Ed Miliband sets out bank reform plans

 

Labour leader Ed Miliband today accused the Government of “failing to rise to the challenge of reforming our banks”, as he set out a blueprint for change, including forcing the “big five” to sell up to 1,000 more branches to increase competition.

Mr Miliband pointed to the Libor rate-fixing scandal, the mis-selling of complex insurance products, the failure to lend to business and the "fleecing" of customers with payment protection insurance as proof that the banking industry has become "economically damaging and socially destructive".

And he called for institutional reform and cultural change to bring about a return to the "stewardship banking" of the past, after 20 years or more in which the banks have behaved like casinos.

Mr Miliband detailed his 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.

And he said 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 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 also backed EU proposals - opposed by Chancellor George Osborne - to set a maximum 1:1 ratio of bonus to pay.

And he published 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.

"Nobody can really believe that the current way of running things is in the interests of British business. The revelations of the last two weeks have shown precisely what has gone wrong in our economy in the last decades," declared Mr Miliband.

"The rules of our economy were too frequently based on the idea that if government got out of the way and we followed the path of deregulation, we would create an economy that worked for all working people.

"In too many ways and in too many places, it hasn't worked. And the test for all of us is whether we can learn that lesson. And that starts with our banks."

Mr Miliband admitted that Labour had failed to be tough enough in regulating the banks while in power.

But he added: "The difference between us and the Tories is this: We have learned the lessons.

"The Conservative-led Government won't bring the change we need. They have failed to rise to the challenge of reforming our banks again and again.

"Watering down the separation between high-street banking and casino banking. Going slow on new competition in banking. George Osborne heading to Europe this week to argue against action on bonuses.

"Refusing a bank bonus tax. And a judge-led inquiry. Once again showing they are out of touch with where the public are.

"And most of all, they can't be the people who deliver tougher regulation because light-touch regulation is what they believe in their bones."

Mr Miliband said the banking scandal had vindicated his warnings at last September's Labour conference about "predatory" capitalism.

"Last September I said to the Labour Party conference that Britain needed a different kind of economy," he said.

"An economy based not on the short-term, fast buck, take-what-you-can. But on long-termism, patient investment, and responsibility shared by all.

"Not an economy based on predatory behaviour, but productive behaviour. Not an economy that works just for a powerful, privileged few, but an economy that works for all working people."

Today, he said his proposals would pave the way "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," said Mr Miliband

The new standards watchdog would be able to tell someone they could "never again work for a bank in this country", he said - 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," he added.

"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."

PA

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Club legend Paul Scholes is scared United could disappear into 'the wilderness'
football
Life and Style
food + drink
News
video
Sport
Malky Mackay salutes the Cardiff fans after the 3-1 defeat at Liverpool on Sunday
footballFormer Cardiff boss accused of sending homophobic, racist and messages
Arts and Entertainment
Martin Amis: Taken to task over rash decisions and ill-judged statements
booksThe Zone of Interest just doesn't work, says James Runcie
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Commercial IT Solicitor - London

Very Competitive Salary: Austen Lloyd: Commercial IT Solicitor - London We h...

Business Analyst / Project Manager - Financial Services

£40000 - £45000 per annum + BONUS + BENEFITS: Harrington Starr: One of the mos...

Lead Business Analyst - Banking - London - £585

£525 - £585 per day: Orgtel: Lead Business Analyst - Investment Banking - Lond...

Service Desk Analyst- Desktop Support, Helpdesk, ITIL

£20000 - £27000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home