Ed Miliband: Labour would break up high street banks within a year of winning power

 

Political Editor

High street banks judged to have too great a share of the market will be forced to start selling off branches within 12 months if Labour wins next year’s general election.

Ed Miliband will announce on Friday that the Competition and Markets Authority would set a threshold for the share any bank can have of the personal accounts and small business lending market.

In a major speech in London on the economy, the Labour leader will say: “We need a reckoning with our banking system, not for retribution, but for reform… This is not about whether we should have new banks - that is the question this Government is still asking - but about how.”

He will tell small and medium sized businesses: “Under a Labour government, you will no longer be serving the banks. Instead, the banks will be serving you.”

Mr Miliband will announce that the competition authority would report within six months of the election on how many branches the big banks might have to sell off, a process that would start within the following six months. If the maximum threshold were breached, it would automatically trigger a new investigation by the competition authority and there would be a ban on any merger or takeover that would exceed the cap.

The three key tests for the shake-up would be to: improve the price and quantity of lending to small businesses, improve service to all customers and create at least two new challenger banks with significant market shares.

Mr Miliband will brush aside a warning by Mark Carney, the Governor of the Bank of England, that a market share cap would not substantially improve competition. Describing the banking market as “broken,” he will say: “There can be no bigger test of whether we are serious about building a new economy and tackling the cost-of-living crisis than reforming Britain’s banks.”

The Labour leader will insist that the “cost of living crisis” is still the biggest challenge facing politicians at the election. He will argue that if, as expected, wages rise faster than prices this year, the crisis will remain.

“If the Government thinks a few months of better statistics will solve this crisis, it is just demonstrating again that they have absolutely no idea about the scale of the problem or the solutions required,” he will say.

Mr Miliband will say: “The Government’s economic policy is not the solution to the cost of living crisis. It’s part of the problem. In a global race to the bottom - low wages, low skills - not the race to the top Britain needs to tackle the cost-of-living crisis and compete with other countries around the world.”

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Latest stories from i100
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

Savvy Media Ltd: Media Sales executive - Crawley

£25k + commission + benefits: Savvy Media Ltd: Find a job you love and never h...

Austen Lloyd: Corporate Solicitor NQ+ Oxford

Excellent Salary: Austen Lloyd: CORPORATE - Corporate Solicitor NQ+ An excelle...

Reach Volunteering: Financial Trustee and Company Secretary

Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible