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Banker Davies to become minister Banker Davies to become minister
(about 2 hours later)
The chairman of Standard Chartered Bank Mervyn Davies has been made a life peer and trade minister by Gordon Brown.The chairman of Standard Chartered Bank Mervyn Davies has been made a life peer and trade minister by Gordon Brown.
The BBC's Nick Robinson says he will effectively replace the ex-head of the Confederation of British Industry Digby Jones, who left in the last reshuffle.The BBC's Nick Robinson says he will effectively replace the ex-head of the Confederation of British Industry Digby Jones, who left in the last reshuffle.
Lord Jones was the minister of state for trade and investment at the Department for Business and Enterprise.Lord Jones was the minister of state for trade and investment at the Department for Business and Enterprise.
Mr Davies will be seen as adding bank experience to the government at a time of continuing economic difficulties.Mr Davies will be seen as adding bank experience to the government at a time of continuing economic difficulties.
He had already been advising the government, as a member of the Business Council for Britain, on how its business policies are working.He had already been advising the government, as a member of the Business Council for Britain, on how its business policies are working.
His appointment to an unpaid role as a minister in Business Secretary Lord Mandelson's department was confirmed earlier. 'Public service'
It had been thought he might become chairman of the Royal Bank of Scotland but it is understood he wanted a wider government position. A Standard Chartered spokesman said Mr Davies had resigned with effect from Wednesday and he will now be a minister in Business Secretary Lord Mandelson's department.
Nick Robinson said he would be announced as trade and investment minister, but in reality would be "banking minister", brought in from the sector to help the government sort out problems with the banks. The prime minister certainly likes using appointments to the House of Lords doesn't he? Peter LuffBusiness committee chairman
Lord Mandelson, being grilled by the Commons business committee, said Mr Davies would join the Labour Party and would not be paid in his new role, which he was doing "as a public service".
Welcoming him to the new role, he said the government would value his banking experience in helping deal with the current crisis, as well as promoting trade and investment.
Lord Davies will be one of seven ministers in the Business, Enterprise and Regulatory Reform (BERR) department - another three of whom are peers - Shriti Vadera, Stephen Carter and the business secretary himself, who was made a peer when he was brought back into the cabinet in October.
'Best person'
Labour member of the Commons business committee Lindsay Hoyle asked if there could be another full-time minister based in the Commons "just to get a bit of balance back", in the interests of accountability and scrutiny.
And chairman Peter Luff, a Conservative MP, added: "The prime minister certainly likes using appointments to the House of Lords doesn't he?"
The business secretary responded: "He likes getting the best person in harness to serve the country and I think that all these ministers are doing precisely that - but not to the exclusion of the Commons."
He said he recognised concerns about so many ministers being in the Lords rather than Commons but said he hoped ministers would keep up their "level of responsiveness" to the Commons and told the committee to keep them in check if they did not.
It had previously been thought Mr Davies, who was appointed CBE in 2002 for services to the financial sector, might become chairman of the Royal Bank of Scotland.
His appointment comes as the government outlines a plan to guarantee up to £20bn of loans to small businesses.
In October, three major British banks - RBS, HBOS and Lloyds TSB - were bailed out with £37bn package aimed at helping banks shore up their balance books and make affordable funding available.In October, three major British banks - RBS, HBOS and Lloyds TSB - were bailed out with £37bn package aimed at helping banks shore up their balance books and make affordable funding available.
But banks eager to escape further problems have drawn in their lending - business leaders have said a lack of available finance played a part in the downturn of the UK economy. But banks have drawn in their lending - business leaders have said a lack of available finance played a part in the downturn of the UK economy.
On Wednesday the government will outline a plan to guarantee up to £20bn of loans to small businesses.
Lord Jones was one of several outside experts Gordon Brown appointed into ministerial jobs after becoming prime minister, when he called for a "government of all the talents".
But his appointment proved controversial, particularly as he was not a Labour Party member and he expressed concerns about government plans to tax "non-domiciled" foreigners in Britain.