Independent Banking Commission Report

Jeremy Lefroy Excerpts

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

The hon. Gentleman says we’re all doomed, but the idea of these reforms is to ensure that we are not doomed in the future.

[Jeremy Lefroy (Stafford) (Con)]

Following on from the Chancellor’s answer to the hon. Member for Middlesbrough (Sir Stuart Bell), the figures in the Vickers report indicate that there will need to be between £200 billion and £400 billion of equity capital and other funds at risk within the ring fence. What impact will that have on the provision of capital and credit to business?

[Mr Osborne]

John Vickers explicitly examines the argument that this will somehow undermine credit and comes to the conclusion that it will not. He says that, first, because the broader benefits of a stable banking system to the banks themselves and to the economy outweigh the costs and, secondly, because retail banks will, as I say, be more encouraged to use their retail deposits to support retail lending.