Banking Reform

Alun Cairns Excerpts

Monday 4th February 2013 Commons Chamber

[Greg Clark]

I think it important for the responsibility exercised by remuneration committees in particular to have regard to the experience of ordinary working people up and down the country. I see no reason why the way in which bonuses are thought about in boardrooms in the City should be any different from the way in which they are thought about in any other industry.

[Alun Cairns (Vale of Glamorgan) (Con)]

I welcome the Minister’s statement, which confirmed the Government’s policy on ring-fencing the banks and its extension to electrification. Does the Minister agree that some of the products or derivatives of investment banks—particularly fixed-rate mortgages—can offer certainty and security to retail customers, and that we need an intelligent debate about the issue?

[Greg Clark]

My hon. Friend is right, but I think we have already had the intelligent debate. The Government asked the commission to look into that issue in particular and to make recommendations, and the commission expressed the interim view that it was reasonable—as my hon. Friend says—for simple derivatives to be provided from within a ring-fenced bank. However, it wants to reflect further on whether any of its inquiries into the culture of banking may have implications for that. We will await its conclusions.