Clegg: Unregulated banks ‘biggest mistake in history’

By Aled Thomas

Gordon Brown’s mistake in allowing banks to be unregulated is the “biggest in modern British history”, Nick Clegg has said.

The Liberal Democrat leader made the claim while announcing his party’s plans for banking regulation.

Speaking alongside Treasury spokesman Vince Cable, Mr Clegg said: “Gordon Brown says he made a ‘mistake’ in not holding the banks to account. Well if it was a mistake, it was the biggest mistake in modern British history.”

The two party leaders set out their policies on financial sector, including breaking up the banks so there is a separation between “high-risk investment banking, and low-risk retail banking”.

Mr Clegg said: “The casino culture of investment banking mustn’t be allowed to hold a gun to the head of ordinary people’s everyday savings.”

The party will also push for remutualisation of Northern Rock and more mutual lending institutions, regional stock exchanges, and local investment funds in a bid to get the main banks lending again.

Dr Cable said: “The banks have been bailed out by the public, but they are hoarding money in order to boost their balance sheets. They’re not serving their purpose of lending money and getting their economy going.”

As well as condemning Labour for not regulating the banks Mr Clegg criticised the Conservatives for being unwilling to do anything about the way they run themselves.

He added: “No wonder the Conservatives are now the party of choice for bankers.”

With many media heavy-hitters in the room, reflecting the party’s new status in the polls, Mr Clegg batted away repeated questions on what deals he would be prepared to make with either of the other main parties and whether his tax policy was non-negotiable.

He said: “Tax reform, and banking reform are two of our main priorities and we will fight for them however we can.”