New Clause 11 - Review into competitiveness

Part of Financial Services (Banking Reform) Bill – in a Public Bill Committee am 3:45 pm ar 16 Ebrill 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Greg Clark Greg Clark The Financial Secretary to the Treasury 3:45, 16 Ebrill 2013

I recognise that there are those problems. The competition authorities should have close regard to what happens in different markets of the United Kingdom. I must own up to having taken some years ago a diploma in European Community competition law, as it then was, and it was a fascinating area of study. It is clear that the definition of markets is not by default the national market but it accords to the practices of consumers. I am absolutely certain that the hon. Gentleman is right in thinking that the Province of Northern Ireland would be deemed to be a particular market in which the full rigour of competition law should apply.

My hon. Friend the Member for Amber Valley was very modest and self- deprecating when introducing his new clause, but what market shares are compatible with competition is a perfectly standard concern of regulators in the anti-trust field. It is for the competition authorities to review that and to look in particular at barriers to entry. Sometimes a high market share will be the result of the effectiveness and the pro-competitive aspect of the market: a particular player will be so successful that without there being any restraints, protections or barriers to entry, it manages to attract a lot of custom. That points to one of the problems with the approach in primary legislation that my hon. Friend recommends: it is double-edged. Banning people from opening accounts with a bank that is successful, because it has reached its maximum quota of accounts or loans, is difficult. The question requires a judgment that is forensic, that looks at the market dynamics, barriers to entry and competitive behaviour, and that takes into account capital requirements. Such processes must be conducted by the competition authorities that have been set up for that purpose. We should look to them to exercise those powers actively.