12th September, 2011, House of Commons
Mr Edward Leigh (Gainsborough) (Con): If there is one class of people more unpopular than MPs, it is bankers—and I know where all the populist pressure is coming from. However, regulators do not create wealth; they stifle it. Does my right hon. Friend acknowledge that we have to live in the real world and that London’s pre-eminent position is based on the fact that we have the lightest regulatory regime in Europe? Will he undertake to preserve that for the sake of our wealth creation and not kill the goose that lays the golden egg?
Mr Osborne: Well, it was not much of a golden egg, unfortunately, in recent years. It is important for this country that London, Edinburgh and other centres remain globally competitive and that London remains the pre-eminent global centre for finance. Some of the changes taking place in the City, such as the one I mentioned, involving trying to develop an offshore renminbi market, are all part of London being a competitive place to do business. However, being a competitive place in which to do financial services does not mean that there has to be a huge taxpayer subsidy for universal banks and their retail banking arms in the UK. John Vickers explicitly deals with the competition issue. People might have expected him to come to a different conclusion on this, but one of the interesting things he said was that we should not impose additional capital-to-equity ratios on investment banks, precisely because he does not want us to make them internationally uncompetitive.