Banking

Debate between Neil Parish and George Osborne

Wednesday 9th February 2011 Commons Chamber

[Mr Osborne]

I am certainly happy to raise the issue about representation that the hon. Lady mentions, but—[Interruption.] These people seem to forget that they were running the country for 13 years and had every chance to do the things that they complain about now, and they completely failed.

To return to what the hon. Lady said, I will raise the specific issue of the representation of workers within the banks. As I have said, most people, including myself, find some of the levels of pay in the financial services sector extraordinary. We are seeking to start to constrain them, although we obviously have greater control over the semi-nationalised banks. I hope that we are also ensuring that we get the tax revenues required to help pay off the nation’s credit card, the budget deficit.

[Neil Parish (Tiverton and Honiton) (Con)]

Like many hon. Members, I welcome the Chancellor’s getting greater lending from the banks for small businesses, but can he assure us that there is proper competition within the banking sector, so that money is lent at competitive rates? That is one of the problems that businesses in my constituency are having: they cannot get the money at the proper rate.

[Mr Osborne]

My hon. Friend is right that competition in the banking industry is very important. In the past two or three years we have seen a massive consolidation of the banking industry, with many of the building societies being folded into the larger banks. HBOS disappeared, for understandable reasons, Northern Rock had to be nationalised and so on. One of the remits of the Vickers commission, the Independent Commission on Banking, is to examine competition in the sector, and of course John Vickers himself has personal experience of competition issues. That was one reason why I asked him to take up the post. The commission is examining the specific issue that my hon. Friend raises.