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.
- 2 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 3 Andy Murray takes to Twitter to show off his Christmas jumper
- 4 Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
PlayStation and Xbox hacked by Lizard Squad
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
Dublin court rules brain-dead pregnant mother's life support can be switched off
Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...