My Lords, I offer my noble friend my heartfelt welcome to this House. Perhaps I may also say how pleased I am that we will have the benefit of his skills and talents in charge of this very important ministry, which will add to the tremendous skills already being displayed by the Prime Minister and the Chancellor of the Exchequer in tackling the banking crisis that we are facing.
I commend the order in the sense that I welcome the extension to this sector of the powers under the Enterprise Act to intervene in circumstances where the public interest is at stake. Financial stability is the paramount public interest issue. However, I am concerned about the Lloyds-TSB/HBOS merger. I should draw to the attention of the House an interest: I advise another banking group. However, I feel able to speak on this matter because, a little while ago, when I was deputy chairman of the Competition Commission, I had the privilege of chairing the inquiry into the proposed Lloyds-TSB/Abbey National merger, which was a much smaller merger. I commend to your Lordships the report into that merger. It gives a good insight into exactly what Lloyds-TSB might do as a merged entity.
Other noble Lords have already referred to the merged entity's large market share of current accounts and mortgages. In the business model of our high street banks, the current account is the entry product, if you like, because the business model is based on the need to cross-sell. Others have referred to some of the difficulties which the banks have gotten into by being forced to cross-sell, perhaps often inappropriately, because they make no money at all from current accounts. I ask the Minister to take careful note of the risks to consumers of this very large merged entity. At the moment, the cards are all in the air in the banking market. We may have part-nationalised banks, and we will have a very large merged entity. The competitive landscape in banking is uncertain. Given that, will the Minister take careful account of the risks to the consumer?
There should be more than simply a reliance on the existing powers of the OFT to intervene. For all its merits and strengths, that body moves rather slowly in this area. We need to be certain that this matter will be subject to careful scrutiny. Does the Minister propose to look at the situation after two years to ensure that there has been no market abuse? Can he explore the possibility of securing pre-merger undertakings from Lloyds-TSB/HBOS?