Financial Services

John McDonnell Excerpts

Wednesday 6th February 2013 Commons Chamber

[Greg Clark]

There are a number of reasons why I think it is achievable. The first is the contribution that regulation can make. As Members have said, it is important to have a more exacting set of regulatory standards that are intolerant of the kinds of abuses that have taken place. Secondly, it is in the commercial and strategic interests of banks to restore the reputation that they used to have for trust. Financial services depend on trust. If people do not trust the banks, they will not do business with them. I think the penny has dropped across the City, and most of the new generation of chief executives understand the connection between their future profitability and performance, and the need to provide decent services to their customers.

The third reason is a matter being investigated by the Treasury Committee and concerns a failure or subversion of the culture of banking. Banking was always associated with high standards of probity; it was a vocation for people who were thought to be of a rather conservative disposition and inclined not to take excessive risks. That was subverted by exposure to some of the practices of recent years, and because that was inadequately regulated it distorted what should be the right culture in the industry. We need to make changes to all three of those areas, and that is precisely what we have done and what we have embarked on for the rest of the Parliament.

[John McDonnell (Hayes and Harlington) (Lab)]

Following the point made by the hon. Member for Cities of London and Westminster (Mark Field), let me urge the Minister that there can be no drawing a line in the sand and no amnesty given until corruption is rooted out. My constituents now look on the City of London as a fetid swamp of corruption. They see only people forgoing bonuses but no one being imprisoned for the swindles that have taken place. There can be no amnesties at all. Will there be any investigation into allegations—I have raised this point previously—of attempts to manipulate the auctions associated with the quantitative easing exercise undertaken by the previous and current Governments?

[Greg Clark]

I am not aware of those allegations but I will look into them. Any criminal activity in any part of the financial services industry ought to be prosecuted and pursued with the same degree of vigour as in any other walk of life. The hon. Gentleman overstates the case in his reflection of the City. Hundreds of thousands of people work in the City and do a decent job working hard for their clients and businesses up and down the country. They are as outraged as any of us in this House about the damage done to the City’s reputation. The future for us and for our interests is to see that reputation restored and root out the corrupt individuals—corrupt is the word in this case—who have done disproportionate damage to the reputation of a set of institutions that should be one of the prides of this country.