‘Many things must be done… but nothing must be done for the first time.’ That quote, neatly encapsulating Whitehall inertia in the face of an unanswerable case for reform, comes from the peerless BBC TV series Yes Minister.
Like the programme, those words remain ageless. And they sprang to mind again in parliament last week when I attended the launch of a report calling for the establishment of a financial services tribunal to provide redress for SMEs ill-treated by their banks.
SMEs are the motor of the economy, yet lending has slumped amid what is a full-blown crisis of trust between business people and their banks. The financial crisis may have begun a decade ago but the wounds are fresh. Think of shaming episodes such as that involving Royal Bank of Scotland’s global restructuring group, which charged exorbitant fees to clients it was supposed to be helping; and the HBOS Reading fraud, one of Britain’s worst-ever banking scandals, for which six people were last year jailed for a total of 47 years.
Yet even now the powers of redress available to SMEs are woefully inadequate. Access to the Financial Ombudsman Service is limited to micro-enterprises and the courts are prohibitively expensive for all but those who are prepared to risk losing their shirts in combat with the banking behemoths.
So why are we still talking about this? First, there is the seeming requirement for primary legislation. But as the reform’s principal author, barrister Richard Samuel, points out, this a red herring. The new court can be set up under the existing courts and tribunals legislation or piloted under the Arbitration Act.
Second, there is the ongoing review of ADR by ‘UK Finance’ – the euphemised moniker under which the unloved British Bankers’ Association (as was) continues to lobby. Expect the bankers to recommend something far more congenial to their immediate bottom lines.
Yet there is really no excuse for the tail continuing to wag the dog here. The new court has cross-party backing and ministers should stop procrastinating and get on with it.