New Miliband agenda to focus on banking reform
Leader of the Labour Party, Ed Miliband, will focus on significant banking reform and not just the effects of an increasing cost of living in a new agenda.
In a speech to be given on Friday, Mr Miliband will announce plans to control the size of banks and increase competition between banks.
Today, Mr Miliband laid the foundations for his plans by demanding the government cap bonuses at the state-owned Royal Bank of Scotland.
The plans are designed to highlight how Labour would start the implementation of long-term economic reforms rather than merely attempt to soften the effects of deteriorating living standards.
Mr Miliband wants to show he will take on the big five banks as he did with the big six energy firms.
Regional banking is a further key element of Mr Miliband’s plans to rebalance the economy and encourage growth outside of the South-East.
Mr Miliband is under significant pressure after his party’s lead over the Conservatives fell this week.
Labour has not given a specific figure at which they would cap the size of banks, however, a suggestion of 25% of market share has been dismissed as wide of the mark.
It is alleged that Labour would restrict the number of retail branches owned by the big five banks and force them to sell to new entrants to the market.
The shadow treasury secretary, Chris Leslie, speaking on BBC Radio 4’s Today programme, said: “It is part of the old economic construct that we have this high-rolling bonus culture. We have got to move to a sustainable professional stable form of banking if we are going to earn our way out of this cost-of-living hole we are in…”
According to the Treasury, no proposals have actually been put forward to by RBS to pay significant bonuses this year.
The chancellor today confirmed he does not believe RBS should be able to pay bonuses at twice that permitted by the EU while the rest of the country is suffering.
Labour has faced repeated accusations that it was too close to the banking sector whilst in government and Ed Balls, the shadow chancellor, has admitted he failed to regulate the sector effectively.
The government has vowed to break up UK banks if they breach new rules requiring them to separate risky investments from high street banking. Measures to increase competition, such as making it easier for customers to switch bank accounts, have also been introduced.