Miliband to propose banking reforms in the UK
Ed Miliband will set out a blueprint for fundamental reform of the British banking system today, including forcing the “big five” to sell up to 1,000 more branches to increase competition.
The British Labour leader will point to the Libor rate-fixing scandal as vindication of his much-criticised attack last year on “predatory” capitalism and promise wide-ranging action.
He will detail the proposals in a speech to the Co-operative Bank, which is in exclusive talks with Lloyds Banking Group to buy more than 600 of its branches.
But he will say that he wants at least one other privately-run “challenger” bank to be given the chance to break into a market dominated by the five best-known names.
Other elements of the shake-up include a code of conduct with a power to permanently “strike off” errant bankers modelled on the British Medical Association and a specialist banking unit set up with the Serious Fraud Office.
Amid continued controversy over a potential multimillion-pound payoff for ex-Barclays boss Bob Diamond, he will also back EU proposals – opposed by Chancellor George Osborne – to set a maximum 1:1 ratio of bonus to pay.
And he will publish a report on Labour’s case for a British Investment Bank to help the business sector which was “having to compete with one hand tied behind its back” because of the lack of available credit.
“The revelations of the last two weeks has shown precisely what has gone wrong with our economy in the last decades,” he will declare before taking questions alongside shadow chancellor Ed Balls.
“And the test of whether we can change things now starts with our banks.
“Last September I said to the Labour Party conference that Britain needed a different kind of economy.
“An economy based not on the short-term, fast buck, take-what-you-can culture we see too much of in our banks today. But on long-termism, patient investment, and responsibility shared by all.
“Today I am going to tell you what a better banking system would look like. I will describe the first steps towards moving from the casino banking we have to the stewardship banking we need.
“It will mean root and branch change for our banks if we are to deliver real change for Britain, if we are to rebuild our economy so it works for working people, and if we are to restore trust in a sector of our economy worth billions of pounds and hundreds of thousands of jobs to our country.”
The new standards watchdog would be to tell someone they could “never again work for a bank in this country”, he will say – with the new crime unit ensuring “our country is no longer a soft touch for white collar crime.
“And we would tackle the bonus culture, including supporting the international action that the Government opposes, to bring rewards into line with performance.
“We would introduce far greater transparency in the way that banks serve all our communities and examine ways of creating new institutions, including a British Investment Bank, to help release the loans small businesses need to grow.”
