Banking Reform

Stephen Williams Excerpts

Monday 29th November 2010 Commons Chamber

[Chris Leslie]

We do not necessarily need to end all bilateral trading of derivatives, but to pick up where the G20 in Pittsburgh left off in 2009. It resolved to move towards greater exchange trading, but not necessarily the end of all over-the-counter trading. I know that we disagree on this specific point in the wording of the motion, but it is important that we should be responsible when considering some of the reforms that are being suggested. It is good that the Backbench Business Committee has enabled this debate to take place today.

I have doubts about the Government's policy on this because they are leaving it very much to the European institutions to lead on this matter, and leaving it up to the European market infrastructure regulations, which are now emerging as the only likely vehicle for reform. It is striking that Ministers are happy to be led, rather than showing leadership on this matter themselves, especially as the UK financial services industry is at the forefront of many of these activities. I urge Ministers to be far more front-footed on these reforms, rather than hanging back and complaining that details and policy are being foisted upon them.

We also need to consider some of the other regulatory shortcomings that have been raised in the debate, including those relating to bonuses, to management incentives skewing behaviour, and to transparency. I do not want to be too partisan, but I find certain aspects of this situation astonishing. My hon. Friends the Members for Streatham (Mr Umunna) and for Leeds East (Mr Mudie) said that the Government needed to show more leadership on banker remuneration. We have seen the appalling confusion and weak will of Ministers even over listing the number of bankers earning more than £1 million. Even that seems to have been a difficult step for them to take.

It is a particular shame that the Business Secretary is not here tonight—at least we have a couple of Liberal Democrats representing him here—especially as he was so vociferous on this subject exactly a year ago in his article in the Daily Mail. He described the proposal to disclose simply the number of bankers earning more than £1 million as a “whitewash”, saying that it would represent only “a small advance”. He went on to say:

“Shareholders who own the banks and the taxpayers who guarantee them have every right to know who is being paid how much and for what…Directors of public companies are already required to declare their earnings…The failure of Walker to grasp this is compounded by Alistair Darling’s meek acceptance of his recommendations. There are splits in the Government…Taxpayers sign the bankers’ bonus cheques, so we must see the names and numbers on them.”

We clearly do not need to wait to see the Business Secretary’s appearance on the Christmas special of “Strictly Come Dancing”; he is perfectly able to perform his volte-faces, somersaults and U-turns one after the other. He is performing spectacular political cartwheels more often than ever before.

[Stephen Williams (Bristol West) (LD)]

rose—

[Chris Leslie]

I would love to hear what the Liberal Democrats have to say about this.

[Stephen Williams]

Let us see whether the hon. Gentleman can pirouette his way out of this one. During the last Parliament, probably the largest piece of legislation that went through was the new Companies Bill. Given that my right hon. Friend the Member for Twickenham (Vince Cable) called at that time for more disclosure in companies’ reports about directors’ remuneration, why did not the previous Government rectify that anomaly?

[Chris Leslie]

It is difficult for the hon. Gentleman to criticise the previous Government, when they put the statute in place ready to be triggered by the present Government. It is baffling to my constituents and to his that we cannot allow them to see the simple figure of how many multi-millionaire bankers there are. I am not suggesting that we reveal their names, just the number involved.