Banking Commission Report

Debate between Brandon Lewis and George Osborne

Monday 19th December 2011 Commons Chamber

[Mr Osborne]

I am happy to consider my hon. Friend’s views, but we are equally clear that the depositor preference proposals in the Vickers report are the ones that we support in principle; their implementation in practice will be addressed in the White Paper.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my right hon. Friend agree that the ring-fencing outlined in the proposals will not only protect the taxpayer from casino banking but have the longer-term benefit of encouraging more competition by creating a fairer and more even playing field for small banks, which would be to the benefit of all?

[Mr Osborne]

We want to see more competition, which is why we proceeded with the sale of Northern Rock and why we are pleased to see Lloyds seeking to sell its branches to the Co-operative bank. It is also why we want to see other challenger banks out there. We are also considering a de minimis exemption for some of the smallest banks; we will report back on that when we publish the White Paper.

Autumn Statement

Debate between Brandon Lewis and George Osborne

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

As I said in my statement, I believe, particularly in a debt crisis, that monetary policy is the most powerful tool for supporting demand. The Bank of England has undertaken the quantitative easing programme, which the previous Government thought was the right policy as they authorised the Monetary Policy Committee’s request. We can also do a lot to try to improve the credit conditions for small businesses, which do a huge amount to employ people in our country. That is why we have taken action on credit easing. The right hon. Gentleman has to balance the cost that a 1% rise in interest rates would have for mortgage bills, debt interest bills, family business loans and the like, which I set out, with the need for the additional billions of pounds of borrowing that he is proposing on top of the borrowing that we are already doing and what that might do to the credibility of this country in international markets.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my right hon. Friend agree that the welcome opportunity for private pension funds to invest in infrastructure will also give a good return for those pension funds by unlocking the growth that can come from such infrastructure, particularly in rural areas such as East Anglia?

[Mr Osborne]

My hon. Friend is absolutely right. That is why we have made a particular commitment to two roads in East Anglia: the A11 and the A14. The A14 is a real challenge, as he knows, because it is a vital artery for the entire national economy. We are announcing particular commitments today to improve the A14. We want to work with local councils and local communities to make even greater lasting improvements to the A14 in the future.

Banking

Debate between Brandon Lewis and George Osborne

Wednesday 9th February 2011 Commons Chamber

[Mr Osborne]

It was the last Labour Government who were responsible for the economic mess that we got ourselves into, and the sooner Labour Members face up to that, the better. One example of that was the arrangements put in place regarding RBS, to which the hon. Gentleman referred. That is the contract that we inherited from Labour; this is what the then Ministers who now sit on the shadow Front Bench signed up to: they explicitly told RBS that from 2010 it should pay in line with the market rate. We have now got it to be at the back of the market, not the front.

[Brandon Lewis (Great Yarmouth) (Con)]

Like other Members, I welcome the move on lending to small businesses. The Federation of Small Businesses, the chambers of commerce and independent businesses have been arguing for some time that good businesses that are viable but have cash-flow problems have been struggling as a result of the policy of the banks under the previous Government. Given that this new move will allow those businesses to survive, and indeed grow, to the benefit of the economy, does the Chancellor agree that it is somewhat surprising, if not disappointing, that the shadow Chancellor and Labour Members have not welcomed it?

[Mr Osborne]

It is surprising. I noticed that in the shadow Chancellor’s rather extraordinary response there was no mention of lending. Indeed, I am not even sure what the Labour party’s plan is to get the banks to lend more and whether Labour Members welcome this move or not. I know for a fact that the previous Labour Government tried to negotiate a cross-bank agreement on gross lending, and failed. One would have thought, therefore, that they would welcome this, but they have not done so. My hon. Friend makes the good point that the key is to get lending to small businesses going, which is where the market failure has been over the past couple of years. That is absolutely crucial to our economic recovery.