---

Banking in Scotland

I am delighted to make a brief contribution to the debate. Although I represent a constituency south of the border, I retain a great affection for, and interest in, the Scottish banking system. I should declare that I retain my very first current account, which is with the Royal Bank of Scotland, and which I took out when I was in my first job. I hope that that shows that I have some interest in the debate and that what I have to say has some relevance. The banking sector in Scotland has been a significant player in the Scottish economy for many years, and I hope that it will be for many years to come. I am relieved that, for all the problems that Scottish banks have gone through, they have avoided some of the major catastrophes that have befallen banks in Ireland and Iceland—I mention that with some trepidation because I do not want to reignite the arc of prosperity debate between the hon. Members for Glasgow South West (Mr Davidson) and, if I can get the pronunciation right, for Na h-Eileanan an Iar (Mr MacNeil)—that was not bad. I welcome the Committee's finding that despite all the problems, Scottish banks' reputation for excellence has not been permanently damaged. I am heartened that the Committee found that there are some signs of an upturn in the Scottish banking sector, with new investment taking place. I want to make a specific point about the responsibility of Scottish banks, and indeed all banks, to promote good financial education among their existing customers and the population at large. I have fond memories of the time when the Royal Bank of Scotland came to my primary school in Hamilton to give us some basic lessons about how banks worked. It set up a small savings account, into which we were encouraged to deposit a small proportion of our pocket money. At a young age, that instilled in me some very basic and good lessons in sound finance. My friends might uncharitably say that I have kept those lessons with me and talk about my hesitation to contribute towards buying rounds and the like, but the lessons that I learned then were valuable. Over the years, we have lost sight of such things. The events of the past couple of years have shown that all of us, including the Government, individuals, some businesses and the banks themselves, have lost sight of basic prudence—I seem to remember someone else using that word once in a while—which encouraged people to borrow only when it was sensible to do so and only for investment in genuine products, rather than just to fund current consumption. I want to use this opportunity to call on the banks to remember their responsibility. I am sure that they all have specific schemes in place and that they will say that they educate their customers and others in society, but I want to emphasise how important it is that they do that, that they do not lose sight of such things and that they do all they can to boost them. I was concerned to read in the Committee's report—the hon. Member for Glasgow South West expanded on this—of evidence that the banks are placing undue pressure on customers to take out products that might not be in their best interests and to take on more debt than is sensible. It causes me some concern that the lessons of the past few years have not been learned. I welcome the Government's initiative to establish the consumer protection and markets authority. When the legislation to introduce the authority is introduced, a central part of its remit will be to remind the banks that they have an obligation to promote good financial education and sound financial advice so that we do not get back into a position where everyone—everyone probably is guilty of this in some respect—takes out too much debt, funding their lifestyle rather than sensible investments.