LIBOR (FSA Investigation)

Debate between George Osborne and Viscount Thurso

Monday 2nd July 2012 Commons Chamber

[Mr Osborne]

It is for the House of Commons and the House of Lords to pass a motion, so ultimately it is a matter for the House.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

At the heart of this matter is a culture that has seen bankers go from trusted advisers to salesmen and clients go from valued clients to marks. Given that culture, is it not right that the Committee be asked to interview the Vickers commission again to see whether, in its view, ring-fencing is adequate following these events?

[Mr Osborne]

It would be entirely up to the Committee to call whomever it would want to call, and it might well want to speak to John Vickers, who has enormous expertise in this area.

LIBOR (FSA Investigation)

Debate between George Osborne and Viscount Thurso

Thursday 28th June 2012 Commons Chamber

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

This ruling surely confirms that the financial markets, as many of us suspected, have been neither free nor fair, but rather a sewer of systemically amoral dishonesty. Is not the case for separation of retail banking from merchant banking now so overwhelming as to be unanswerable?

[Mr Osborne]

I agree with my hon. Friend that we should separate retail banking from investment banking, but the best way to do that is through the ring-fence as proposed by John Vickers. We asked him and his distinguished commission to look at the structure of banks, and explicitly to consider the option that some had proposed of completely separating retail and investment banking. The commission considered and rejected that option, and instead proposed an approach that it thought would be stronger for financial stability, and particularly for the stability of retail banking. That is the ring-fence approach, for which we will now legislate.

Oral Answers to Questions

Debate between George Osborne and Viscount Thurso

Tuesday 6th March 2012 Commons Chamber

[Mr Osborne]

I completely understand the concern about excessive and very high interest charges, which have been a problem for many years. I think it is better to tackle the specific abuses. The Government are conducting a review of the cost of credit to consumers, but by tackling very specific abuses such as the roll-over of loans and the use of continuous authority, we think we are getting to the really hard cases and abuses that we want to see ended. I have to say—this was certainly the view of the previous Government, too—that although it could be worth looking at, simply introducing a cap might have the effect of pushing a lot of people into a completely unregulated black economy. I am not sure that any of us would want to see that.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

I remind the Chancellor of the excellent suggestions in the Treasury Committee’s report on the objectives of the successor body to the FSA, as they would certainly help consumers. Will he take the opportunity provided by the current legislation to give effect to those recommendations?

[Mr Osborne]

As I have set out before, we have listened carefully to the Treasury Committee and made all sorts of amendments to the Bill to take account of its recommendations, including changing the FCA’s remit to include competition. The Joint Committee chaired by my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) also proposed similar recommendations. We have listened to Parliament; thanks to those suggestions, we have made changes that we think will improve the Bill; and the Bill is now before the House and soon to be debated.

Oral Answers to Questions

Debate between George Osborne and Viscount Thurso

Tuesday 16th November 2010 Commons Chamber

[Mr Osborne]

One does wonder where the hon. Gentleman has been for the past couple of years. We are picking up the pieces of the biggest banking crash of our lifetimes, caused by the poor regulation of the previous Government. Since coming to office, we have announced major changes in regulation, putting the Bank of England in charge—which we still do not know whether the Opposition support—and a permanent bank levy, which was opposed by every single Labour Member during the general election. We are determined to sort out the problems left to us by the previous Government.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

The enterprise finance guarantee scheme was specifically designed to help small businesses to get bank finance. It has not worked, and many companies feel that it has not assisted them. What is my right hon. Friend doing to ensure that the scheme plays a full part in helping companies to get finance?

[Mr Osborne]

The first thing that I would say to my hon. Friend is that, of all the schemes that we inherited, this was the one that we thought had the most chance of improvement and was worth investing in. The other schemes had almost no take-up, but this one did. We were able to provide some additional money for it in the Budget, in the form of £200 million to support additional lending. We are also introducing changes to the way the schemes work, so that there will be a limit of 20 business days that all major lenders taking part in the enterprise finance guarantee scheme will have to comply with, so that people are not left on the hook waiting for an answer.