Bradford & Bingley plc

Debate between Cathy Jamieson and Gregory Campbell

Wednesday 27th November 2013 Westminster Hall

[Cathy Jamieson]

I said at the beginning that I was sure that hon. Members would be disappointed that I would not be able to describe the day-to-day dealings of the previous Government. I am looking at the case on the basis of the information currently available.

The role of the European Commission was also mentioned. The Competition Commissioner has said:

“The Bradford & Bingley decision illustrates once again the positive contribution of EU state aid policy to ensuring orderly and effective solutions to tackle the financial crisis. The UK authorities’ market-oriented solution has avoided any disproportionate distortions of competition while enabling the preservation of the viable parts of the business.”

At the time, people seemed to be of the belief that the correct decision was made. It was not easy, but it was taken in good faith and because people thought that it was the right thing to do.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I appreciate the hon. Lady’s position—she was not a Member of Parliament at the time. However, given the context five years ago, which she is outlining in some detail, and the problems with the Co-op bank now, will she commit to a fully independent investigation into how and why it came about, and put in place steps to ensure that it never happens again?

[Cathy Jamieson]

I want to come on to some of the things we can do to continue to ensure that the things that happened in the past and recently do not happen again. We need to restore confidence in the banking world for customers, consumers and the wider economy. It has given me no pleasure to see yet more allegations and accusations about the practices in RBS in the past few weeks. Various inquiries are looking into those practices.

As hon. Members are aware, I am a Labour and Co-operative MP, and I have had a long involvement in the co-operative movement. It gives me no pleasure to see the situation that the Co-operative bank is in. I am sure that the inquiries will give us further clues about what we need to do to ensure that such things are not repeated in the future. I understand that what I am saying will not be much of a consolation to those who lost their jobs during the Bradford & Bingley situation, or to the shareholders who lost their money. I understand that the hon. Member for Shipley, who has worked hard as a constituency MP, continues to raise these issues to ensure that his constituents get answers.

The Bradford & Bingley shareholder action group, which speaks on behalf of the former shareholders, has run a lengthy campaign. We must ensure that no one else goes through what the people who lost their jobs and those who lost out in the crisis went through. That is why it is important that we work harder to reform the banking system, to ensure that such situations never happen again, and, as we discussed many times in Committee on financial services Bills, to future-proof against anything that could happen in the future. That is why I am making these points.

I am somewhat surprised that the Government have not given their full support to many of the recommendations of the cross-party Parliamentary Commission on Banking Standards and the Vickers Independent Commission on Banking, which the Government set up. The Financial Services (Banking Reform) Bill was a pretty thin volume in Committee, although it increased exponentially in size thereafter. Labour Members tabled various amendments during the passage of the Bill to ensure more protection for taxpayers and to rebuild consumer choice, financial inclusion and a diverse market. Crucially, we aimed to reform banking standards and the high-risk culture, while boosting the economy. It was disappointing that the Government either watered down or ignored the recommendations of the commissions and voted against most of our amendments. However, there was one victory in the other place yesterday.

I note that in the past couple of days we have heard that the Chancellor has now written to the Bank of England to review the Financial Policy Committee’s powers on leverage ratios. Although it is good news that the Chancellor has belatedly seen the importance of that issue, now that the Bill is in its final stages in the other place, it is a shame that it has taken him so long to do so.

I hope for some leadership from the Minister this morning—I know that he has a thorough understanding of the banking sector. I hope that we will see more of a change of heart from the Chancellor on wider banking reform, so that we can ensure that a similar crisis can never happen again. The Opposition will continue to press for that.

I will conclude on the point with which I started. The hon. Members for Shipley and for Calder Valley talked about a duty of care, which is important for everyone in every sector of the financial services markets. Whether people are in banking, insurance or other institutions, they must realise that they have a responsibility to the customers whose money they look after. I hope that the Government will support the call for a fiduciary duty of care that we have made on many occasions. Will the Minister comment on that, as well as answering the questions that other hon. Members have put to him?