Independent Banking Commission Report

Margot James Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

We do want to see more mutuals created—we have explicitly said that in relation to Northern Rock, while not ruling out other potential options for Northern Rock. We have also taken action to strengthen credit unions, which are another part of the piece. It will be good to see mutuals growing, and the proposals in the report, particularly those on competition and the switching of current accounts, will help the mutual sector.

[Margot James (Stourbridge) (Con)]

I welcome the Chancellor’s considered response to the Vickers report. Will he comment on the implications of the proposed reforms for his strategy of rebalancing the UK economy towards manufacturing and regions outside London and the south-east?

[Mr Osborne]

The proposals will help because they will mean that these universal banks will have retail banking arms, in a ring fence, that are very focused on getting lending going to the economy outside the centre of London. We may think of it like this: the boss of the Royal Bank of Scotland a couple of years ago would have had someone running NatWest—running a ring-fenced subsidiary—who would have been totally focused on trying to get NatWest lending as a successful retail bank, rather than worrying about whether they could take over a Dutch investment bank. The ring fence will mean that parts of a universal bank will be extremely focused on getting support to businesses, in the black country and elsewhere.