Banking Commission Report

Edward Leigh Excerpts

Monday 19th December 2011 Commons Chamber

[Mr Osborne]

I do not think that it automatically follows that if we ring-fence the banks, we double the number of bankers. It is our intention, yes, to have a successful financial services industry, which is very important in Derbyshire, Cheshire, where my constituency is, the west midlands and Scotland, as well as in the City of London.

However, we do not want our entire economy to be in hock to the City of London; that is what we are seeking to avoid. We do not want to put all our bets on the City of London. That is what happened over the last 13 years, and it went disastrously wrong. The Government are determined to build up other sectors of the economy, including manufacturing and small businesses. The very fact that later today we are debating the Government’s apprenticeship programme shows our commitment as a Government to building up those other industries.

[Mr Edward Leigh (Gainsborough) (Con)]

After these reforms, will our banks be more or less regulated than their international competitors?

[Mr Osborne]

In certain respects, they will be more regulated compared with some other regimes. Obviously, the ring-fencing requirement that we are introducing is not present in every other financial centre. However, it is an appropriate course of action for the UK, given the size of our banking system relative to our GDP—it is 500% of our GDP; the United States banking system is only 100% of its GDP. As I said, there is now quite a lot of international interest in what we are doing, so we may find that other financial centres follow our lead.