Warning to Osborne on ring-fencing George Osborne is facing intense pressure to impose tough new legislation on banks next year, as a powerful cross-party coalition of MPs and peers mobilises to take on the City. The chancellor will bring forward a bill in 2013 to implement the "ring-fence" around retail banking proposed by the Vickers Commission, a measure intended to make the system safer and address the "too big to fail" question. Last week the Treasury said it would look carefully at proposals by a cross-party banking commission of senior MPs and peers to "electrify" the ring-fence but the chancellor has warned against "unpicking" the consensus around banking reform. Now members of the commission, chaired by Andrew Tyrie, have told the Financial Times that they will table cross-party amendments to the banking bill that will force Mr Osborne's hand, if the chancellor refuses to heed their advice. "I hope it doesn't come to that because I hope the government will take on our report," said Pat McFadden, a Labour member of the commission. But we will have to decide what to do if the chancellor rejects our recommendations. Mr Tyrie's willingness to assert parliamentary muscle over the Treasury was on display when the Commons Treasury committee - which he also chairs - forced ministerial concessions on Bank of England governance. "The precedent has been set and it will happen again," said a Conservative member of the banking commission, whose members include Lord Lawson, the former Tory chancellor, Justin Welby, the incoming Archbishop of Canterbury, and Lord McFall, former Labour Treasury committee chairman. It will be a pretty formidable alliance when the first three speakers in the Lords on any amendment are a former Tory chancellor, a former Treasury committee chairman and the Archbishop of Canterbury. Mr Tyrie's commission last week proposed giving regulators new powers - and imposing new legal duties on bank directors - to prevent banks picking holes in the ring-fence that is supposed to insulate retail and small business banking from riskier investment banking operations. The report was dripping with suspicion about the willingness of banks to respect the ring-fence and the ability of politicians to withstand lobbying from the City for a relaxation of a highly complex set of rules. Mr Tyrie told the FT: "The banks are telling us through their intermediaries the regulators need the banks in order to make this work as banking is so complicated. Nothing could make the case for electrifying the ring-fence more eloquently. The banking commission wants to give regulators a reserve power to break up the banks completely if the ring-fence does not work, but ministers fear that this could undermine the consensus around the Vickers report and create more uncertainty. Vince Cable, a former supporter of a full "Glass-Steagall" split of the banks said last week: "Andrew Tyrie is right to raise the question of what happens if it fails. But it would create further massive uncertainty to reopen the whole bank reform agenda at this stage. Mr Tyrie's committee will continue its work on the culture and ethics of banking in the new year. Evidence sessions will include a grilling for bosses of UBS, following the bank's involvement in the Libor rate-rigging scandal.