Miliband sets out bank reform plans
Labour leader Ed Miliband has accused the Government of "failing to rise to the challenge of reforming our banks", as he set out a blueprint for change, including forcing the "big five" to sell up to 1,000 more branches to increase competition.
Mr Miliband pointed to the Libor rate-fixing scandal, the mis-selling of complex insurance products, the failure to lend to business and the "fleecing" of customers with payment protection insurance as proof that the banking industry has become "economically damaging and socially destructive".
And he called for institutional reform and cultural change to bring about a return to the "stewardship banking" of the past, after 20 years or more in which the banks have behaved like casinos.
Mr Miliband detailed his proposals in a speech to the Co-operative Bank, which is in exclusive talks with Lloyds Banking Group to buy more than 600 of its branches. And he said that he wants at least one other privately-run "challenger" bank to be given the chance to break into a market dominated by the five best-known names.
Other elements of the shake-up include a code of conduct with a power to permanently "strike off" errant bankers and a specialist banking unit set up with the Serious Fraud Office.
Amid continued controversy over a potential multimillion-pound payoff for ex-Barclays boss Bob Diamond, he also backed EU proposals - opposed by Chancellor George Osborne - to set a maximum 1:1 ratio of bonus to pay.
And he published a report on Labour's case for a British Investment Bank to help the business sector which was "having to compete with one hand tied behind its back" because of the lack of available credit.
Mr Miliband said it would not be right for resigned Barclays chief executive Bob Diamond to walk away with a multimillion-pound pay-off. "I think people wouldn't understand how somebody who has resigned over bad practice at his bank - to put it mildly - then walks away with a jackpot," he said during questions.
Conservative MP Matthew Hancock said: "Ed Miliband and Ed Balls had 13 years to reform the banks when they were at Gordon Brown's side, but failed. They even failed to implement their own banking competition review when they were at the Treasury - so the dominance of the big banks actually got worse under Labour."
Liberal Democrat Treasury spokesman Stephen Williams said: "The Liberal Democrats have called for banking reform for more than 10 years. While Labour knighted Fred the Shred, Vince Cable was calling for an end to casino banking. The coalition will have done more for a diverse banking sector in five years than Labour did in 13 years; we need not take any lessons from Ed Miliband on this."
Peter Vicary-Smith, chief executive of consumer organisation Which?, said: "Today's proposals sound very familiar - it's what we've been calling for over several years. In our Future of Banking Commission in 2010, we advocated a new professional standards body to oversee banking, firm action to promote competition, and structural change as called for in the Vickers report. The time has come for action not speeches."