Lord Myners
Main Page: Lord Myners (Crossbench - Life peer)
Lord Myners
My Lords, I welcome the Minister’s repeat of the response to the Urgent Question in the other place; it is good that we have this information before the Mansion House speech tonight. I also welcome the appointment of Sir John Vickers, a man ideally suited to chair this commission.
The speech by the right honourable gentleman the Chancellor of the Exchequer is charged with political overtones. It seeks to rewrite history. The Chancellor must rise to the standards and callings of his office and focus more on the future and the strategic issues and challenges rather than making cheap political points. This ill becomes a holder of one of the great offices of state. He must remember that, now the election is over, he has a duty to govern and perform an effective ministerial role and no longer act as a purely political spokesman. We want leadership from this Chancellor of the Exchequer, not soundbites.
A clear error in the Statement is a reference to the support that the taxpayers provided to the banking system, but no reference at all to the fact that the taxpayers now have a gain on the support that they showed to the banking system in excess of £10 billion, a considerable amount of money that could, for instance, be used to capitalise a new bank to support lending to SMEs.
The devil as always is in the detail. One of the problems with the commission is that its report will be too late. As my noble friend Lord Eatwell said, the Seoul meeting of the G20 will be the critical decision-maker on the structure of banking globally, yet this report will come well after Seoul. Surely it is right that there should be an interim report from Sir John Vickers before Seoul, so that we can test the Government’s position in Seoul against the recommendations coming forward from Sir John Vickers and his group.
I have a number of questions, which I raise with some fear that they may not be answered. We are still waiting for answers from the noble Lord, Lord Henley, to questions asked during the Queen’s Speech debate and an answer from the noble Lord, Lord Sassoon, in relation to the debate on competitiveness. It is unfortunate to see that the Treasury is already lagging in terms of response to questions.
Will the Minister explain where macro-prudential regulation morphs into micro-prudential oversight? In the first sentence the Minister says that macro-prudential regulation should never have been taken away from the Bank of England, but in the second sentence he says that the Government are still developing their thinking on macro-prudential supervision.
Lord De Mauley
My Lords, perhaps I may remind noble Lords that, although brief comments and questions from all quarters of the House are allowed, Statements should not be made the occasion for an immediate debate.
Lord Myners
I am asking questions, as I have made clear. I am just into the third minute and I beg the House’s indulgence to ask one or two other questions.
Lord Myners
One more question. I believe that the Minister should make it clear whether this proposed commission is likely to lead to the breaking up of the British banking system. If so, he should make a clear statement to that effect. Not to do so would be to run the risk of a false market in the securities of our major banks.
Lord Sassoon
I thank the noble Lord, Lord Myners, although I think that he may have forgotten that he is no longer on the Front Bench. He raises a lot of points. I find it remarkable that, on a day when the Chancellor of the Exchequer has made an historic Statement about restoring the role of the Bank of England, the noble Lord seeks to denigrate my right honourable friend’s announcement. This is a remarkable and important Statement, putting the Bank of England back to where it should have been, from where it was removed in 1997. Let us remember that.
Among other things, the noble Lord says that the report of the banking commission will be too late. It will not be too late, but, of course, this work should have started months ago. The previous Government would brook no discussion of the structure of banking, notwithstanding some very clear steers, not least from the report of the Select Committee on Economic Affairs of your Lordships’ House, Banking Supervision and Regulation. I think that the noble Lord, Lord Eatwell, was even a member of the committee and the sub-committee that worked on the report. The report, dated 2 June 2009, states that,
“the tripartite authorities in the United Kingdom … failed to maintain financial stability and were found wanting in dealing with the crisis”.
Among other things, it goes on to state:
“The Committee recommends that the Government”—
that is, the Government in June 2009—
“should as a matter of priority revisit the tripartite supervisory system in the United Kingdom”.
So it ill behoves the former Minister, the noble Lord, Lord Myners, to say that things are too late.
As to questions of reporting, it will be up to the banking commission to decide what it will do by way of interim reports.