Banking

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 5th November 2013.

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Photo of Tony Baldry Tony Baldry The Second Church Estates Commissioner 11:30 am, 5th November 2013

What recent steps he has taken to increase competitiveness in the banking sector.

Photo of Sajid Javid Sajid Javid The Financial Secretary to the Treasury

The Government are driving a wide-ranging and ambitious programme of reforms to make the banking sector more competitive and to give consumers a better deal. This includes reducing market barriers, encouraging current account switching, and putting competition at the heart of the regulatory system.

Photo of Tony Baldry Tony Baldry The Second Church Estates Commissioner

Will my hon. Friend commend the Church Commissioners for their investment in Williams and Glyn’s as a new competitive bank that intends to have the highest ethical standards? As well as increasing competition in banking, is it not also crucial that we have a system of banking regulation with clear accountability and responsibility, avoiding mistakes in the system designed by the previous Administration?

Photo of Sajid Javid Sajid Javid The Financial Secretary to the Treasury

I congratulate the Church Commissioners on their role and the expertise that they bring. Given that my hon. Friend is a commissioner, I take this opportunity to congratulate him too. He is right to highlight the fact that the previous Government’s changes to financial regulation contributed significantly to the banking crisis in 2008. That caused misery and hardship for millions of hard-working families, yet I notice that the Opposition have still to apologise.

Photo of George Mudie George Mudie Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee), Chair, Statutory Instruments (Joint Committee), Chair, Statutory Instruments (Select Committee)

The Minister will agree that a level playing field is important for competition. Why, then, did the Chancellor make the misguided offer to the Chinese Government to give light-touch regulation to Chinese banks operating in this country? If we are going to have competition, will that approach be extended to all other banks?

Photo of Sajid Javid Sajid Javid The Financial Secretary to the Treasury

The hon. Gentleman will know that such decisions are made by the independent regulators—in this case, the Prudential Regulation Authority, which has made the reasons for the decision absolutely clear.