Chair of banking standards commission says government amendments to ringfencing proposals make them useless

Conservative MP Andrew Tyrie, chairman of the parliamentary committee on banking standards, has criticised the UK government's decision to weaken proposals for major banks to face the constant threat of being broken up if they fail to ringfence their everyday retail operations from their investment banking activity.

Tyrie said that amendments to the committee's ringfence "electrification" proposal have rendered it so weak as to be "virtually useless”. He added that the government’s response to the report “falls short on a number of important points”.

Shadow financial secretary to the Treasury Chris Leslie also criticised the chancellor's "lettuce leaf" approach to electrifying the ringfence, in particular, the amount of time it would take to take action. Banks would effectively get five warning notices that could be dragged out over six years before being broken up. Leslie said there could be "very serious consequences" if this backstop is not properly in place.

The government's response is being debated in the House of Commons, which you can watch live here.