Financial Services

Mark Field Excerpts

Wednesday 6th February 2013 Commons Chamber

[Greg Clark]

I very much agree with the hon. Gentleman that we should have more local, business-focused banks in this country. I hope that we can recover the personal knowledge, service and understanding of the needs of business that branches used to have in abundance. RBS is not nationalised, so we cannot direct it in the way that he suggests. However, the reforms that we are making, particularly in the Financial Services (Banking Reform) Bill, emphasise the importance of increasing competition and of having new entrants. As he knows, some of the divestments that have been required recently have brought entrants into the market that have concentrated on lending to small and medium-sized businesses. That is a force for good, but we need—and I want to see—much more of it.

[Mark Field (Cities of London and Westminster) (Con)]

May I, too, welcome the Minister’s statement? I also associate myself with the words of the Treasury Committee Chairman, my hon. Friend the Member for Chichester (Mr Tyrie).

The City of London should have nothing to fear from arbitrage, although it is sometimes said that it should. If we have a regulatory system that is robust and fair, it will pass the test of time and, in the medium to long term, will become a great attraction of the City of London.

Whether we like it or not, we need our banks more than ever, whether we are small businesses or individuals. There is a danger that with 20:20 hindsight, we are finding ever more scandals and examples of mis-selling, whether with LIBOR, interest rate swaps or payment protection insurance. Will the Minister make it clear to the banks that we need to draw a line under these scandals? There is a danger that we are falling further and further down a slope and that it will be extremely difficult for banks to regain the trust of the public at large. Without that trust, the broader economy will suffer

[Greg Clark]

My hon. Friend speaks with great expertise. He has worked in and represented with distinction the City of London over the years, and more than anyone he recognises the importance of it re-establishing its prestige. Part of doing that and of sending a signal to the current generation working in financial services is to say clearly that the misdeeds of the past need to be put right. Where people or small businesses up and down the country have suffered detriment, we should not turn a blind eye. We should be rigorous in holding people to account, and acknowledging the harm done to businesses that have suffered from past mis-selling, and when we do that we should look—as in this case—to recover the costs of such mis-selling from the perpetrators. The Chancellor has set out that principle and I expect the banks to follow it in the months and years ahead.