Regulatory and Banking Reform

Brian Binley Excerpts

Thursday 16th June 2011 Commons Chamber

[Mr Hoban]

Is that it? I really did wonder. The hon. Gentleman has played an important role in the Treasury Committee in challenging both this Government and the previous Government and holding them to account on banking reform and I should have thought he would welcome the fact that we are taking action to strengthen regulation of the banking system and to make sure that our banks are more secure. It would have been great if he had supported those measures.

[Mr Brian Binley (Northampton South) (Con)]

I welcome the Minister’s statement, but may I remind him that the reorganisation of the regulators or, indeed, of the banking structure will do little to stimulate demand quickly? Mortgages were down 9% in April on the same period last year and other sectors are seriously under pressure. Will the Government think more seriously about stimulating demand?

[Mr Hoban]

My hon. Friend makes an important point and one reason why it was important to reach agreement with the banks on Project Merlin was to send a clear signal to businesses that there was credit available to viable businesses, as well as encouraging businesses to come forward to banks with applications for loans. Also important is the work that the British Bankers Association taskforce is doing to commission an independent survey to look at the relationship between banks and their customers. One concern is the amount of discouraged demand in the system and I believe that by looking very carefully at the relationship between banks and their customers, we can see whether banks are putting off businesses from making those applications.