Financial Services (Banking Reform) Bill

Guy Opperman Excerpts

Tuesday 9th July 2013 Commons Chamber

[Guy Opperman (Hexham) (Con)]

After the global banking crash, my constituents in Northumberland wanted to see better banking, higher standards, fewer scandals, greater competition and a greater degree of choice and service. In the past three years, this Government have been on a slow but continual journey to reinvigorate British banking and clear up the mess that we inherited.

I believe that over the next couple of years smaller regional banks will spring up throughout this great country, and I want briefly to address the House on that matter. Paragraph 49 of the banking commission’s main summary gives an excellent summation of its views on competition in retail banking. I refer anybody interested in this to the grave and weighty paragraphs 313 to 343 of the larger volume, where they will see, in particular, the evidence of Anthony Thomson, the co-founder of Metro Bank, with whom I have worked at great length over the past two years to try to reinvigorate the regional banking market.

That culminated in a series of efforts that have been made with the various regulatory authorities, starting with meetings that my hon. Friend the Member for Chichester (Mr Tyrie) and I had in February 2012 with Mr Hector Sants, the then chief executive of the Financial Services Authority. Mr Sants followed that up by writing on 12 March 2012:

“We are conscious of the balance to be struck between ensuring high standards at the gateway, and the importance of allowing innovation and appropriate levels of access for new firms…there has been public debate about the potential advantages of new entrants in the area of small, regional banks focused on servicing the SME sector. In such cases we will be proportionate in our approach and would invite all firms with a viable business model and appropriate levels of resources to a pre-application meeting to help guide them through the application process”.

Those were wise words and a significant step by the then chief exec of the FSA.

Then came the Bill that became the Financial Services Act 2012, which, I am pleased to say, passed its Second Reading in this House on 23 April 2012. To my surprise, the Labour party voted against clause 5, which specifically emphasised

“the ease with which new entrants can enter the market, and…how far competition is encouraging innovation.”

Be that as it may, the banking commission and other parties hugely improved the approach to regional banking. I support the efforts of everyone involved and echo the words of the Minister and the shadow Minister.

Following a huge amount of effort outside this House to encourage regional banking, Mr Thomson and I held a conference in Gateshead on 7 June that was attended by 142 delegates, including the Minister. More important, however—this is of key relevance to the banking commission’s findings—Sam Woods, the director of the domestic UK banks division at the Prudential Regulation Authority, and Victoria Raffe, the director of authorisations at the Financial Conduct Authority, were also in attendance on that day. Those two people are in effect the gatekeepers of regional banking and of the authorisations and regulation that lie ahead. They were welcome and made the case that regional banks are the way ahead.

I for one expect at least three or four banks to spring up in the north-east over the next 12 to 18 months, ranging from asset-backed lenders such as Cambridge & Counties bank—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I know that the hon. Gentleman is going to draw his speech into the Third Reading, because this is the Third Reading debate. The two must come together and it would be helpful if that happened sooner rather than later.

[Guy Opperman]

I will totally draw it into Third Reading, Mr Deputy Speaker. Those particular persons are very much affected and are working hand in glove with the Bill, which I support wholeheartedly.