Press Releases

HISTORIC PRESS RELEASE : Banking Competition to Deliver Benefits to the Consumers – Government Response to the Cruickshanck Report [August 2000]

The press release issued by HM Treasury on 4 August 2000.

In accepting Don Cruickshank’s report Chancellor Gordon Brown announced a package of new measures to improve competition in the UK banking market and deliver benefits to consumers.

Announcing the Government’s detailed response to Don Cruickshank’s wide-ranging report on improving competition in UK banking markets, Gordon Brown said:

“Don Cruickshank’s report is a major milestone in improving competition and ensuring that consumer benefits are central to banking services. In accepting the report’s recommendations, we are determined to drive competition forward and deliver real improvements for personal and small business customers.

“Too often banks and other financial services providers have been slow to give consumers the information they need to make informed choices and make the most of developing competition, new technologies and new products.

“Banking services, like every other sector of the economy, need to be exposed to the full rigours of competition. We aim to achieve this through reforming regulation, opening up payment networks and eliminating any special treatment.”

The Chancellor and Don Cruickshank have discussed the Government response in some detail. Don Cruickshank welcomes the Government’s plans for action across a wide range of the recommendations.

Measures announced today include:

  • CAT standards for credit cards together with emphasis on disclosure of key terms and conditions
  • Consultation on extending CAT standards to other financial services products
  • review of self-regulatory mechanisms such as the Banking Code to ensure they deliver sufficient consumer benefits
  • encouraging comparative tables of banking products and complaints against financial services firms.

The Government Response to the Cruickshank Report also includes announcements on progress in a number of key areas to meet the aim of improving competition in banking services.


– work is continuing to introduce a payments regulator through primary legislation to open up networks and oversee access charges for bank customers.

– consultation on detailed proposals to establish a licensing system for payment systems.

– a payments strategy for all Government Departments to ensure a coordinated approach in modernising government and responding to developments in and the introduction of e-commerce.

The Response also summarises significant progress in reforming charges and access to the cash machine network (LINK), including opening up the ATM network to non-bank providers, banning double charging for ATM withdrawals, and reform of wholesale charging structures. It outlines further work in progress, including OFT review of the LINK and MasterCard schemes.


– a wide-ranging review of the Financial Services and Markets Act two years after implementation to monitor its impact on competition in financial services.

– the review will also monitor the effects of regulation and policies introduced by the Government.

– steps to improve transparency and disclosure in the supervision of financial institutions.

– ensuring that the Government is not seen as giving special treatment to financial institutions in the development of Government initiatives.

– ensuring that Government, consumers and financial services providers are in the best position to take advantage of the opportunities presented by e-commerce.

– review of money laundering regulations to ensure that these are proportionate and minimise distortions to competition.

The Treasury has already acted by announcing an amended objective to ensure that competition issues will be central in its dealing with financial services. This is set out in the White Paper Public Service Agreements 2001 – 2004 published on 28 July.

Small and medium sized businesses

– ensuring that small businesses’ access to the financial services ombudsman is not restricted by the number of staff employed but determined by turnover.

– review of the proposed Banking Code for small businesses to ensure that it delivers sufficiently strong benefits to customers.

– encouraging the FSA to ensure that small businesses benefit from its work on comparative information and complaint handling.

– developing government information services to aid new entrants bringing competition to the small business market.

The Chancellor and Trade Secretary Stephen Byers announced referral of the supply of banking services to small businesses to the Competition Commission immediately on publication of the Cruickshank Report on 20 March. This work is already under way and the Competition Commission has been asked to report by June next year.

Thanking Don Cruickshank for his report, the Chancellor said:

“I very much welcome the hard work Don and his team put into the report. There is no doubt of the interest it has generated both here and abroad.

“The report lays firm foundations for the Government and the financial services industry to build on to develop one of the most competitive, dynamic and efficient financial services markets in the world.”