Independent Commission on Banking

Lord Davies of Oldham Excerpts

Monday 12th September 2011 Lords Chamber

[Lord Davies of Oldham]

My Lords, I am grateful to the Minister for repeating the Statement made in another place earlier this afternoon. Of course, we are grateful to all who contributed to the Vickers report, particularly the chairman. After all, this is probably the most important report to come before this Government during their time in office. Therefore, it is important that we recognise the points that the Minister made about the time necessary for full consideration of the important issues involved. However, if we have a clear anxiety about the Government’s response—I recognise that it is an initial response at this stage—it concerns whether it has the urgency which the nation demands. The report proposes significant reforms to an industry that contributed substantially to a huge rise in job losses and caused great uncertainty among our fellow citizens. Hundreds of thousands are seeing their living standards decline. At the root of this is the catastrophe in the financial sector that we have lived through.

Of course, the report is concerned with the UK position, UK banks and the United Kingdom Government’s response and contribution to finding a solution. However, I hope that the Minister will give greater reassurance as regards the urgency of taking the earliest possible action. I am not clear why the Government have not indicated that they look upon the financial legislation before both Houses as a vehicle for at least establishing a basic framework of the response. That would at least translate fine words into early and clear action. That is the very least that we can ask of the Government in response to a situation which has been so catastrophic for our nation.

My second point, in somewhat lower key, concerns the international dimension. Of course, we are concerned about United Kingdom legislation but it is important that the Government, particularly the Chancellor, should recognise that the solution to the financial problems which face banking in this country has to be consonant with the solutions which are put forward and engaged in by all the major economies in the world. That is why it is so important that the Chancellor should recognise the international role which he has to play in respect of the reform of the world’s financial provisions, particularly regulation.

Thirdly, I hope that the Minister will not dwell too much on the past.

[Noble Lords]

Oh!

[Lord Davies of Oldham]

We all recognise that the catastrophe which occurred in 2008 was enormously detrimental to the welfare of this country. However, I hope the noble Lord will recognise that it occurred not just in this country but constituted an international financial failure. Regulation failed in the United States of America and other countries. That international dimension is crucial to finding a solution. If the Minister merely looks on this as an opportunity for point scoring and berating the previous Government, that would ill fit the present situation and the problems that we all face, to say nothing of the fact that he would have to quote chapter and verse those senior Conservative politicians who, during the build up to the events of 2007-08, warned of the impending difficulties and demanded tighter and more effective regulation of the City. If evidence of that kind emerges at any stage, I for one would be glad to see it. However, I would be amazed if it existed.

Today’s Statement provides an opportunity to give a brief response to a fundamentally important problem. I am keeping my remarks brief confident in the fact that we shall have another opportunity to debate this matter on Thursday of this week. I hope the Government and the Minister appreciate that we shall have a greater opportunity to deploy our arguments in that debate after we have fully examined the Vickers report and the Government’s initial response to it. I look forward to that debate, as I am sure does the Minister.