§ Brian CotterTo ask the Chancellor of the Exchequer if he will give new powers to the Office of Fair Trading to enable it to address competition issues within the banking payments system; and if he will make a statement. [145255]
§ Ruth KellyThe Government announced in the pre-Budget Report that the Office of Fair Trading will shortly take on an enhanced role in relation to payment systems for a period of four years. The Government will not legislate to give the OFT new statutory powers to carry out this enhanced role. However, the Government will review competition in the industry after a period of four years and legislate unless there has been significant improvement. Further details on these proposals will be announced by the OFT in due course.
§ Brian CotterTo ask the Chancellor of the Exchequer on what evidence he has based his decision to adopt a non-legislative route to tackle competition issues within the banking payments system; and if he will make the evidence public. [145256]
§ Ruth KellySince the publication of the Cruickshank report on Competition in UK Banking, the payments industry has made moves to address some of the competition concerns the report identified, in areas such as price transparency, wholesale pricing, access, and governance. In addition, in response to the findings of the Competition Commission report into SME banking, the OFT has negotiated agreements with the main clearing banks to improve conditions for competition and consumer choice in SME accounts. Finally, the OFT is currently investigating the interchange fee arrangements in the MasterCard credit and charge card schemes under the Competition Act 1998. The OFT will continue to use Competition Act powers where appropriate to address competition concerns in this sector.
2W However, the Government recognises that problems remain and that an increased focus on competition in the industry would deliver significant benefits. It believes that the OFT could provide this focus and address the remaining concerns, in advance of any legislation. The Government therefore announced in the pre-Budget Report that the Office of Fair Trading will shortly take on an enhanced role in relation to payment systems for a period of four years. The Government will then review competition in the industry and legislate unless there has been significant improvement. Further details on these proposals will be announced by the OFT in due course.
§ Brian CotterTo ask the Chancellor of the Exchequer what recent discussions he has had with(a) the banking industry and (b) small business organisations in relation to competition within the banking payments system. [145258]
§ Ruth KellyMinisters and officials regularly meet representatives from the banking industry and small business organisations and discuss a range of issues, including competition in payment systems.