Financial Services: Competition

Lord Cashman Excerpts

Thursday 22nd October 2015 Lords Chamber

[Lord Ashton of Hyde]

My Lords, the switching service which the Government introduced has enabled 2.1 million customers to switch. We agree that that should be increased, but the noble Lord omitted to mention that the CMA report out this morning stated that the switching service is functioning reasonably well. Of course, we understand that switching accounts can only improve competition. We fully support the CMA’s provisional report and await its final report next spring, when we hope that it will have some sensible and useful recommendations.

[Lord Cashman (Lab)]

My Lords, will the Minister ask the department to investigate the current barriers placed in the way of new charities trying to open bank accounts with the major banks? They face difficulties and refusals based primarily on money-laundering directives. This is inhibiting the charitable sector, particularly the small charities.

[Lord Ashton of Hyde]

I agree that anything that inhibits charities’ proper functioning is to be deprecated. On the other hand, we have to ensure that money-laundering regulations are applied; they are very important. Of course, money laundering hurts the beneficiaries of charities as well and must be taken seriously, but we are trying to make a more proportionate regulatory response, and the FCA and the PRA are working on that at the moment.