Miliband to make case for bank shake-up
- 14 January 2014
- From the section UK Politics
I understand the Labour leader is preparing to unveil proposals designed to increase competition between banks by forcing the so-called "big five" - HSBC, Barclays, Royal Bank of Scotland, Santander and Lloyds - to sell more of their branches and promote the growth of new banks capable of challenging them.
Ed Miliband will make his plan public in a major speech on Friday which will argue that what the party calls a "living standards crisis" can only be addressed by making long term structural changes to the British economy.
Labour see this as a follow up to their proposal for an energy price freeze.
Party officials will not confirm the details of their banking package although one source told me they had been discussing the possibility of a cap on the market share which any retail bank can have drawing on a similar scheme in the United States.
In a separate development, the party will tomorrow call on Chancellor George Osborne to block Royal Bank of Scotland (RBS) from paying staff bonuses worth twice their salaries.
The Financial Times reports that RBS intends to ask its shareholders - in effect the British government - to approve bonuses set at twice the normal level permitted by a new EU law which limits bonuses to the same amount as annual salary in the previous year.
The paper reports all major European banks are expected to follow suit.
The shadow chief secretary, Chris Leslie, has tabled a Commons motion on Wednesday saying the government "as a majority shareholder should not approve any request to increase the cap".
He says that "at a time when families face a cost-of-living crisis, it cannot be right for George Osborne to approve a doubling of the bank bonus cap".
The chancellor is likely to call on RBS to exercise restraint as he has in the past.
The government has passed new laws to force regulators to produce greater competition in banking, acting on recommendations of the Parliamentary Commission on Banking Standards and the Vickers Commission.
Labour will use their proposals to claim that the prime minister "stands up for the wrong people" whilst they challenge the big five banks just as they challenged the big six energy companies
In a speech in July 2012, Ed Miliband said the banking industry had become "economically damaging and socially destructive" and set out his aim of increasing banking competition and forcing the "big five" banks to sell branches. He is expected to unveil the detail of this on Friday.