Seven months after Lawrence Tomlinson’s damning banking sector report was published, its fallout rumbles on.
But the all-action entrepreneur, just back from motor racing in Marseille when he meets BQ over a pie and pint, has much else to fill his mind besides his banking revelations. There’s the acceleration of his own race car badge Ginetta, which he races, designs, sells and, as he explains, “breaks so that I can spot things before the customers do”.
Then there are his 2,000 foot soldiers who can each contact him at any time. Every employee has a complimentary iPhone with a ‘contact Lawrence’ app.
While enabling the sharing of good news, it gives Lawrence eyes on the ground in any area of the business. And these could be in care homes, on airport runways or construction sites or under the bonnet of a championship winning machine.
“If there’s some shit going down I want to know so I can fix it,” he says. “I don’t need to insulate myself with layers and layers of management and all that rubbish.”
The formula seems to work. Tomlinson’s LNT Group – N standing for Neil – has a combined annual turnover of about £100m while his reported £500m+ fortune has him hovering around the 150 mark in the Times Rich List.
But he’s perhaps become better known in national newsprint over the past seven months for the Tomlinson Report, which made waves when it was published last November.
“At the time, I said to my family, if I publish this report there’s going to be all sorts of crap written about me, I’ll be crucified in the press and people will find all sorts of horrible stories, so what should I do? My eldest daughter said, ‘just crack on’ and that was that.”
Crack on he did and the result is the independent review currently being led by the Financial Conduct Authority into RBS’s treatment of business customers.
The report, written while Tomlinson served as adviser to business secretary Vince Cable, claimed RBS pushed businesses into default after moving them into its Global Restructuring Group (GRG). It also alleged that the 81% government-owned bank profited from their struggles as, by moving them into GRG, it could seemingly create more revenue through higher fees and margins.
As a result, the bank’s property division West Register could purchase their devalued assets.
Tomlinson says: “I just stumbled upon it. If I hadn’t been there it would still be going on now. I had no intention of what came out of it, the general story was, ‘not only can I not get access to finance but I’m having my existing loan pulled and I’ve been put in this horrendous part of the bank and they’ve done this, this and this to me’. That then snowballed into finding hundreds of businesses that had been through a similar pattern – so much so that it concerned me and I did my report. It suggested there was a system behind it.”
While the FCA’s findings won’t emerge until autumn at the earliest, the law firm Clifford Chance (CC) was enlisted by RBS to conduct its own investigation. It reported in April that it found “no evidence that RBS systematically set out to defraud its business customers”.
Tomlinson reacted by saying it was “unsurprising” CC did not find any clear evidence of fraud, something which he had never accused the bank of. “It’s important to note that Clifford Chance did not investigate or reach conclusions on areas such as the validity of valuations and treatment of businesses,” he said at the time.
The true impact of the report be seen when the FCA concludes its findings – but it may have already contributed to some actions being take which Tomlinson sees as positive. He points to the sale of West Register, ending the alleged conflict of interest created by the bank’s property division. He adds: “What I am also proud of is that when people go into GRG now they aren’t getting charged penal interest. I’m absolutely certain that would not have happened without me focusing on it. I’m sure it’s helped thousands of UK businesses.
“I think [RBS CEO] Ross McEwan should be really happy that I’ve highlighted this to him and the bank has been able to take action. If someone said to one of my businesses ‘you’re treating your customers abhorrently’, even if it wasn’t true but that was the perception, I would still thank them and say, ‘my God I really need to look at that and find out why.”
Looking forward, Tomlinson would like to see major reformation of RBS.
“Will RBS be around in 10 years? I hope not in the way it is now. I’d like to see it as three separate banks and the investment bank sold off.” he says.
Tomlinson’s report came during his year-long sojourn into government as entrepreneur in residence, which he was chosen for from over 100 other candidates. An eye-opener for him at the time was the amount of lobbying that takes place at Whitehall.
“These people who are very bright in the Treasury and in BIS get lobbied every day. There’s too much lobbying of government departments and ministers by people who have a vested interest in lobbying because they get paid to do it on behalf of their members.”
Particularly worrying, he says, was something of a disparity between the level of lobbying in support of banks and that with the best interests of SMEs in mind.
Generally, though, Tomlinson found his year at Westminster to be “hugely enjoyable”, as he sought to help ease access to finance for his fellow business leaders.
“In BIS and in government you haven’t got many businessmen or women. You’ve got quite a lot of career politicians that tend to become ministers and inside the civil service you have a whole mixture of people from various backgrounds. But generally there aren’t a lot of business men and women. So I spent a lot of time in the Treasury trying to help them understand how hard it is to get access to finance and what the reality is.”
Although his one year tenure in government ended in April, he continues to advise politicians today. But, given the sheer diversity of his business empire and his hands-on role within it, Cable and Co. no doubt face a real challenge in pinning him down for any length of time.
The sexy side of his enterprise is Ginetta, which makes up to 300 road and race cars a year in Leeds. It also runs racing championships and provides an affordable route into motorsport for drivers as young as 14.
But drivers of any age – including thrill-seeking business people – are joining the company’s racing driver’s club in increasing number.
“We sell them a car they can race on the road and then have a professional driver take them through our test to get a racing license. Take up’s been great so far, in the first year we’ve had about 15 or 16 join, with more expected.
“It costs £30,000 and you get to keep the car. Most people in the City would pay £30,000 for a watch and we always get asked what happens with the car. That’s the difference – people up north are saying ‘bloody hell that’s expensive’ and people in the City are thinking ‘that’s cheap, what’s the catch?’”
It’s almost 10 years since Tomlinson bought what was then a faded relic of a glorious racing past. Highlights in that time include “taking a cottage industry employing two people back to where it was in the 60s and 70s, employing lots of people creating world class products.”
Tomlinson’s victory in the GT2 class at Le Mans 2006 is another standout moment, as are the subsequent multiple British GT championship wins.
Tomlinson says: “The original founders of the company were engineers and they wanted to build a car that was affordable, fun to drive and they did it by using fairly standard engines and making the cars very light. We do exactly the same thing, except we added another element to it. So in the the 50s and 60s it was fairly acceptable that people would go to a race track and see multiple deaths. That’s completely unacceptable today obviously, so we go for lightweight, standard engines which are modified, so you have great fun, but we won’t compromise safety.
“When I bought Ginetta in 2005 it was always about a 10-year plan. To take a car company and develop a product for a world market is a seven to 10 year plan. You can’t go into this with short term ideas and hope you’re going to attract funding for it. You need a long term funding plan. No-one’s interested in funding a car development business that’s for sure, which is why it’s funded by myself.” Being a racing driver, a mechanical engineer and the owner of the car company gives Tomlinson and his firm a great advantage over its rivals, he says.
“At the minute I’m going back into the racing to do a lot of development work on cars. Sometimes you struggle to get feedback from drivers to engineers so we can shortcut this process, since I’m an engineer, a driver and the company owner who makes the decisions.”
While Ginetta’s Garforth factory employs around 40 people, the rest of Tomlinson’s 2,000+ workforce is spread across four additional divisions.
Three subsidiaries cover elderly care – operating, building and providing software for care homes. Alongside iPhones, employees also receive shares in the business after six months of service. “We try and run as a family business even though it has 2,000 employees and it’s growing all the time. People like to feel like they’re working for a person rather than a company.
For example, you don’t work for Virgin you work for Richard Branson,” he says, before quickly pointing out: “I’m not a Branson wannabe in any way, by the way.
“But that feeling you give to staff of working for someone rather than an organisation is so powerful and to try and keep that alive we have contact with our staff all the time.”
LNT runs 36 care homes across the UK and plans to build an additional six to eight
per year. Tomlinson’s involvement in the sector goes back to his teens when he wrote software to help run his parents’ care home company – a business he bought from them in 1988.
Perhaps the biggest change to the industry since then is the impact of technology. LNT’s subsidiary Ideal Care Homes has WiFi in every home, uses tablets to help residents reminisce and has virtual notice-boards which share information like daily menus and staff rotas. The company stops short of CCTV, however.
“I don’t agree with CCTV in homes. “We want to make it homely, so it’s not just a facility with care, it’s someone’s home. Would you really have CCTV in your own home? We only use technology which will enhance our residents’ lives.”
In terms of staffing, Tomlinson is happy to admit he has a small number of zero hours workers on his books. “Vince [Cable] has asked me about zero hours contracts. In the retail industry you’ve got loads of people on them and quite clearly that’s wrong. People need to know how much they’re working each week. But if you just want to work the odd Saturday then zero hours contracts are not the worst in world. Sometimes it suits someone to be able to work only when they want to. Politicians talking about getting rid of zero hours have to be careful not to throw the baby out with the bath water.”
As if a three-pronged care home business, racing cars and government advising
wasn’t enough to keep Tomlinson busy, he also oversees a chemicals business.
Among its successes is a product which has effectively brought an end to the problem of leaves on railway lines and a runway de-icer which, unlike previous products, is kinder to airplane carbon disk brakes.
There’s barely time to talk detail, though, with the gleaming Ginetta parked up outside The Fleece pub in Otley luring Tomlinson on to his next appointment.
A feast fit for a whippet
So slight is Lawrence Tomlinson that the Guardian once described him as whippet thin. It’s perhaps surprising, then, that the wiry entrepreneur immediately points to the meat pie option when our orders are taken. Surely a crisp salad plus a dose of protein is what fuels the driving elite these days? Then again, racing in the South of France – as Tomlinson was doing a mere 24 hours before our lunch meeting – must be hungry work.
We’re in The Fleece pub, a lamb’s fling from the centre of Otley and, to the delight of its owners, on the route of the Grand Départ.
Lawrence tucks into his impressively portioned beef pie – served with garden peas and fries – with relish. Its towering crust casts a shadow over my entirely healthier smoked trout salad and plate envy ensues.
But my choice doesn’t disappoint, with jersey royals bolstering the attack and lemon dressing providing a zesty antidote to the gloomy skies outside.
We both agree that the food, service and setting are excellent and, with ample parking and its position on Otley’s main strip, The Fleece makes an ideal spot for a business lunch.
The recently refurbished pub affords pretty views across the river Wharfe from inside or in its expansive beer garden. It is also well served for real ales from Wharfe Bank Brewery and the menu is entirely seasonal and filled with locally sourced quality produce.
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