Ex-Treasury chief Robson accused of 'suppressing' Cruickshank

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The Independent Online

Don Cruickshank, author of a report on competition in UK banking in 2000, has singled out in all but name Sir Steve Robson, a former deputy permanent secretary to the Treasury, for dragging his feet on a reform of the industry.

Don Cruickshank, author of a report on competition in UK banking in 2000, has singled out in all but name Sir Steve Robson, a former deputy permanent secretary to the Treasury, for dragging his feet on a reform of the industry.

Five years on, Mr Cruickshank said not much had changed and sustained profitability was a sure sign banks still ran a complex monopoly. His comments, in a newspaper article and to be repeated in a speech tomorrow at the London Stock Exchange, come in the middle of the bank earnings season, with Barclays and Standard Chartered unveiling record profits last week and others to follow suit this week and next.

In his report, Mr Cruickshank had proposed an independent regulator of payment systems - called PayCom - that was required if customers were to get a better deal from the "highly concentrated and highly profitable UK banking industry". PayCom was never established. Mr Cruickshank, a former chairman of the London Stock Exchange, said this was "because senior Treasury civil servants did not want it to happen", adding: "The senior civil servant responsible for the banks while I was doing the review went to Royal Bank of Scotland shortly thereafter." This is a clear reference to Sir Steve.

The former Treasury official, now on the boards of RBS and Cazenove, could not be reached, but friends said Mr Cruickshank's remarks were a "travesty" of the truth. The Bank of England is thought to have been against his recommendations, rather than the Treasury.

Mr Cruickshank's report, commissioned by the Treasury and published in March 2000, attacked banks for poor service and overcharging personal and small business customers by up to £5bn a year. He said the Government did not act on his report because of a "regulatory contract" between itself and the banks. "Unnecessary" regulatory barriers stopped new players entering the industry, there were barriers to efficiency and innovation, barriers to consumers switching accounts and a lack of transparency.

The customers' position is worse than five years ago, he said. As new technology was turned to the banks' advantage, they made ever-higher profits and there were still no new players.

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