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Ed Miliband calls for high street banks to sell branches Ed Miliband calls for high street banks to sell branches
(40 minutes later)
Ed Miliband has attempted to grab the initiative over bank reform from the government, outlining a package of policies including forcing the "big five" to sell up to 1,000 more branches to increase competition.Ed Miliband has attempted to grab the initiative over bank reform from the government, outlining a package of policies including forcing the "big five" to sell up to 1,000 more branches to increase competition.
The Labour leader accused David Cameron and George Osborne of failing to rise to the challenge presented by the scandal over Barclays's manipulation of the Libor rates in a wide-ranging speech in east London.The Labour leader accused David Cameron and George Osborne of failing to rise to the challenge presented by the scandal over Barclays's manipulation of the Libor rates in a wide-ranging speech in east London.
He called for at least one other privately run "challenger" bank to be given the chance to break into a market dominated by the five high street names.He called for at least one other privately run "challenger" bank to be given the chance to break into a market dominated by the five high street names.
Miliband pointed to the Libor rate-fixing scandal, 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 had become "economically damaging and socially destructive".Miliband pointed to the Libor rate-fixing scandal, 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 had become "economically damaging and socially destructive".
The proposals and his analysis were put forward in a speech in London at the Tower Hill headquarters of the Co-operative Bank, which is in talks with Lloyds Banking Group to buy more than 600 of its branches.The proposals and his analysis were put forward in a speech in London at the Tower Hill headquarters of the Co-operative Bank, which is in talks with Lloyds Banking Group to buy more than 600 of its branches.
Other elements of the proposed shakeup include a code of conduct with the power to permanently "strike off" errant bankers and a specialist banking unit set up with the Serious Fraud Office.Other elements of the proposed shakeup include a code of conduct with the 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, Miliband also backed EU proposals – opposed by Osborne – to set a maximum 1:1 ratio of bonus to pay. Amid continued controversy over a potential multimillion-pound payoff for the former Barclays boss Bob Diamond, Miliband also backed EU proposals – opposed by Osborne – to set a maximum 1:1 ratio of bonus to pay.
At the same time, Labour published a report calling 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.At the same time, Labour published a report calling 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.
"Nobody can really believe that the current way of running things is in the interests of British business. The revelations of the last two weeks have shown precisely what has gone wrong in our economy in the last decades," said Miliband."Nobody can really believe that the current way of running things is in the interests of British business. The revelations of the last two weeks have shown precisely what has gone wrong in our economy in the last decades," said Miliband.
"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 all working people."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 all working people.
"In too many ways and in too many places, it hasn't worked and the test for all of us is whether we can learn that lesson. And that starts with our banks," he said."In too many ways and in too many places, it hasn't worked and the test for all of us is whether we can learn that lesson. And that starts with our banks," he said.
Miliband admitted Labour had failed to be tough enough in regulating the banks while in power. Miliband admitted Labour had failed to be tough enough in regulating the banks while in power.
"The difference between us and the Tories is this: we have learned the lessons. The Conservative-led government won't bring the change we need. They have failed to rise to the challenge of reforming our banks again and again."The difference between us and the Tories is this: we have learned the lessons. The Conservative-led government won't bring the change we need. They have failed to rise to the challenge of reforming our banks again and again.
"Watering down the separation between high-street banking and casino banking. Going slow on new competition in banking. George Osborne heading to Europe this week to argue against action on bonuses. Refusing a bank bonus tax. And a judge-led inquiry. Once again showing they are out of touch with where the public are," he said."Watering down the separation between high-street banking and casino banking. Going slow on new competition in banking. George Osborne heading to Europe this week to argue against action on bonuses. Refusing a bank bonus tax. And a judge-led inquiry. Once again showing they are out of touch with where the public are," he said.
Miliband said the banking scandal had vindicated his warnings at last September's Labour conference about "predatory" capitalism.Miliband said the banking scandal had vindicated his warnings at last September's Labour conference about "predatory" capitalism.
"Last September I said to the Labour party conference that Britain needed a different kind of economy," he said. "Not an economy based on predatory behaviour, but productive behaviour. Not an economy that works just for a powerful, privileged few, but an economy that works for all working people.""Last September I said to the Labour party conference that Britain needed a different kind of economy," he said. "Not an economy based on predatory behaviour, but productive behaviour. Not an economy that works just for a powerful, privileged few, but an economy that works for all working people."
On Monday, he said his proposals would pave the way "from the casino banking we have to the stewardship banking we need".On Monday, he said his proposals would pave the way "from the casino banking we have to the stewardship banking we need".
"It will mean root and branch change for our banks if we are to deliver real change for Britain," said Miliband. The new standards watchdog should be able to tell someone they could "never again work for a bank in this country", he said, with the new crime unit ensuring "our country is no longer a soft touch for white-collar crime"."It will mean root and branch change for our banks if we are to deliver real change for Britain," said Miliband. The new standards watchdog should be able to tell someone they could "never again work for a bank in this country", he said, with the new crime unit ensuring "our country is no longer a soft touch for white-collar crime".
"We would tackle the bonus culture, including supporting the international action that the government opposes, to bring rewards into line with performance," he added."We would tackle the bonus culture, including supporting the international action that the government opposes, to bring rewards into line with performance," he added.