Independent Banking Commission Report

Sheila Gilmore Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

John Vickers explicitly examines the argument that this will somehow undermine credit and comes to the conclusion that it will not. He says that, first, because the broader benefits of a stable banking system to the banks themselves and to the economy outweigh the costs and, secondly, because retail banks will, as I say, be more encouraged to use their retail deposits to support retail lending.

[Sheila Gilmore (Edinburgh East) (Lab)]

One of the forms of banking competition that many people in Britain want is the encouragement of more mutuals, with a legal safeguard to prevent them from being refloated. What plans does the Chancellor have to progress that agenda?

[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.