Mandatory Reports to Be Made by Banks

Part of New Clause 3 – in the House of Commons at 7:45 pm on 15th July 1991.

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Photo of Mr Paul Boateng Mr Paul Boateng Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Treasury) 7:45 pm, 15th July 1991

This has been a good debate, although it is a pity that the response from the Economic Secretary was so very inadequate. He gave few answers to the many Opposition questions. It is clear from the response of Conservative Members to those answers that they are only too anxious to mull over them in the course of a good supper.

The Opposition, however, recognise only too clearly that the Minister's responses provide particularly thin gruel for the many deposit holders who are concerned about interest rates and about bank charges. We believe that the answers provide very thin gruel indeed for those who have suffered as a result of the collapse of BCCI. We want our questions to be answered.

It was instructive to hear the Economic Secretary's response to the important points that were raised by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). It revealed the arrogance and, I am bound to say, the complacency—I use those words with a degree of sadness—that have characterised the Government's response throughout the BCCI farrago. The response from the Economic Secretary was that my right hon. Friend did not know what the Bank of England had been doing since the 1970s. That is precisely our point. This House does not know what the Bank of England has been doing since the 1970s, although we have a pretty strong suspicion about what BCCI has been doing since the 1970s.

We ask—we reiterate our demand tonight—that in the interests not only of the many small business men throughout the country who have suffered as a result of the collapse and whose lives are in ruins, not only in the interests of the people who have been put out of work and whose homes and security have been threatened by the collapse of the bank, but on behalf of all those who are concerned about the probity of our banking sector, the way in which it is regulated and the way in which our supervisory system works, that there should be a full inquiry into the collapse of BCCI. Nothing less will satisfy the House or the people of this country. Then, perhaps, we shall have the answers to the questions that my hon. Friend the Member for Workington (Mr. Campbell-Savours) so eloquently asked when speaking to his new clause 37. They are important questions that need to be answered. We intend to continue to ask them day in, day out in the House until they are answered to the satisfaction of the House and the country as a whole.

I turn now to an examination of the important new clause 3, which, unfortunately, has not received the attention that it might have, for understandable reasons. There is a crisis of confidence among the customers and consumers of the banking sector about bank charges and the transparency of the market in banking services. That crisis is due to the banks' failure to come clean about the impact of their charges and costs on the ordinary consumer. Our mailbags provide evidence of that, as do the columns of both popular and serious newspapers. Again, the public are entitled to reassurance.

Having set the hare running and sought to obtain a scapegoat for their own abysmal economic performance and the impact of high interest rates, the Government have sought to blame the banks for the suffering of the many small businesses that have gone under during the past six months. Small businesses failures are at a record level and are more than 50 per cent. higher than the level at this time last year.

The Government's response has been to set in train a Treasury study, of which they have leaked the conclusion without making the body of its findings available to the public or the House. We want those findings to be made public and to be the subject of a debate in the House. It is interesting that, as our proceedings draw to a close and we look forward to the recess, we are told that we shall have the report "some time". Why can we not have it now'? Why can we not have a clear undertaking from the Economic Secretary that we shall have the report before the end of the Session? If we had it, we could ensure that it receives the full glare of public scrutiny that it deserves. What have the Government got to hide? Why are they not prepared to have an open debate? They do not like it, do they?—[HON. MEMBERS: "No."] No, they do not like it, but by jove we shall make sure that this one does not get away. We want a clear and unequivocal undertaking tonight that there will be a debate on this issue. Is that too much to ask?—[HON. MEMBERS: "No."] No, and that is what we are asking for, and we shall ask again and again.

One important point to which all those outside the House will want to hear a response is the issue of the new banking code. It was put out in draft form by the banks and received a unanimous thumbs down from consumer groups. The National Consumer Council described it as wholly inadequate. A whole range—a "raft" to use the Economic Secretary's word—of consumer-oriented bodies is seeking amendments and changes to it. When will the code be published? If we do not have a clear undertaking from the banks that it will be published before the end of the summer, let me make one thing crystal clear: after the next general election, a Labour Government will introduce a statutory banking code to protect the interests of consumers—