Independent Banking Commission Report

Matt Hancock Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

I do not think the hon. Gentleman is being entirely fair. A specific part of the report deals with the remit of the new Financial Conduct Authority, and it says that—although we have changed our proposal in the light of the interim report, as I announced at the Mansion House—we could go further and make the requirement to promote competition an overriding duty on the authority. We should look at that over the next couple of months. I would welcome the input of the Select Committee, and we could respond later this year.

[Matthew Hancock (West Suffolk) (Con)]

On the impact of these reforms on lending, does the Chancellor agree that bad banks are bad for growth too, and therefore strengthening our banks and financial services industry, as proposed in the report, is good for the UK economy?

[Mr Osborne]

Yes, in short: I agree with my hon. Friend. John Vickers and his commissioners explicitly address the costs and benefits of these changes, and although they accept that there will be some additional costs, they will be more than outweighed by the broader benefits that include the benefits of having an environment in which banks are seen as more stable and the benefit to the UK economy of retail banks using their retail deposits to support retail lending.