senior bankers sit down and plan how best to get thousands of their customers to take out insurance policies which cost them a fortune but could never be used? Or did someone in a bank find a recipe for creating and implementing PPI in a fortune cookie?

  1. As a founder member of SME Alliance, I talk every day to people whose businesses have been totally destroyed with various, ridiculously (and I would suggest deliberately) complicated financial products under the collective name of swaps. I’m not a victim of a swap and I know little about them (I’m learning fast) but even their titles smack of more contempt for businesses e.g. vanilla swaps. Can you have chocolate or strawberry? Probably. The FCA have said many of these products should never have been sold to ‘unsophisticated’ clients and in some cases banks have had to give the money back. However, the years it has taken for this to happen and the devastation these products have caused, apparently do not necessitate banks having to pay out billions in compensation. The redress scheme the FCA has come up with has conveniently been limited to peanuts – and no one has gone to jail.

* A journalist was telling me the other day of a case where someone challenged the FCA decision multiple times and was eventually awarded £500k – but of course the bank interest and charges on his account over the time it took to challenge the bank’s conduct meant the victim got nothing and the bank paid themselves £500k. You couldn’t make it up.

  1. The now infamous business recovery units like RBS/GRG have been merrily acquiring, appropriating, stealing their clients’ assets left right and centre and sadly RBS have not been working in isolation. It has caused outrage – it’s been all over the news, MPs have held debates on the subject, Committees have interviewed senior bankers and regulators and even the ever cautious BBC have suggested some bankers are crooks. http://www.bbc.co.uk/programmes/b04t6jy1 But no one has gone to jail.

* As a victim of HBOS Reading (similar model) I have so much to say on this – but am having to keep quiet for now but not forever.

  1. And while the likes of GRG and HBOS Reading have caused many businesses to fail, a separate scandal has specifically targeted farms across the Country for over 20 years. Repeated allegations have been made against a man called Des Phillips and various of the 59 companies he has been or is a director of including UK Farm Finance, UKCC and UK Acorn Finance. And some of our major banks have been heavily implicated in these allegations as have other ‘professionals’. It’s a sickening story which has resulted in many family farms being repossessed and, sadly, farmers committing suicide. You can hear about it here: http://www.bbc.co.uk/programmes/b040hzz5 or read about here: http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm141111/halltext/141111h0001.htm No one has been prosecuted so no one has gone to jail.

  2. Bankers or traders have been found guilty of rigging LIBOR. Again, massive fines have been levied – another penalty on shareholders. However, in this instance it looks possible some bankers will go to jail and one banker has even pleaded guilty. But let’s not get too excited that justice might be done. Read this: http://www.theguardian.com/business/2014/oct/07/banker-pleads-guilty-libor-rigging-rate-fixing

As you can see the banker concerned could get up to 10 years in jail but we don’t know who he is or what bank he worked for and reporting on this case is heavily restricted. Presumably, after the other three people charged have had their trials, we might know more. But I wouldn’t bet money on it – especially if the banker in question worked for one of the State subsidised banks. But it’s a start.

I could make the list much longer but, to date and looking at the 6 instances above, money laundering, PPI, Swaps, asset theft including farms and LIBOR rigging, it’s certain 1 person in the UK will go to jail and 4 people might. And when you look at the trail of poverty, misery, desperation and devastation these crimes have caused, it is unbelievably disappointing – not to mention scandalous, that our regulators, justice system and worse still, our Government, have let this happen. In fact it is morally and ethically reprehensible.

Of course individual bankers do go to jail quite regularly – they’re usually quite low down in the pecking order and their offences (with a few noticeable exceptions) just about make it into their local newspapers. But the top dogs – the ones who make policy – the ones who instigate and oversee the kind of conduct which allowed all of the above to happen, seem to remain above the law. Which begs the question – why do we have laws?

Meanwhile, the Government have issued the following figures regarding crimes to businesses:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/284818/crime-against-businesses-headlines-2013-pdf.pdf

I haven’t read it in any great detail but I’m pretty sure it doesn’t mention the wholesale destruction of SMEs by banks. I sometimes think we should move the Houses of Parliament to Canary Wharf and have done with it before La La Land spreads across the whole of London.

Here in the real world we are in the run up to what will be another very austere festive season for many people in Britain – and I’m not just talking about people or SMEs who have been defrauded by banks. I’m talking about those families who’ve lost jobs and/or benefits and most of all, those people relying on food banks or who have lost their homes and now live on the street. A lot of people would say – me included – our major banks and therefore our most senior bankers, were very instrumental in causing our national austerity. And, post the so called Credit Crunch, those same banks (especially the part State owned ones) have done little to help the economy and much to damage it further. Unbelievably, the people at the top of those banks continue to be heavily rewarded.

For example, yesterday (13th December) I was reading an article about the top paid European Bank CEO’s. http://www.cityam.com/1415705309/which-ceos-european-bank-have-biggest-pay-checks-two-uk-banks-take-second-and-third-place

Hmmm – £7.4M. Even when you deduct 50% tax, that still leaves approximately £71k a week. I think you could have one hell of a Christmas with that remuneration package!

Mind you, every silver lining has its own cloud and I suddenly thought – I bet it’s really tough finding the perfect Christmas gift for these top bankers because, what do you buy for the man or woman who has everything? So maybe La La Land has its own problems at Christmas.

Shame you can’t gift wrap integrity – if we could give some of them that, the whole Country might feel more festive. Still, there’s always the good old standby gift – Monopoly. After all, banks have bought, sold, packaged and mortgaged every property on the board many, many times over – but, to date, they have been very adept at steering clear of the “Go to Jail” square. But then I’m guessing Al Capone thought he would never lose ‘games’ either.

Did the Bank Wreck My Business? Yes – so what happens now?

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Did the Bank Wreck My Business? Yes – so what happens now?

I’m pretty sure the ratings for the excellent Panorama programme, ‘Did The Bank Wreck My Business’, were very high last Monday. Certainly most people I know watched it – but then many of them have direct experience of banking abuse at the hands of RBS or Lloyds – so they would. In fact most of them were interviewed by Andy Verity and Jon Coffey although their stories weren’t used in the programme. Some would say (and I would agree) there are many more horrific stories out there that the production team could have used – but it’s not a competition. Every business annihilated by bank misconduct (known to many as fraud), is a tragedy. And, given the Beeb’s generally conservative, establishment stance, I think it’s nothing short of a miracle this programme was as frank and exposing as it was.

As always, when programmes like this are on, I took some notes. I do it mostly to collect quotes for my book (nothing quite like “from the horses mouth”quotes to make points) but I also do it because I’m so staggered at what some people in the banking world say, it has to be captured in black and white for posterity. One day future generations will surely look back and ask “how the hell (being polite there) did a democratic country let that happen?”

I know the transcript of the programme will be available soon (or I hope it will) but here’s some of my favourite quotes from last night:

Jon Pain (RBS) “The whole purpose of GRG is to help customers return to financial health…..”

Vince Cable (BIS) “Well of course I’m very alarmed because good companies appear to have been put at risk or in some cases destroyed by banks behaviour…..”

Stephen Pegge (Lloyds) “our goal is to support businesses (you know) small and medium sized businesses are really important to us….”

Jon Pain (RBS) “(But) I would in no shape or form condone any inappropriate behaviour by anybody acting on behalf of RBS – that’s not part of our agenda in supporting customers.”

Christ Sullivan (RBS) to Andrew Tyrie re GRG “It is absolutely not a profit centre!”

Ross Finch (Lloyds victims) re his meeting with an exec of Cerberus who Lloyds sold his loan to “When I expressed disbelief about their behaviour, um, he said, “what you’ve got to understand is I am a prick” – which I couldn’t believe he would say such a thing!”

I’ve just pulled out those quotes because they are either so absurd or so shocking– and they’ve been broadcast on the BBC, the bastion of British correctness. If even the Beeb is exposing RBS and Lloyds as a bunch of crooks, what can we say? Nine years on from the so called Credit Crunch and where are we? I would say, if anything, we’re walking backwards. As one of the founder members of SME Alliance and a member of Whistleblowers UK ( Paul and I blew the whistle on HBOS Reading – the HBOS equivalent of GRG), I hear horror stories about banks v SMEs every single day. But the exposure of banking atrocities is no longer limited to what banks like to portray as ‘the niche market of poorly performing SMEs’. Everyone knows how bad some of our banks are and Andy Verity’s programme should be one of the final nails in the coffin of bad banking.

But will it be? Big question:

Vince Cable, Andrew Tyrie, the Treasury Select Committee, the FCA, the PRA, Mark Carney, David Cameron, Ed Miliband, Nick Clegg – did you watch “Did The Bank Wreck My Business’? And if you did – what are you going to do about it? They certainly didn’t wreck your businesses so I understand that maybe you don’t understand the consequences of what banks do. However, I do and so do thousands of SME owners, employee’s, shareholders and creditors. We live with the consequences.

I also know Andy Verity and Jon Coffey have done extensive research to make this programme and could have used any number of totally outrageous cases because they interviewed loads of SME owners (or ex SME owners) – and I know some of those stories may have been a step too far for the Beeb. In my own case sub judice was a big problem. But I know they made the programme in the spirit of stopping banks abusing SMEs. So has it worked? Has it helped? Will anything change?

Well the Panorama team have done their bit. David, Ed, Nick, Andrew, Mark – over to you. You are the people who can make the banks behave – or at least you should be. If the reality is you’re not – then wow, we have a serious problem in our democracy.

Best quote of the programme, without doubt, has to be Austin Mitchell MP, talking in Parliament about the Keith Ross case and saying it how it really is:

“What I want to do today is tell the story of the theft of a profitable Yorkshire company and I don’t mean the criminal Mafia we often speak of I mean Britain’s dark suited Mafia which in this case is represented by Lloyd Bank and Price Waterhouse Cooper both acting in collusion….”

Here’s the link from Hansard to Keith Elliot’s case: http://www.theyworkforyou.com/whall/?id=2013-11-12a.212.0

Of course, living in Italy for nearly 20 years, Austin’s comments would strike a chord with me. Well said Austin – there’s not many MP’s who would draw Parliament’s attention to the similarities between the banks and the Mafia but I would just put you straight on one thing – our dark suited Mafiosi are, in many cases, criminal.

I’m posting this on my own blog site because this is my own view – but I believe many people in SME Alliance will appreciate this view and I have to give us a plug because the conduct exposed in the programme is one of the reasons SME Alliance was formed.

#SME Alliance – giving SMEs a voice. #nooneisabovethelaw

Mark Carney says #nooneisabovethelaw now we need to work on #whocanaffordthelaw?

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On 24th September 30 people travelled from all over the Country to attend the first meeting of SMEalliance in the Old Council Chamber at the Law Society. It could have been double that number but, having asked our hosts, Rustem Guardian, for a room for 12 people, then 25 people, then 30 people, I felt it would have been rather rude to continually increase the numbers!  All the same we ended up with about 35 people. Rustem Guardian did us proud and we are enormously grateful to them for giving us such a fitting venue for our first meeting.

I say fitting because one of the key phrases that came out of the meeting was this:

“no one is above the law.”

Of course most people at the meeting were brought together because, as SME owners are very well aware, some people do seem to be above the law – which is, in part, the reason why so many SMEs are struggling and continue to be abused and especially (but by no means exclusively) by the financial sector. But the reality is  – and we need to remember it – in a working democracy, no one is above the law.

I raised this subject at the meeting because of a letter Paul and I received, dated 1st September 2014,  (1 day before SMEalliance was born) on behalf of Mark Carney, Governor of the Bank of England. We wrote to Mr Carney on 31st July 2014 and that is our first letter to him although we were in regular contact with Lord King from 2010 and he always replied, usually in person and with his private seal. Mervyn King (as he was in 2010) had asked to be kept fully informed of the progress of investigations into HBOS (ongoing) and I don’t make the point to infer we are buddies of Lord King’s,  I make it because by writing to him and getting replies, we were sure the BoE had critical information about malpractice in HBOS. So we were keen to make sure Mark Carney was similarly well informed. I can’t publish most of our letter or the reply for reasons of sub judice but I can publish this point we raised with the Governor:

Mr Carney, even as music publishers (there’s been little music publishing and lots of fraud investigation over the last 7 years), we understand the need to maintain international confidence in the City of London and our financial sector. But it would seem the attempts to indemnify bankers from crime in order to maintain that confidence, has resulted in the City becoming the ‘Wild West’ of the financial world. By not holding bankers to account individually when they break the law, we now have a situation whereby the banks feel their immunity to prosecution is a licence to further break the law. And they do so in the knowledge that, worst case scenario, their shareholders will pay huge fines while those bankers responsible for the good management and reputation of the banks, continue to get huge pay packets, bonuses and pension pots. Under such a scheme, where is the incentive for bankers to behave lawfully, morally and ethically?

The reply to this on behalf of the Governor was (I’ve redacted specific’s):

Your letter also notes a concern that regulators have not acted to penalise relevant individuals in relation to XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX and that bankers are somehow above the law and able to avoid prosecution. This is a view very much not shared by the Bank of England. As the Governors recent letter to Lord Blackwell made clear there is absolutely no doubt that bankers who are guilty of misconduct should face the regulatory and / or criminal consequences of their actions. No one is above the law.

I haven’t published that to annoy the Governor of the Bank of England by sharing private correspondence. On the contrary I’ve published it to make the point that in the “them v us” scenario many SME owners feel exists between businesses and the establishment,  we have a lot of shared views. And I may be very naive but I was actually delighted to read the headline in the Huff Post today:  Mark Carney Tears Into Bad Bankers For ‘Getting Away With It’

http://www.huffingtonpost.co.uk/2014/10/13/mark-carney-bankers-banking_n_5975494.html

I am not saying our letter to the Governor made an impact but, on the other hand, maybe he is aware of the bad conduct of banks towards SMEs – maybe we can get our message across to people like Mark Carney and maybe now if the time to resolve a “failure to communicate” situation that has existed for far too long. I really hope we can remedy that with SMEalliance. We can open a real dialogue with people who can help us get change – and this time, the message won’t be from people paid to represent us – it will be SMEs representing SMEs.

I feel hugely encouraged by the immediate response and support for SMEalliance – it really feels as if a fuse has been lit and an immediate network of like minded people have joined forces. We need to build and build our numbers so our voice gets louder. And then we can collectively make sure influential people like Mark Carney  or politicians know exactly how we feel, what our problems are and what changes we want to see – straight from the horses mouth. Starting maybe with the statement from the Governor’s office:

No one is above the law.

If even the Governor of the Bank of England is agreed on this principle. maybe we could start dealing with the one thing that hinders it:

But most people can’t afford the law.

That’s a huge problem but let’s not run before we can walk. If we can be sure the authorities will support  “no one is above the law” that would already go a long way to helping SMEs. So that when we report misconduct, fraud, misrepresentation, sharp practice or other issues that damage SMEs to the regulators, the police, MPs – we could do so with the confidence the law will protect us.

Last thing – you don’t have to have a problem to join SMEalliance. Aside from trying to raise important issues at a political level and have a huge voice, it is a huge opportunity to network, share information or idea’s and cross reference facts that will also alert others to potential pitfalls. And for those who do have a problem, it will also hopefully provide a support network.  I saw all of this go into action straight away when everyone at the meeting adjourned to the pub and it was evident the knowledge and experience people were willing to share was phenomenal.

Please visit our website http://www.smealliance.org and if like us you think SMEs, which are the absolute backbone of the economy, should have a better deal and a bigger voice, please join us. Our next meeting is 6th November at the Winford Manor Hotel in Bristol.

 

 

 

 

SMEalliance v Parallel Universe.

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I was think this morning (actually I was dreaming it as well) about this bizarre situation we have of parallel universes. It’s a situation now so blatantly obvious between SMEs on the one hand and banks, regulators, authorities on the other, that we seem to talk an entirely different language and have an entirely different thought process. A very good example of this is the Lawrence Tomlinson report into RBS/GRG vs the Clifford Chance report. Clearly the two camps are not on the same planet and not writing about the same problem. Or, worse still, Clifford Chance looked at the problem and then interpreted their findings according to the laws of Klingon or the Disc World. Question – which camp is run by aliens?

I would say it’s not us, the SMEs (well I would say that) but I have good grounds for that assumption. We, the many SME owners and employees, have no option than to deal with very real, down to earth problems and situations. Given the many and varied ways banks have tricked, manipulated, defrauded, deceived (call it what you will) the SME sector, many of us, and I can say this as a fact, have problems making budgets stretch to the next day. The concept of what tie to wear to the next Mansion House dinner or what colour Merc to order next year, is totally immaterial to our lives.  We are very ‘grounded’ and we are determined to bring about change, so we don’t end up ‘under-grounded’ before our time.  And of course that is not a scenario that applies just to SMEs – the majority of people in this Country have been affected by the extreme austerity the so called ‘credit crunch’ caused.

So it’s been interesting to see some of the top people from the parallel universe, running around like headless chickens for the last few weeks because they were suddenly forced to face the fact that ordinary people count. I’m talking about the Scottish referendum of course. Even although the ‘No’ vote won in the end, it was a sharp wake up call to “all in it together” Dave and Ed & co, when the Scottish people made it blatantly clear they were sick of a Westminster dictatorship. And although I personally think it would have been a mistake to split the United Kingdom, I do think Alex Salmond and his team may have done everyone a big favour. They’ve made a point – if you want to stay in Government you’ve got to do what it says on the tin – or we’ll walk.

For a very long time now, what we’ve had between Government and people is “a failure to communicate.” And it’s become so out of hand most politicians fail to understand even the most basic problem i.e  we vote them into power based on promises made which will benefit the majority and then, when they’re in power,  they break almost every bloody promise in order to benefit the tiny minority living in the parallel universe which encompasses that tiny dot of Britain in central London to include Westminster and the City.

I don’t want to get involved in the pro’s and con’s of Scottish devolution – I’m not Scottish – but I was quite fascinated by the lengths our political parties went to to keep Scotland. Of course the proof of the pudding is in the eating and, in my humble opinion, what will follow now is a battle, the likes of which we haven’t seen for quite a few years, while Scotland insists Dave keeps his promises and the rest of the UK wonders on what grounds Scotland gets preferential treatment – when half of them didn’t want to be part of Britain in the first place? It is going to be very interesting.

Anyway my point is – Scotland has 5M+ voters and the thought of losing them caused many people from la La Land to become quite apoplectic. Suddenly they listened and suddenly they agreed to the need for change. I can’t help feeling this was more about economics than people but, whatever, it brought our aloof elite back to earth for a while. How long they will stay – who knows. But there’s a good chance they’ll be here en mass for the next 9 months.

It took the SNP years to build that momentum and some may feel it is entirely presumptuous to compare SMEalliace to the SNP. But you’d be wrong – every organisation looking for change via our democratic process is similar to the SNP. Our problem so far has been – only money has been having political influence – not people. SMEalliance may be at totally grass root level and we are absolutely a fledgling initiative – but we want change every bit as much as Scotland does – and we want to be listened to every bit as much as Scotland does. And I hope we will grow very quickly as an organisation – because we could potentially reflect the views of millions of people – and some of them Scottish. And no, we can’t vote to get out of Britain (well I suppose we could form a convoy and head for the Costa Del somewhere) but we could vote for the party that listens to us the most – which was always the basic idea behind SMEalliance – we want to raise our voices before more SMEs are brutally trashed.

And here’s a thought running up to the election – if the 4.9M SMEs in this Country were able to function efficiently and grow as the entrepreneurs who started them intended, instead of being continually crippled – and not just by banks – the impact we would have on the economy would be phenomenal. We would be a huge asset to the Country and we would shift the balance of power back from the parallel universe to the real world.

Now I know a lot of people won’t like that idea. But it’s called democracy and if we could identify the political party who would give it a shot – we could be a handy vote.

 

 

 

 

SMEalliance up and running

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It’s been a busy week and I still can’t believe that two weeks ago SMEalliance didn’t exist. It certainly does now! Obviously it’s still early days but here’s a brief update of where we are:

We have a company .

We have a domain name smealliance.org.

We have a logo (to be unveiled next week)

The website is being built and should be up and running by the end of next week.

We have a meeting confirmed for 25 people on 24th September at 1.00pm (the venue will be confirmed early next week but if it’s not Chancery Lane it will be within walking distance of Chancery Lane)

We have supporters who can’t make the meeting but are on board.

We have media interest.

Not bad progress for 12 days work.  But I am fully aware we are at the very beginning of something and what we want to achieve will not be easy.

I’ve been repeatedly asked over the last few days, the very obvious question, what will make SMEalliance different from any other organisation that supports SMEs. And I want to say straight away, we haven’t formed this group as a criticism against other organisations.

However, there are serious issues for all SMEs that clearly are not being dealt with or resolved. As these are issues that affect SME owners, shareholders, employees, it makes sense for us to try and help deal with them ourselves and alongside existing organisations. After all, who knows the problems we face better than us? And please note – SMEalliance is absolutely not just about banks – so we are not going into competition with Bully Banks or anyone else – in fact we have a meeting scheduled with Bully Banks and I hope we’ll have meetings with the FSB in the future.

As I said on Day 1 of this initiative – there are 4.9M SMEs in Britain and it is absolutely ridiculous that we are ignored by all the major political parties. They may say they don’t ignore us but the proof of the pudding is; no one is doing anything about the way banks continue to trash SMEs and steal their assets; no one is enforcing the conditions banks agreed to as part of the bailouts (i.e funding for SMEs); no one is looking at the abuse we suffer at the hands of the insolvency sector; no one is looking at the inequitable position we are in with the justice system (i.e first we get abused and then our abusers use shareholders money to make sure we can be abused again in the Courts); we are crippled with red tape and regulation while the major corporations SMEs struggle to compete with, are often not even paying UK taxes because they’re registered off shore; the various Ombudsman schemes are not set up to deal with SME problems; the regulators are not set up to deal with SMEs (e.g the FCA does not deal with individual issues but the FOS can only give limited compensation which doesn’t cater for SME losses); and so on and so forth.

The reason for SMEalliance is: we, the members (the few now and the many coming) are all very aware of how important SMEs are to society but also how individually vulnerable we are against the kind of unethical practise that blights the business community. Many of us started businesses with all the enthusiasm and dedication synonymous with entrepreneurship and with no idea how easy it would be for rogue elements of other sectors to see us as mere cannon fodder. We all employ (or employed) people and we know first hand the devastation caused when businesses fail because of immoral and sometimes fraudulent scenarios we have no control over. I think we’ve been collectively shocked that the protection we thought we had – regulators, law, Government – has, in many cases, proven to be totally ineffectual. Many of us have watched in horror as our businesses have been destroyed despite our every effort to save them. We’ve all tried individually to stop the kind of corruption and “wilful blindness” that makes SMEs such easy prey. Now we’re going to do it collectively. Who better than us to try and help remedy the problems facing our sector?

SMEalliance is a very simple concept. SME owners, shareholders, employees getting together to share idea’s and information that will help us all. And, most of all, having a collective voice that policy makers in Governments have to listen to. I’ll put that another way because a) “HAVE” to listen suggests we have a very aggressive agenda and b) as we all know, selective hearing or pretending to listen (nodding dog syndrome) is a speciality of some politicians. We want to get to the point where political parties genuinely WANT to listen to us and genuinely want to use our experiences to identify what needs to be changed or put in place for a more equitable platform for SMEs. It can only be a good thing for the economy to make the SME sector strong.

It’s a plan. It’s a very good plan. Now we just need to make it work! As I said, it’s early days but something about this does feel very logical.

That’s it for now. Anymore and someone will be buying me a soapbox! Will update again in the week. Please spread the word. #SMEalliance.