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Bank Penalty Charges

I share the hon. Gentleman’s concern and agree that his proposal would be a step in the right direction. The truth is that with modern electronic banking, there is basically no cost to banks because it is their decision whether to allow money to be drawn, and they can do that automatically. The key issue is that banks should not make unreasonable charges. It is clearly unreasonable that charges can mount up to hundreds of pounds in a month, as in some of the examples I gave, possibly before customers are even aware that they are being charged. If the Minister or I called our banks in such circumstances and moaned at them, they would probably waive the charges, but most people do not know that they can do that. Also, they are customers whom the bank is not as keen to keep as they might be to keep a Member of Parliament or someone on a good salary. I have no doubt that if the Minister rang up—he has some responsibility for the banks—he could get his charges waived without a problem, but that is not the case for people at the lowest end of the scale. Also, people assume, not unreasonably, that the bank charges are legitimate. Why would they not do so, given that the banks tell them that they are? Most importantly, if it is to take such a long time for the OFT to resolve the matter, and if the Government are to allow it to take so long, they ought to make it clear to the banks that now that the OFT has made a ruling—it has said that the same principle applies to bank charges as to credit card charges—they will expect banks to repay customers for any charges in excess of what is reasonable that have been levied since then. If that were made clear, these charges would end overnight, because the banks know that they will lose. Meanwhile, Ministers should step in. In 2000, the Cruickshank report, which was a Government report, established that banks are fundamentally different from other companies because of their social responsibilities, to which I have referred, and called for them to be treated as such, particularly regarding their high excess profits. Yet the Government have singularly sat on the report and failed to implement it. Will the Minister clarify the position and what he believes the intention of Parliament to have been? Will he publicise the issue so that people know not to pay the charges? The Government should start providing more consumer advice on how people can get these charges back rather than them having to rely on individuals such as Mr. Egerton. The Government could also chase the OFT for action, particularly to ensure that people get unfair charges back if the OFT concludes, as it should, that they should be stopped. I reiterate that the penalty charges are crippling people on low incomes. I believe that they are clearly illegal, and that if there was any doubt about that the banks would have the courage to fight a single case in the courts, which they do not. The banks are dodging the courts and the Government appear to be turning a blind eye. I hope that the Minister can reassure me otherwise.