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Mr. Brown: The hon. Gentleman should not be so unkind to my hon. Friend the Member for Brent, North (Mr. Gardiner), who at least has views on the matter that he is prepared to express, unlike the shadow Chancellor, who had nothing to add to the debate.
My hon. Friend is right to say that action is needed now. That is why the proposals have been put forward under such a time scale. It is also the case that the new banking code proposalsI applaud the bankswere made in the past few days. Many of the proposals are a welcome advance on the previous position, and I welcome the specific recommendations in them. The Competition Commission believes that there should be further reforms of the banking code and has made informal suggestions about compensation and other matters where it feels there are errors that should be taken into account. Equally, we can move forward quite quickly with the other recommendations.
Dr. Julian Lewis (New Forest, East): Does the Chancellor accept that the statement that he began reading at 12.30 pm was one of the longest that he has made since he took office other than on Budget day? Does he accept that that means that it must have been a considerable time in the drafting? Does he also accept that he has given a totally inadequate response to the shadow Chancellor on his discourtesy in notifying the House at only seven minutes past 12 that such a statement would take place? Will he give an undertaking not to show such discourtesy to the House in the future? Finally, does he recognise that that was not only a discourtesy to the House and to the Opposition, but that it particularly upset his friends in the Liberal Democrats, whose Treasury spokesman was not even here to hear his statement?
Mr. Brown: I take it that the hon. Gentleman was trying to make a point about the Liberal Democrats by a very circuitous route. The fact of the matter is that this Government are bringing the Competition Commission report to the House with a statement, which he should applaud. We are also the Government who are publishing all the documents: the report of the Director General of Fair Trading, Sir Bryan Carsberg's report and today's report. We are doing so in a way that does not offend the normal procedures that must legally be pursued for Competition Commission reports. I would hope that the shadow Chancellor, as a lawyer, would begin to understand that.
All these points about procedure from Conservative Members are designed to obscure the most important fact to come out of this discussionthat they cannot even tell us at this point whether they support the major remedies that are proposed.
Mr. Jim Cunningham (Coventry, South): I welcome my right hon. Friend's statement. Could he clarify what action is proposed to reimburse small businesses? I am sure that he knows that although most businesses are overcharged, they do not receive 100 per cent. reimbursement. Will he say a little more about that?
Mr. Brown: We are proposing action for now and for the future; we are not proposing retrospective action and neither was the Competition Commission report. We have said that competition decisions should be independent of political interference. I hope that, in the light of what the Conservative party said at the election and what the Liberal Democrat party has said consistently, there can be all-party consensus that these decisions are best made by independent authorities under rules established by the House in legislation. While we prepare to legislate for that, we have the legal responsibility to announce and make those decisions.
We have done everything in our power. We appointed Sir Bryan Carsberg and consulted the director general, and my right hon. Friend the Secretary of State for Trade and Industry and I have studied in detail all the recommendations. It is right to go ahead now to implement those recommendations, which have been put forward by the Competition Commission, supported by
Mr. John Redwood (Wokingham): I welcome the Chancellor's strong commitment to competition and the remedies that will improve the service to small businesses. I wish that his belief in competition would extend to the currencies that they might bank in so that they could continue to have the choice of the pound or the euro. Is he at all worried that if the banks plan sharing branches at the same time as their revenues are cut, their response will be another big round of branch closures? What will he do to stop that getting out of hand and damaging the service, which we would not want?
Mr. Brown: I see no need for that to happen, but it is precisely so that the details can be studied that the Competition Commission has recommendedwe support that recommendationthat the banks should prepare a report for the Director General of Fair Trading. I appreciate that that is one concern that will be expressed. We believe that it is a soluble problem. The right way to proceed is for the banks and the director general to consider those detailed undertakings and for the work to be done on that. I take it that the right hon. Gentleman supports not only the independence of the Competition Commission but its recommendations in general.
Mr. Ben Chapman (Wirral, South): Does my right hon. Friend agree that, because a successful small firms sector is essential as the seedbed of future growth, the banks, by gaining excess profitsin effect, by ripping off small companieshave damaged the enterprise culture? Notwithstanding his earlier remarks, does he think that, in those circumstances, a withholding or a windfall tax might have been used to provide the venture capital and the higher risk financing that those small firms so desperately need?
Mr. Brown: I know that my hon. Friend was formerly a business adviser. I also know that during the next few days strong feelings on these matters will be expressed in every phone-in programme and letters column because people feel strongly about the costs of banking services and about the failure in many cases to pay interest on current accounts.
However, we have a balanced set of recommendations that point our way in both the present and the future. I am in favour neither of the withholding tax in Europe nor of the windfall tax that has been examined by the Competition Commission. The commission examined and rejected the taxas we are right to dobut I hope that we can move ahead with agreement on all the other measures that offer the prospect of opening up
Mr. Michael Weir (Angus): Neither the Scottish National party, Plaid Cymru nor any of the Ulster parties received an advance copy of the Chancellor's statement. Surely it is unacceptable that some parties received an advance copy while others did not.
That said, on behalf of the SNP and Plaid Cymru, I welcome the recommendations as a step forward. We are especially interested in the Chancellor's remarks about a national network of sharing branches. Does he realise that, due to branch-network closure programmes over the past few years, there are no bank branches at all in many rural and some inner-city areas? When he discusses those matters with the banks, will he consider proposals for extending banking to those areas to encourage small businesses to set up and continue there? When there are no bank branches, it is difficult for such businesses to continue to operateespecially those that are cash-intensive.
Mr. Brown: It is precisely for those reasons that there is work to make the network available to new entrants. It is also for those reasons that the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Edinburgh, South (Nigel Griffiths), who has responsibility for small business, has taken a great interest in bank branches in rural areas. The Post Office also has a role.
I ask the House to bear in mind not only that, historically, statements about the Competition Commission, or the Monopolies and Mergers Commission, have not been made in the Housethat was the practice followed by the previous Governmentbut that the shadow Chancellor asked me a question. I wrote to him this morning, stating that: