The bankers may have finally met their match. Here is an ex-banker and member of the powerful Treasury Select Committee who wants four to five new banks created out of the high street giants. "The banks are too big. They are less competitive than 20 years ago and building up so much leverage again I fear we are heading for another crash. They are culpable and they must change their ways."
Andrea Leadsom says this angrily and quietly. The Conservative backbencher, one of the new intake of MPs, has spent days over the past six months on the select committee grilling top bankers over their role in the financial crash and whether their banks are competitive. If she was angry before the committee inquiry started, she's furious now.
"Bankers thought by giving up one year of bonuses, they could redeem themselves in the public's eyes. When Bob Diamond of Barclays told us in the committee the time for remorse was over, I thought: oh my God, he really is on another planet.
"I defy any of the banks like Barclays to claim that they didn't get any support from the taxpayer during the financial crash. It's absolute nonsense, and an outrage for them to say so. Just because Barclays didn't take a penny directly from the taxpayer, they think they can fob us off."
Harsh words. And all the more dangerous because Leadsom really can't be fobbed off as she understands the minutiae of banking; future rate contracts, interest-rate swaps and synthetic floating rates are as familiar to her as the corridors of Westminster have become.
Before being elected the first MP for South Northamptonshire last May, Leadsom worked in the City, first as a metals broker and then as an investment banker for more than 23 years. At Barclays, she was in charge of the financial institutions team and, when she was 32, became its youngest director. She's seen the City at its sharpest – trading zero coupon bonds designed to minimise tax well before Roger Jenkins made it state of the art – and most vulnerable. It was her job to hold together Barclays' clients during that fatal weekend when Barings went bust in 1995 and there were fears that the financial system would collapse.
"It still mystifies me to this day that Barings didn't know what was going on in its Singapore office – if they didn't know they were incompetent. It was certainly the end of any naive idealistic views I had of the City."
I catch her for a quick lunch in the House of Commons dining room as she takes a few minutes' break from one committee meeting before moving on to the chamber to present her 10-minute Rule Bill on Dangerous and Reckless Cycling. The 47-year-old is handsome with curly blond hair, a crackling smile and a handbag stuffed with secret papers.
Her frankness is refreshing. "I know what it feels like being hated – as politicians we are hated. I can assure you it's not a good feeling. But on a local level I have seen that I can make a difference to my constituents lives.
"The bankers also know they are still hated by the public so it's odd that they don't want to do more to rehabilitate themselves. There are many good bankers, many who do much for charity. But the problem is they are too concerned with the status quo. There isn't much soul food in the City."
Politicians may be hated but it's clear Leadsom adores every second in the House – a place she has dreamt of being since she was 13. "I remember being terrified during the three-day week, the strikes, the Cold War and the threat of the nuclear bomb. I listened to the news, heard my parents talk and thought then I wanted to get involved. My mother was Tory, my father socialist, so there were always lively arguments around the dinner table."
Her first dabble, aged 15, was to organise a debate at her grammar school on nuclear disarmament – she was for – so it was only natural that she went on to study political science at Warwick University. By then, her mother had won: Leadsom joined the Conservatives. "It was such a radical, left-wing university and we were a minority; hard but fun."
She took the political plunge while working for Invesco Perpetual, one of Britain's biggest retail fund managers, going through 23 selection processes to get her first nomination – for Harold Wilson's old seat, the safest Labour constituency in the country, which she lost in 2005. Last year, in her newly created Northamptonshire seat, she turned the notional majority of 11,000 into one of 20,000.
Bankers are not the only ones in her sights. She's taking on the home team's pet project – the HS2 high-speed train link between London and Birmingham which goes straight through her constituency. "What I can't abide is the woolly thinking around this project. HS2 is not a clever use of money, at any time and certainly not now. It's not an efficient project, won't save much journey time, won't bring the jobs locally everyone is talking about and is an outrageous use of taxpayers' money. What I am asking for is a level-headed debate, and not to be accused of Nimbyism – the only argument some MPs are capable of using."
It's no surprise that Lady Thatcher is a heroine but Iain Duncan Smith is a hero too for the work he is doing on welfare reform. Beating them both, though, is her mother, who raised her and four siblings through the hard times to later become a successful midwife, writer and charity worker. "When I was small we were very poor. My amazing mother worked so hard to bring us up, and her expectations for us were set at the highest."
Perhaps that's why Leadsom is so demanding of herself, and why she expects so much of her former industry. It's because they're so vital to economic growth, that the banks should be broken up, she argues, to create a vibrant competitive market. But, as she points out, the number of banks has actually halved to 22 over the past decade while the gross assets of the big high street banks have increased almost four times. Leadsom believes the Government has a once-in-a-lifetime chance to introduce competition by making four to five new banks from the various stakes owned by the taxpayer through UKFI – stakes in Royal Bank of Scotland, Lloyds, Northern Rock and Bradford & Bingley. She recently put the idea to the Chancellor, George Osborne, and didn't get a flea in the ear.
"It was a killer question and he didn't say it is impossible. Barriers to entry are still the biggest problems we face in the industry. Metro bank is the first new banking licence in 100 years. Isn't that extraordinary?"
It is. To help to break the grip of the big five on the high street, Leadsom says the Treasury should consider options such as splitting the small banking bits of RBS and Lloyds, maybe merging them, or even cutting RBS in two – with shareholders being compensated with shares in the new institutions.
She has high hopes for Sir John Vickers's Independent Commission on Banking, which publishes its interim report tomorrow. While she prefers "ring-fencing" to a total split between retail and investment banking, mainly because of the cost, she hopes the commission will be bold on competition.
Leadsom has published her own paper on reforming the banks – Boost Bank Competition – for the Centre for Policy Studies in which she argues for a new Financial Competition Commission to be set up inside the Financial Conduct Authority, the new City watchdog being created out of the Financial Services Authority. "Better regulation and higher capital ratios could mean that future crises will be less severe, but they cannot stop them. What is needed is a strong competition regulator that will consider the 'too big to fail' issue, barriers to entry and healthy competition. That way we can change the culture from complacency to one that accepts the need for competition and efficiency."
And we've got to improve lending to small businesses, she says. It's even more expensive today as the cost of capital is higher than for other lending, while loan spreads are 60 basis points higher than before the crash. "Access to capital for business is vital if the UK is to grow. But customers are still finding it hard to get loans, while interest rates are high even though interest rates are at a historic low."
Far more should be done to make other forms of finance more accessible, she says. County councils should be encouraged to set up new credit unions. ISAs could be used for venture and investment trusts to raise capital for small business, and financiers should be looking at creating modern versions of the old guild or livery companies for specific industry sectors. And more could be one to open up the Government's new Green Bank by allowing in new private investors, high street banks as well as foreign banks, thus giving it access to the wholesale markets.
"This would let us take the bank off the Government's balance sheet and permit it to borrow immediately. Green Bank could become a serious force for the new technology industries and small businesses but needs the private sector." Government funds never work. But why on earth shouldn't it take in new shareholders, like the German banks that have a history of investing in new and long-term projects? And more must be done to improve banking services for personal accounts.
"I sat through meeting after meeting with bankers like Diamond who all told us everything is fine, that public satisfaction is high and that services are good. But it's interesting the two women bank bosses – Jayne-Anne Gadhia of Virgin Money and Ana Botin of Santander – did both recognise that more can be done to improve. I only have to look at the letters I get from my constituents to know how badly some people are treated by the banks."