PARLIAMENTARY EARLY DAY MOTION
CRUIKSHANK REPORT ON BANKING (8 May 2000)

That this House is concerned by the failure of the UK banking system either to generate effective competition or to accept responsibility for problems of financial exclusion due to poverty; age and geographical isolation as reflected in the large scale programme of branch closures; notes the conclusions of the Cruickshank Report that there are 'profound competition problems and inefficiencies in the market for money transmission services' due to 'a series of unregulated networks mostly controlled by the same large banks who in turn dominate the market for services to SME's and personal consumers'; further notes the analysis of the Cruickshank Report suggesting that the banks consistently make 'excessive' returns to shareholders worth up to ú5 billion per annum at the expense of customers by exploiting lack of effective competition and regulatory privileges; regrets the Government's lack of urgency and radicalism in addressing the problems of an industry crucial to the UK economy as it competes in an e-commerce world; calls on the Government to ensure that banks are exposed to the full rigours of competition law and in particular that the Competition Commission investigates anti-competitive practices and excessive charges by members of the ATM LINK network, apparently in breach of sections 2 and 18 of the Competition Act 1998; calls on the Government to ensure that all prospective bank mergers are referred to the Competition Commission; calls on the Government to introduce into the Financial Services and Markets Bill a requirement that the Regulator upholds the interests of vulnerable consumers, particularly the elderly, disabled and geographically isolated, as is already the case in the Utilities Bill; and, in the absence of effective competition and a substantial voluntary contribution by the banks to social banking, calls on the Government to examine other mechanisms for curbing excess profits in the sector such as a levy on bank profits.

Sponsored by:
Sir Vince Cable (Liberal Democrat)