Labour conference: Miliband threat to break up banks

 

Ed Miliband: "Either they sort it out for themselves... or Labour will, by law, split those banks up"

Labour leader Ed Miliband has said that if banks do not separate their retail and investment arms, a future Labour government will "break them up".

There needs to be a return to the "best traditions of British banking", Mr Miliband said, where "banks serve the customer" not international markets.

Recommended ring-fencing of retail from investment banking had been watered down by the government, he said.

The Treasury said it was "undertaking radical reform" of the banking system.

The Vickers report into banking, launched in the wake of the financial crisis, last year recommended banks split into two parts to separate the High Street side from the riskier investment side and cut their reliance on borrowed money.

The coalition has already said that all of Sir John Vickers' recommendations will be implemented by 2019.

But if Labour won the 2015 general election and major changes were not in place by then, it would legislate, the Labour leader said.

'Casino operation'

As the party meets for its conference in Manchester, Mr Miliband told BBC1's Andrew Marr Show: "What I want is a country where a small business and an individual going into their High Street bank knows that that bank is working for them, not gambling with their money on the international markets. That doesn't happen at the moment.

"What really worries me is that we're seeing, and we've seen over the last year, a watering down of some of the reforms that the government was talking about to try and make that happen.

"This is a very clear message I have for the banks: Either they sort it out themselves - so that once and for all the High Street bank is not an arm of the casino operation - or the next Labour government will, by law, split those banks up so that once again we return to the best traditions of British banking, which is banks that serve the customer."

Recent scandals over Libor interest rate-rigging and payment protection insurance mis-selling had reinforced the case for change to happen, Mr Miliband said.

The Labour leader said the government's economic strategy had failed and borrowing was increasing. He advocated raising £2bn by taxing banker's bonuses to fund jobs for young people and housing.

The Labour Party conference slogan is "Rebuilding Britain".

He said: "You need a different approach.

"Yes there would be cuts if we were in government, but if you make the pace of those cuts slower, if you take less money out of the economy now it will be better for our economy, better for growth, better for people up and down the country and better for getting the deficit down sustainably."

If Labour were in government now, Mr Miliband said, the first budget change it would make would be keeping the 50p rate of income tax, which is due to be cut to 45p for those earning over £150,000 from April 2013.

"This government is cutting taxes for millionaires by £40,000 a year," he said.

A Treasury spokesman said: "The government is undertaking radical reform of the UK banking system to ensure that the mistakes of the past aren't repeated, that the taxpayer is protected and that the banks support the UK economy."

Start Quote

Since the onset of the global financial crisis, banks and banking regulation have changed completely”

End Quote British Bankers' Association

The British Bankers' Association (BBA) said: "Since the onset of the global financial crisis, banks and banking regulation have changed completely.

"The UK's major banks have committed publicly to further change - to do whatever is necessary to restore financial stability, to play their part in economic recovery and to earn back the trust of their customers."

The BBA said it was currently working with the government and regulators to implement ring-fencing.

On Saturday Mr Miliband told a panel of voters in Manchester that the country faced an "economic emergency".

Among policies he has revealed so far are the replacement of Ofgem with an energy regulator which has tougher powers to ensure prices are fair and a cap on pension fund management fees.

He also signalled that Labour was looking seriously at replacing student fees with a graduate tax and wanted to go still further than the party's existing pledge to reduce them to a maximum of £6,000 from the present £9,000.

 

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  • rate this
    +3

    Comment number 1415.

    1411. howee

    Carry on blaming bankers if it makes you feel better but we all borrowed too much now it's payback time.
    +++
    I DID'N AND I DON'T SEE WHY I SHOULD BAIL OUT INCOMPETENT (AT BEST) BANKERS.

  • rate this
    +1

    Comment number 1414.

    1411. howee
    >>>... we all borrowed too much now it's payback time. Or put you head in the sand and blame the bankers.

    "We have abolished Boom and Bust" - Gordon Brown
    "Your endowment mortgage will pay off your house" - lots of banks.

    We are not finance experts, those saying these things and offering these deals WERE. If an expert electrician tells you your sockets are safe, do you question it?

  • rate this
    +2

    Comment number 1413.

    1401. Food parcels, families in fuel poverty, attacks on workers, pensioners, students, the NHS, etc...
    ...and that's after only two years with the Tories (given half an inch - in this toxic coalition)!

    I guess tax breaks for the super-cich and writing off billions in tax owed by huge multi-nationals doesn't come cheap.

  • rate this
    +1

    Comment number 1412.

    Many of us are calling for a "none of the above" option on the ballot papers. If GB government wants a more interested and involved public (although I suspect they don't), then let us tell them through the ballot box. The BBC certainly won't be our mouthpiece. Scrap the lot.

  • rate this
    -1

    Comment number 1411.

    When are folk going to take responsibility for their own actions. The banks stopped lending in 2008 that gave "us" a problem we borrowed from next weeks to pay this now it's payback time. Carry on blaming bankers if it makes you feel better but we all borrowed too much now it's payback time. Or put you head in the sand and blame the bankers.

  • rate this
    +1

    Comment number 1410.

    1395.mr_market
    53 Minutes ago
    Ed said ...
    Dave said ...
    Nick said ...

    Who cares what they say. They are all at the behest of the financial industry

    ==
    And the brewers lobby and the Monsanto lobby etc etc. Yes, who cares what they say? Because when it comes to deeds by which we really judge, they're all pretty useless.

  • rate this
    +3

    Comment number 1409.

    552. Dr-G
    >>>Just wish there was a specific 'none-of-the above' option on ballot slips, rather than spoiling.

    Agree. The coalition has done the square root of not much to reform our financial system and Mr Ed, a member of the government that exercised almost no regulation of the sharp practices that exacerbated the crisis is going to play hard ball with the banks? They must all think us stupid.

  • rate this
    +3

    Comment number 1408.

    1405.mr_market: Banks aren't businesses. No business I know gets massive bonuses whey they win, and when they fail


    I don't know. Our water supplier failed to secure supplies (for which it charged 3% increase over inflation: 8% this year!) and hasn't met its leakage repair targets - and board members awarded themselves £177,000 bonuses this year. What will Milipede do about that?

  • rate this
    +4

    Comment number 1407.

    My wife and daughter went shopping in Oxford Street, W1 today. They've taken a Keynesian approach: spend your way out of recession. Expect the next set of UK economic data to show a significant upturn in the retail sector.

  • rate this
    +2

    Comment number 1406.

    It looks as if Labour may be willing to support a graduate tax again. How out of touch and anti-aspiration can these people get?

  • rate this
    0

    Comment number 1405.

    Name Number 6

    Banks aren't businesses. No business I know gets massive bonuses whey they win, and when they fail.

    Real business men will stay, make a quick buck ones we don't need.

  • rate this
    +2

    Comment number 1404.

    Flip flop flip flop flip flop every 4 years.We never learn,just vote for the other guy promising to take the pain away that the current guy is inflicting upon us.The care not for us,never have,never will. We are considered plebs and useless eaters to them.Yes they care about us, but in principle and not practice.No tears, no guilt, no consequence.

  • rate this
    -1

    Comment number 1403.

    1399. The truth

    That's why he'll stop at nothing until he's driven every last bank - nay every last businessman - out of the UK
    +++
    What a good idea.

  • rate this
    +2

    Comment number 1402.

    You are all deluded if you think your vote counts for anything.

    Divide an conquer.

  • rate this
    -4

    Comment number 1401.

    Labour conference: Miliband threat ...

    BBC got that right - he's a 'threat' all right - threat to

    British children on food parcels
    British working families in fuel poverty
    All British students and workers - particularly NEETS
    British pensioners
    All British citizens using NHS and NHS dentists if they can find a surgery that is not packed with immigrants

  • rate this
    +2

    Comment number 1400.

    1386.news_monitor

    We currently have a govt. contolled by the financial sector who are responsible for the mess that the world is in. Remember it was ordinary people who bailed out the banks whose attitude remains unchanged with regard to their arrogance & greed. Never forget that bankers
    are nothing more than parasites whose only wealth creation is what goes into their back pockets.

  • rate this
    0

    Comment number 1399.

    One only has to look at Millibean's face to see the snarling visage of socialism.

    He hates success and ambition, because Labour thrives on indolence & failure. That's why he'll stop at nothing until he's driven every last bank - nay every last businessman - out of the UK

  • rate this
    0

    Comment number 1398.

    Err get elected first.

    Or at least get enough seats so you can do a deal with the LibDems, or UKIP.

    UKIP won't want much, just a Referendum. The LibDems will ask fro all sorts, but don't worry about that too much.

  • rate this
    0

    Comment number 1397.

    There is a distinct mis understanding from the labour party in economics.ed balls solution are distictly scratching the surface as useless as the parties in power.


    If this guy was serious he would

    Resign.
    Restructure the civil service
    Restructure the whole tax system
    stop bashing the elderley and disabled
    Get out of Europe
    Make civil servant criminally liable diectly to the public.

  • rate this
    -1

    Comment number 1396.

    1392. news_monitor
    Ed Miliband said ...the party's link with the unions ...puts Labour in touch with working people across the country.
    Pardon? Did I read that right?
    ///////
    Nope, you interpreted that wrong. Since most (all?) people who are in a union work, he is right in saying that keeping a link with unions keeps people in touch with working people.

 

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