Ed M sets out bank plan
Ed Miliband has outlined Labour's plans for "stewardship" banking in the City of London and a revamped high street.
Mr Miliband called for the creation of two "challenger" banks to shake up the industry, a British Medical Association-style "code of conduct" for bankers and a special banking unit at the Serious Fraud Office.
He pointed to the Libor rate-fixing scandal as vindication of his attack last year on "predatory" capitalism, and said it highlighted the need move past the "economically damaging and socially destructive" casino banking system in the City.
"The rules of our economy were too frequently based on the idea that if Government got out of the way and we followed the path of deregulation, we would create an economy that worked for working people," he said. "In too many ways and for too many people it hasn’t worked."
The Labour leader set out plans to break the dominance of the five main high street banks, forcing them to sell off "hundreds of branches" and creating of two new "challenger banks" to offer more competition.
"There isn’t proper competition in our banking system," he said. "Companies that think consumers have no choice are more likely to behave in predatory ways."
"If we want a productive financial centre we should break up our big banks. We need to take excessive power away from the banks, so they serve the interests of the consumer once again."
The Labour leader re-iterated his calls when he spoke to BBC Radio 4 today after the speech.
He said: "Let’s go further, let’s go faster. I don’t think the British people want to wait, I don’t think they want excuses about why we can’t act, I think they want action across a whole number of fronts from bonuses, to the full implementation of the Vickers Commission."
But Vince Cable this morning described Labour's plans as "uncontroversial", and argued the Government is already implementing much of what Labour is calling for.
He told Sky News: "We know that there’s a lot more has to be done, and a key part of it – as Mr Miliband’s been saying – is getting in more competition. Now, as it happens, over the last year you are now getting more challenger banks – you know, Lloyds have sold off branches to the Co-op, Nationwide are getting into business lending, you’ve now got the Metro bank, Virgin Money, and we want to encourage more banks."