My hon. Friend is absolutely right. If we believe the Bill to be the end of the story, we will do a disservice not only to the hard work done already,
but to the industry and to the wider public. I hope the Minister and the Government will take that on board. We must always be vigilant and look to the future.
1.30 pm
The commission was unable to consider several areas, which no doubt will come before us in the future, concerning the culture of banking—not just in retail banking, but in investment banking and on the trading floors—and other areas on which I am sure there will be more to do. Millions of consumers have fallen victim to the mis-selling of products in the past 15 years, but although many have successfully claimed money back, the general public see only that those who sanctioned the products and oversaw their mis-selling have not necessarily been held to account. That will remain a concern. Despite the huge economic and social importance of the banking industry, there are still no uniform professional standards for bankers. As I pointed out earlier, those with responsibilities in other professions—teachers, lawyers, medical health professionals—must comply with certain professional standards and codes of conduct, which is important.
There is concern that standards have not improved enough in the years since the initial banking crisis—as I said, we still hear of ongoing malpractice in the industry. Recent research from Which? has found that 65% of bank staff with a sales role say there is now more pressure than ever to meet sales targets and that almost half know of colleagues who have mis-sold products in order to meet their targets. It was reported today, in the context of the latest fine on Lloyds, that one bank employee sold products to his family and others in order to meet the incentives and not be demoted. If that is the case, it is exactly the kind of thing that the general public are concerned about.
One in four of those surveyed said that targets drove employees to sell inappropriately. Surely there can be nothing more inappropriate than people feeling under that kind of pressure. The report also found that two thirds of people thought that bankers were unlikely to lose their job if they lied or cheated. Despite the tougher regime and legislation we are putting in place, the general public are not convinced. A similar proportion think that bankers are unlikely to lose their job if they fail to comply with industry codes of conduct and even if they deliver consistently poor service or receive a lot of customer complaints.
Interestingly, given that we tried at various stages to introduce the concept of a fiduciary duty to look after customers, only 6% of people thought that bankers acted in the best interests of consumers. Only one in four felt that bankers were properly trained or qualified. Clearly, then, the industry has a long way to go to regain the public’s confidence. In discussing these issues, however, we need to think about those in the banking industry who are not making the big decisions at the top but are doing the front-facing work with customers. We must protect them and ensure that they are not put under pressure to sell or provide products incorrectly. On a wider issue, of course, we also need to protect the taxpayer from ever again having to bail out the banks.
The Opposition are not alone in thinking that. Sir David Walker, the chairman of Barclays, said on 5 February 2013 in his appearance before the commission:
“My view is that the best thing that could happen is for the Commission to say that it thinks that something like a banking standards board, designed to professionalise banking…be put in place and commend that as an initiative to be undertaken with urgency”.
The chief executive of the Chartered Banker Institute told the commission on 14 January:
“My predecessors tried to encourage banks and bankers to support professional qualifications and membership of professional bodies… I have tried in the past five years to say, ‘Look, in order to rebuild the banking industry, it’s fine to look at rebuilding regulatory structures and the structure of the industry, but the whole issue of culture and standards is one that is equally important.’”
He said he had been trying to bring attention to that for the past five years and arguing for a re-professionalisation of banking.
If the Minister does not wish to listen to us or those individuals, I should quote the Chancellor, who himself told the commission in February that we should develop the
“kind of professional standards...that you see in the medical profession or the legal profession”.