Minutes of the Wholesale Distribution Steering Group – 18 May 2021

Minutes

Item 1 – Standing agenda items

4 May 2021 minutes:

The group agreed the 4 May 2021 minutes, and approved their publication

Sharing information on stakeholder management

The Bank participated in the Which? Cash Summit last week, which included a panel discussion on the changing use of cash during the pandemic, and what it might mean for future use of cash. The Bank highlighted two keynote speeches delivered at the event. Firstly, a speech by John Glen, Economic Secretary to the Treasury, who provided an update on the Government’s commitment to protect access to cash, and announced a consultation on legislative proposals which will be launched in Summer 2021. Secondly a speech by Sheldon Mills, Executive Director for Consumers and Competition at the FCA, on protecting access to cash and banking services. There had been some press coverage of the event.

The group agreed that it would be helpful to agree some answers to FAQs that might be raised in relation to the work of the WDSG, given the increased level of interest.

Item 2 – Next phase of work

Progress update

Eversheds reported that a number of meetings had been held focusing on agreeing the terms of engagement with KPMG who will act as lead technical consultants. There remain a number of points which needed to be resolved ahead of the next phase of work commencing, and the project plan will be re-baselined to reflect this.

Nine week project plan

Members agreed with the high-level work streams which were asset selection, commercial model and business case, and glidepath. Members also agreed with the key decision points captured on the plan, but noted that the scope of work and deliverables will need to be monitored closely to ensure there is sufficient information on the long term business case of the utility to make an informed decision on completion. This will be important to avoid further work being required at this stage of the project.

Eversheds noted that the previous guidance provided on a merger clearance was based on the earlier assumptions contained in the independent industry analysis. Any changes to the proposed model structure, for example consolidation of assets ahead of any utility being formed, would need to be reassessed and may require a different approach to competition assessment.

Item 3 – Review Action Log

Actions were reviewed and closed where applicable

Item 4 – AOB

The group agreed the proposal to move the WDSG meeting from Tuesday to Wednesday which would better align with the Industry Escalation Meetings (IEM).

The group discussed the importance of resolving the issues around KPMG’s terms of engagement in a timely manner to avoid further delay to the programme.

The Bank noted that Camilla Pegg would shortly be departing on maternity leave and thanked her for all her valuable contributions to the project.

Committee attendees

Bank of England: Sarah John (Chair), Nick Butt, Elisabeth Bertalanffy-Fournier, Ronan McClintock, Camilla Pegg, Molly Galligan

Eversheds: Ros Kellaway, Trystan Richards, Russell Saunders, Mark McLintock

Barclays: Tim Allen

HSBC: Sue Yarham

Lloyds Banking Group: Richard Hill

Post Office: Russell Hancock

Natwest: Richard Talbot

Santander UK: Robert White

HM Treasury: Derek Dunne

Virgin Money: Derek Walker

Danske: Kevin McMullan

G4S: Paul Van Der Knapp

Vaultex: Phil Vaughan

Royal Mint: Andrew Mills

KPMG: Simon Walker (in attendance for agenda items 1-3)

Apologies

Julie Fitzgibbon (BOI), John Garrett (AIB), Azin Roussos (HM Treasury), Anne Jessopp (Royal Mint), Martin Barrett (Lloyds)