My latest piece on Huffington Post – Also available at http://www.huffingtonpost.co.uk/ian-middleton/uk-banking_b_6232648.html

I just watched a documentary revealing some of the outrageous behaviour from UK banks in their dealings with small and medium businesses.

It’s a cliche I usually try to avoid, but this really does beggar belief, especially from two of the banks the tax payer bailed out to the tune of billions of pounds of our money!

RBS, who are still currently 81% owned by the British taxpayer, and have oozed out from scandal after scandal over the past few years, have now been accused of systematically manoeuvring businesses into collapse to reduce their loan books and make a few quid on the side.

They even allegedly set out on a personal vendetta against Lawrence Tomlinson – The government’s ‘entrepreneur in residence’ – forcing him to close his RBS accounts and other facilities, he says, because he had the temerity to criticise them in an official report.

Lloyds Bank, also substantially owned by you and me, and equally mired in the slurry pit of libor rigging and other misdemeanours, were found to be involved in similar unsavoury activities with their own business borrowers.
It seems people who borrow from Lloyds, after being promised a personal relationship with the bank, have their loans and overdrafts quietly flogged off to an asset management/investment company with the reputation for being about as supportive to small businesses as a toilet paper hammock in a hurricane.

The bank’s representative, being interviewed for the programme, visibly dodged questions and weaved around responsibility for this breach of good faith with his customers, citing the small print in their loan agreements like a dodgy used car salesman explaining his way out of a warranty claim.

The programme was also notably seeded with cutaways containing well versed gobbets of personal opprobrium from our finger wagging Secretary of State for Business, Innovation and Skills – Vince Cable.

Now I’ve been in awe of this man for many years. Not in terms of respect for his work, but more in quiet admiration for how he has managed to stay in a post that he is so singly unsuited to for so long.

From the early days of being caught on tape plotting his dastardly revenge on Rupert Murdoch, through to the incompetent and catastrophic underselling of Royal Mail to city investors based on his quaint belief in the ‘gentlemen’s agreement’, this man has shown that he is about as qualified to be a Minister of State as he is to be an international gymnast.

I once had a great deal of respect for Dr Vince. I remember he was even touted before the last election as being a candidate for Chancellor of the Exchequer, in the improbable event of the LibDems winning outright. Yet since he took on his government position he’s demonstrated his complete lack of influence and grasp in almost every issue he’s been involved with.

He has, throughout his tenure, made scary noises about what he’d do to the banks if they didn’t straighten up and fly right. Yet whenever they are found up to the armpits in the cookie jar, he fades quietly into the scenery like a withering wallflower, only to appear some time after the fact, sliding his glasses down his nose, staring myopically at the camera trying to look like he knows what he’s supposed to be talking about.

Each time he promises to get tough next time, like the pub orator boasting about what he’ll do to anyone who crosses him, just as long as he never has to follow up his words with actions. And by the same token he does very little, if anything, to back up his chest puffing and table thumping.

I’m sure on a personal level he’s a lovely chap. He looks, after all, like everyone’s favourite cuddly uncle. But in terms of his day job, he has all the business acumen of a used teabag, the bark of a housefly, and the bite of a tortoise with gingivitis. In the face of an upcoming election, he really should be considering his retirement options.

The only reason I can think of that he is still in post now is because these qualities are exactly what his Conservative masters want in a minister for business. Someone who’ll make all the right noises, but ultimately stay out of their way and let them get on with filling their boots and those of their big corporate chums.

While people like this are in the positions they are, it’s little wonder that we’ve seen no genuine bank reform since the crash. No prosecutions of bankers, who to any fair-minded person have been guilty of, at the very least, dishonesty and in all probability of fraud and deception, if not plain old daylight robbery.

Until we have a government who seriously wants to take these guys on, we’ll be living in an economic groundhog day, enjoying the odd bits of prosperity, in between stumping up yet more of our own cash to prop up the lavish lifestyles of city wide boys.

In the meantime I guess small businesses will need to think of alternative sources of funding for their next venture. People who are more honest and reliable than most of the banks. The Triads or the Mafia perhaps. I hear they have some very tempting offers you can’t refuse.