Miliband pledges new force to lead financial crackdown

Ed Miliband will promise to reform the culture of the big banks; Ed Balls accused the SFO of being 'tardy' (Getty Images)

Ed Miliband will promise today to create a team of specialists in the Serious Fraud Office whose sole job will be to hunt down perpetrators of market rigging and similar types of financial crime.

The pledge will be included in a speech by the Labour leader on ways in which the Government can influence the culture of those working in the big banks, and bring back old fashioned ideas about serving customers.

Mr Miliband is expected to say: "We would set up a new financial crime unit at the Serious Fraud Office so that our country is no longer a soft touch for white-collar crime."

His comments are aimed at addressing public anger over the way that bankers who rig interest rates appear to get away with it, because the Financial Services Authority has no power to prosecute, when others who commit offences involving far smaller sums are brought to justice.

Labour politicians say the SFO has the power, but not the capacity, to go after bankers who rig the system.

The shadow Chancellor, Ed Balls, emphasised yesterday that rigging the Libor rate was a criminal offence, and "always was". He accused the Government and the SFO of being "very, very tardy" in going after the culprits.

He told the BBC's Andrew Marr programme: "It's not the regulator's job to enforce the criminal law. That's the job of the Serious Fraud Office. And the reason why people are so angry is they think when people avoid their taxes or cheat on benefits they get sentences in jail; but when bankers do massive multi-million or billion-pound frauds, there aren't criminal prosecutions."

The shadow Home Secretary, Yvette Cooper, added that the fraud office needs more state backing to do its job.

"What the Government should be doing is giving the Serious Fraud Office some of the money, for example, from this huge fine that Barclays had to pay, to make sure there is a proper investigation and people actually face charges," she said.

In his speech, Mr Miliband will also stress the importance of increasing competition between the high-street banks. Lloyds has already been told to sell 650 of its premises in the wake of its takeover of the Halifax Bank of Scotland.

The Labour leader will promise that a Labour government will go further, so that instead of high-street trade being dominated by five banks, there will be seven. He also wants a new code of conduct for banks, which would be supervised by an organisation similar to the British Medical Association.

The Business Secretary, Vince Cable, said moves were already under way to make the banks more customer-friendly.

"I want to see more competition. It's a good idea and it's happening. We are creating a more competitive banking system," he said.