Andrew Tyrie, the chairman of the Treasury Committee, has written to the Professor Alasdair Smith, chair of the CMA’s banking investigation panel, to highlight the Committee’s concerns about the banking tax surcharge.
Tyre said of the correspondence: “There is widespread concern about the effects of the banking tax surcharge on competition.
“The CMA, after Treasury Committee pressure, produced an analysis of the surcharge in February, finding that it was unlikely to be a barrier to entry or expansion. Some disagree with this assessment, including the challenger banks themselves.
“The causes of inadequate banking competition extend well beyond tax. But the introduction of the surcharge may be adding to the already long list of problems facing challenger banks. The balance is tilted in favour of incumbents and against new entrants. It is to be hoped that the CMA comprehensively addresses the crucial barrier to entry problem.
“The Treasury Committee will scrutinise the CMA’s conclusions closely.”