Regulatory and Banking Reform

Harriett Baldwin Excerpts

Thursday 16th June 2011 Commons Chamber

[Mr Hoban]

My statement today has demonstrated the action that we have taken over the past year to create a more stable and sustainable banking system. That should give comfort to my hon. Friend’s constituents in respect of the safety of their savings. Savers and depositors should be mindful of the limits on deposits imposed through the financial services compensation scheme, but the range of interventions that we are making, through this statement and further reforms, will ensure that we have a safer, more sustainable banking sector in the future—one that does not impose a burden on the taxpayer, but makes sure that it continues to meet the needs of businesses and households across this country.

[Harriett Baldwin (West Worcestershire) (Con)]

Does the Financial Secretary share my astonishment at the selective recollection of historical facts by Opposition Members? The run on Northern Rock started well over a year before the global financial crisis, and it was the first run on a bank in this country for more than 100 years. In rebuilding the stability of the financial system, will the Financial Secretary repeat for my constituents the reassurance that their deposits up to £85,000 are now effectively guaranteed by the Financial Services Compensation Scheme?

[Mr Hoban]

My hon. Friend makes two important points. The first is to recognise the role played by the Financial Services Compensation Scheme in protecting depositors up to that £85,000 limit. The other point is that there is collective amnesia among the Opposition about their role in the financial crisis. Yes, Northern Rock took place before the global financial crisis—and they were the champions of light-touch financial regulation and introduced the tripartite system of regulatory reform that was shown to fail during the crisis. The Opposition need to recognise their responsibility; until they do so, it will not be possible for them to move on.