Outlook: Banking review
Wednesday 14 April 1999
The OFT, it seems, was not convinced there was sufficient prima facie evidence of anti-competitive behaviour to merit a competition inquiry. John Bridgeman, felt uncomfortable enough ordering a Competition Authority probe of the supermarkets. With the banks, he put his foot down.
Which is how the whole thing ended up with Mr Cruickshank. Gordon Brown, the Chancellor, is convinced that the banking system is failing small business and failing the British economy, and he's determined to prove it. But if this investigation is not really about competition, what is it about? The line from the Treasury is that banking is an immensely important part of the economy - which is true enough - and, as such, it is vitally important to make sure that the sector works as efficiently as possible.
While this is a laudable enough objective, it is not obvious that Mr Cruickshank's review - which is starting to look in danger of descending into the type of theoretical mumbo jumbo that dogged the OFT supermarkets probe - is the most sensible way of going about things. For the time being, he's merely contributing to the banks' supposed inefficiency by taking up so much of their time.
None of this is to say that fostering competition is unimportant or that Britain's banks (or Britain's supermarkets) couldn't do a lot to improve customer service and cut charges. But as dull and as boring as it may sound, the best thing that the Treasury can do to give the fat and lazy parts of the UK economy a wake-up call is to get the macro-economy on track and let the market do the rest.
Stamping on flagrant competition abuses and ensuring that public policy does not distort entrepreneurial incentives obviously require government attention.
The seemingly endless reviews and consultations, the convoluted theoretical studies that this government appears so prone to are probably harmless enough in themselves, but it seems unlikely they are going to shed much light on the darkness. When it comes to encouraging business, any number of well intentioned reviews is no substitute for getting the macro-economy right, cutting red tape, and reducing corporate taxes.
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Dutch King Willem-Alexander declares the end of the welfare state
- 3 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 4 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks busy Dublin road
- 5 'Cool kids' can go on to become losers in later life, study finds
Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Edward Heath 'child sex abuse' allegation: Investigation to be held into Wiltshire police handling of alleged claim in the 1990s
Labour leadership race: Jeremy Corbyn could be the next Prime Minister, says Ken Clarke
A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...
£11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...