Labour will ring-fence high street banking from investment banking
The Labour leader Ed Miliband has accused the coalition of watering down the Vickers' recommendations and said in power he would break up casino banking.
The Labour leader Ed Miliband has accused the coalition of watering down the Vickers' recommendations and said in power he would break up casino banking in the City.
However, the Treasury has defended its actions and said all the recommendations in the Vickers’ report will be implemented by 2019. But the Leader of the Opposition said that if Labour wins the election in 2015, it would legislate and force the banks to make the changes as soon as possible.
“What I want is a country where a small business and an individual going into their High Street bank knows that that bank is working for them, not gambling with their money on the international markets. That doesn't happen at the moment,” the Labour leader said in an interview with the Observer yesterday.
"This is a very clear message I have for the banks: Either they sort it out themselves - so that once and for all the High Street bank is not an arm of the casino operation - or the next Labour government will, by law, split those banks up so that once again we return to the best traditions of British banking, which is banks that serve the customer,” he added after accusing the Government of “watering” down reforms.
This announcement is part of MIliband’s efforts to put some flesh on his ideas of “responsible capitalism”.
The Labour leader rejected arguments that putting too much pressure on the banks could lead them into leaving UK shores.
However, a Treasury spokesman said: "The government is undertaking radical reform of the UK banking system to ensure that the mistakes of the past aren't repeated, that the taxpayer is protected and that the banks support the UK economy."