I thank the noble Baroness, Lady Kramer, for her support, and I agree with everything that she has said. I would just add the following point. I think that government policy is perhaps not wholly joined up in that I had a party from BIS come to see me as it was conducting an investigation into the problems with licensing new banks—how long the process took and what issues might be addressed to increase competition and make it, in a safe way, easier for new banks to get started. BIS is aggressively pursuing a more competitive banking system, and although I welcome the Government’s passive guideline for the PRA, it seems to me that it is slightly unnecessarily muted.
I was delighted to read an article on the noble Lord, Lord Sassoon, in yesterday’s Sunday Telegraph. In relation to the PRA it said:
“In particular, the test”—
of its success—
“will be whether competition in the banking sector improves. ‘One of the mysteries or tragedies of the banking system is how few new entrants there have been over many decades’”.
The noble Lord, Lord Sassoon, added:
“I would like to see a world much more like the US where thresholds for new entrants are lower, not higher, because they are less systemically risky”.
Again, the noble Lord, Lord Sassoon, seems to be equally of the opinion that a more competitive banking industry is a desirable objective.
I should explain that I was using the term cartel not in a legal sense but purely reflecting that where four organisations have about 80 per cent of the business they automatically tend to behave as a cartel. If one looks at the history one will find that, first, the abolition of banks giving any services to their customers was started by Lloyds and followed by everyone else, and likewise with the abolition of banking charges. So if there are four key players the others always have to follow whatever the lead one does. They are not necessarily collaborating. It was an economic point that I was seeking to make, not a banking point.
I shall withdraw the amendment although I think that merely asking the PRA to encourage a competitive banking industry is fairly mild. I greatly welcome the Government finally crossing the line and giving the PRA some kind of competitive objective. I hope that before the Bill is enacted the Government might reconsider, as the noble Baroness, Lady Kramer, commented, moving from a rather strange, passive, tortured objective to a simple, non-too-pushy, positive objective. I beg leave to withdraw the amendment.