Andrea Leadsom is the Member of Parliament for South Northamptonshire. Follow Andrea on Twitter.
I couldn’t agree more with Greg Clark’s ConservativeHome column this week. It’s imperative that we re-establish the UK as the global leader in financial services. I’m therefore right behind everything Greg is proposing. My only plea is that he should go further and faster.
Specifically, I urge him to introduce full bank account number portability in the Bank Reform Bill. Doing this would mean bank customers could instantly switch between banks and if they wanted they could take their bank account number with them. Like when you change mobile phone provider, and take the telephone number with you, you shouldn’t have to face the hassle of changing bank details when you move. Bank account number portability would radically improve choice for customers, force banks to give better service, and encourage new entrants to the market.
I agree with the Minister that our financial services industry is critical to our economy; he is right to legislate to create a stringent supervisory regime so that banks can no longer look to the taxpayer to bail them out; he is correct that banks need to act in the best interest of consumers; we should have greater competition in the sector; and we should lead the world with our consumer financial services – but I think a real game changer would be bank account number portability.
One of the most striking aspects of the financial crisis, and more recent scandals such as LIBOR rigging, was the lack of choice that ordinary people felt when faced with a tableau of institutional failure. Much has been made of the regulatory shortcomings that contributed to these problems, and public opinion often reflects on the actions of government and regulators. However, not nearly enough attention has yet been directed at the competitive environment itself. And a competitive market is one of the best ways to ensure these problems are not repeated.