DON CRUICKSHANK, the author of a controversial report on the competitiveness of British banks, is to launch an attack on the Government’s regulation of the sector.
Five years ago Mr Cruickshank’s report on banking competitiveness concluded that the main clearing banks operated a “complex oligarchy” that let them rip off customers by £5 billion a year.
The Government accepted nearly all the recommendations in the report. However, Mr Cruickshank said that a central recommendation has not been implemented.
The report recommended introducing a regulator for the payment systems to speed up cheque clearance times. However, while Gordon Brown accepted the need for greater regulation of payment clearing, the issue remains unresolved.
Mr Cruickshank said yesterday: “It is astounding that a chancellor can stand up in 2000 and announce plans for regulation of the payments system and it not to happen.”
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Mr Cruickshank said that the Civil Service had ways of stopping the introduction of policies they did not approve of. Regulation of payment systems is still being discussed by the Office of Fair Trading.
The former telecoms regulator, who will criticise the Government during a speech organised by the London Business Forum at the London Stock Exchange next week, also said that the banks and the Government “had a contract” to ensure the oligarchy continued.
The Treasury Select Committee, which has become a focus for concerns about banking practices, was not effective in breaking down anti-competitive practices, Mr Cruickshank said. “Banks traditionally had years of boom and bust. But that boom and bust has disappeared and banks have sustainable profitability,” he said.