UK Politics

Jeremy Corbyn tells banks not to treat people as 'cash cows'

Jeremy Corbyn Image copyright EPA

Jeremy Corbyn has warned banks not to treat people as "cash cows", as he called for reform of the industry.

Big banks must "serve the economy not just themselves", the Labour leader told the British Chambers of Commerce.

He also set out his vision for a "new economics", including borrowing to invest in infrastructure and skills.

He said Labour and business should be "natural allies", but warned that firms would need to "put more back into the economy" if it was in power.

Labour has been accused of being anti-business and lacking economic credibility - both under previous leader Ed Miliband's stewardship and now under Mr Corbyn.

Mr Corbyn was addressing the annual conference of the British Chambers of Commerce for the first time as Leader of the Opposition.

He used his speech to accuse the banking sector of letting down small businesses and consumers and said the banks "drove the economy to the point of collapse" in 2007 and 2008.

'Built on sand'

The Labour said the political consensus at the time was for "light touch" banking regulation "and sit back and collect the tax revenues".

"But you cannot base a decent social policy on an unsustainable economic policy and we cannot outsource economic policy to the City of London," he said, adding: "That has not served our economy well, and it has not served businesses well."

"The banking sector has to be reformed. Finance must support the economy, not be an extractive industry treating consumers, entrepreneurs and businesses as cash cows," he argued.

Mr Corbyn said a "new ecology of finance" was needed, with more support for credit unions and small businesses.

He called for a national investment bank to target investment "on key public and economic priorities, not just for very quick returns", and "we need to reform the major banks so that they serve the economy not just themselves".

'Put more back'

Mr Corbyn also attacked the economic approach pursued by the government, saying the UK economy was "built on sand".

Labour wanted to "break with the failed economic orthodoxy" that had "gripped policy makers for a generation", and prioritise investment.

"We will borrow to invest over a business cycle. We will put public investment in science, technology and green industries of the future front and centre stage," he said.

Setting out his vision, he added: "Only an economy that is run for wealth creators - the technicians, entrepreneurs, designers, shopfloor workers, and the self-employed - and puts in them in the driving seat is going to deliver prosperity for all."

He acknowledged businesses "may not like everything we say" but when it came to "big decisions on the economy, infrastructure, skills and investment, we are actually natural allies because Labour is committed to what is needed for business to expand and succeed".

But he added: "We expect businesses to put more back into the economy but we will do more to give the economy a stronger future."

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