Business and the Economy
Debate between Vince Cable and Peter Tapsell(11 years, 12 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Vince Cable
My right hon. Friend is right that, in addition to the structural reforms, competition is essential. He will know that the Government are endeavouring to carry through as ambitiously as possible the divestment of branches from Lloyds, and a potential solution to that is in sight. There are also some excellent new banks coming up—Handelsbanken and Metro bank are good examples—and we must ensure that the regulatory process is as efficient as possible in order to get those up and running. I thank him for his continued pressure on that important point.
Sir Peter Tapsell (Louth and Horncastle) (Con)
My right hon. Friend the Member for Wokingham (Mr Redwood) mentioned the Vickers report. I very much welcome the announcement in the Queen’s Speech that its proposals will be implemented, but in the light of the recent massive losses in the derivatives market by no less a firm than J.P. Morgan, is not it clear that Vickers does not go far enough and that we really must go back to the basic principles of the Volcker rule and the Glass-Steagall Act by having a total separation of the retail banking system and the speculative banking system, which will otherwise destroy our business in this country and throughout the world?
Vince Cable
My right hon. Friend is quite right that the J.P. Morgan experience underlines the wisdom of separating the so-called casinos from traditional banking, but we take the view that in this country—J.P. Morgan, of course, is not a British bank—the solution we have advocated achieves that result at considerably lower cost than would the more extreme measures that I think he is advocating.
As with many other important industrial transformations, the Government’s role in the green investment bank’s infancy is key. By setting up the bank, which is the first of its kind in the world, we can provide capital and funding to nurture these nascent markets and secure a global competitive advantage for the UK.