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Ed Miliband urges bank branch sell-off | Ed Miliband urges bank branch sell-off |
(about 9 hours later) | |
Ed Miliband is to say the "big five" banks must give up "significant" numbers of branches in an effort to make the industry more competitive. | Ed Miliband is to say the "big five" banks must give up "significant" numbers of branches in an effort to make the industry more competitive. |
The Labour leader will argue financial services have been "an incredibly poor servant of the real economy", citing a drop in lending to businesses. | The Labour leader will argue financial services have been "an incredibly poor servant of the real economy", citing a drop in lending to businesses. |
In a speech, he will promise to create at least two "challenger" banks. | In a speech, he will promise to create at least two "challenger" banks. |
But the Conservatives said Labour's policies were "all over the place" and the party had "no credible plan". | But the Conservatives said Labour's policies were "all over the place" and the party had "no credible plan". |
The "big five" banks - HSBC, Barclays, RBS, Santander and Lloyds - account for the majority of bank customers and lending. | The "big five" banks - HSBC, Barclays, RBS, Santander and Lloyds - account for the majority of bank customers and lending. |
In his speech at the University of London, Mr Miliband will say a Labour government would instruct the Competition and Markets Authority to report within six months of the May 2015 general election what the limit on a bank's market share should be and the timetable for any sell-off of branches, which should be completed by 2020. | |
'Reckoning' | 'Reckoning' |
He will say: "Of course, financial services are an important industry in itself. But for an industry that calls itself a 'service', it has been an incredibly poor servant of the real economy, not just since 2010 - or 2008 - but for decades in this country. | He will say: "Of course, financial services are an important industry in itself. But for an industry that calls itself a 'service', it has been an incredibly poor servant of the real economy, not just since 2010 - or 2008 - but for decades in this country. |
"We need a reckoning with our banking system, not for retribution, but for reform." | "We need a reckoning with our banking system, not for retribution, but for reform." |
Mr Miliband will say: "If we carry on as we are, we will end up stuck with the same old banks dominating our high street: the old economy. | Mr Miliband will say: "If we carry on as we are, we will end up stuck with the same old banks dominating our high street: the old economy. |
"In America, by law, they have a test so that no bank can get too big and dominate the market. We will follow the same principle for Britain and establish for the first time a threshold for the market share any one bank can have of personal accounts and small-business lending." | "In America, by law, they have a test so that no bank can get too big and dominate the market. We will follow the same principle for Britain and establish for the first time a threshold for the market share any one bank can have of personal accounts and small-business lending." |
Labour would also introduce a new National Credit Register for small and medium-sized businesses, to increase competition and improve lending to small business by allowing all banks access to comprehensive data on their credit histories. | Labour would also introduce a new National Credit Register for small and medium-sized businesses, to increase competition and improve lending to small business by allowing all banks access to comprehensive data on their credit histories. |
Bank of England Governor Mark Carney said earlier this week that he supported the view that a cap on banks' market share "would not result in substantial improvement to competition". | Bank of England Governor Mark Carney said earlier this week that he supported the view that a cap on banks' market share "would not result in substantial improvement to competition". |
'Labour's recession' | 'Labour's recession' |
He told the Commons Treasury Committee: "Just breaking up an institution doesn't necessarily create or enable a more intensive competitive structure." | He told the Commons Treasury Committee: "Just breaking up an institution doesn't necessarily create or enable a more intensive competitive structure." |
But Mr Miliband will say: "This is not about whether we should have new banks - that is the question this government is still asking - but about how... | But Mr Miliband will say: "This is not about whether we should have new banks - that is the question this government is still asking - but about how... |
"It is not about creating new banks that control some tiny proportion of the market, but new banks that have a substantial proportion and can compete properly with existing banks. | "It is not about creating new banks that control some tiny proportion of the market, but new banks that have a substantial proportion and can compete properly with existing banks. |
"And we are not asking whether existing banks might have to divest themselves of a significant number of branches. We are asking how we make that happen. | "And we are not asking whether existing banks might have to divest themselves of a significant number of branches. We are asking how we make that happen. |
"After decades of banking becoming more and more concentrated, Labour will turn the tide." | "After decades of banking becoming more and more concentrated, Labour will turn the tide." |
For the Conservatives, Treasury minister Sajid Javid said people in the UK had been "made poorer by the worst recession in a century - a recession caused by the Labour government that Ed Miliband was at the heart of. So Ed Miliband is complaining that his own mess isn't being cleaned up fast enough." | For the Conservatives, Treasury minister Sajid Javid said people in the UK had been "made poorer by the worst recession in a century - a recession caused by the Labour government that Ed Miliband was at the heart of. So Ed Miliband is complaining that his own mess isn't being cleaned up fast enough." |
He added that the Labour leader was "all over the place" and had "no credible economic plan". | He added that the Labour leader was "all over the place" and had "no credible economic plan". |
But Business Secretary Vince Cable said he agreed with Mr Miliband, adding: "We do need more competition. We've been very badly served in the past." | |
Speaking on BBC Two's Newsnight he said: "Many of the things he's calling for have actually happened. | Speaking on BBC Two's Newsnight he said: "Many of the things he's calling for have actually happened. |
"What his proposals don't clearly indicate is exactly what kind of bank is he trying to create?" | "What his proposals don't clearly indicate is exactly what kind of bank is he trying to create?" |