Miliband wants ‘challenger’ banks to shake up the high street
Ed Miliband is expected to propose forcing retail banks to give up hundreds of their high street premises to new 'challengers' in a speech tomorrow.
The Labour leader will argue that setting up new banks could reduce bank charges and offer customers extra choice, the Mail on Sunday newspaper reported.
His speech is also expected to include an argument in favour of the establishment of a body like the British Medical Association which could ban bankers for life who are found guilty of malpractice.
Miliband will also reportedly back more transparency for the financial services sector and an increase in the resources available to the Serious Fraud Office, which shadow chancellor Ed Balls has criticised for its "tardy" response to the Libor scandal.
"You can use lots of fancy, schmantzy words but the fundamental point is the economy hasn't been working for most working people but for a few at the top," Miliband told the Mail on Sunday in an interview.
"It wasn't just true under the Tories, it was true under the Labour government towards the end as well."
He said that being a banker used to a "term of endearment" and a "compliment", but it had now become an "insult".
The Labour leader described his response to the banking scandal as "courageous" – a word viewed with alarm by small-c conservative political strategists.
Offering a bold response to the Libor scandal could capture the public mood in the same way that he did in the wake of the phone-hacking scandal last year, however.
Miliband said he was "learning the lessons of where New Labour went wrong with the really super-rich", but denied that he would ever raise the top rate of income tax about 50%.
His speech tomorrow is likely to pick up on personal examples of people who feel let down by the business sector.
In today's interview he highlighted the case of Alan Henderson, who runs a signage company in Putney, who was sold a 'dual interest rate swap' and lost £1 million as a result.
"Interest rates went down and he lost hundreds of thousands of pounds," Miliband explained.
"Some of the millions paid to people like Bob Diamond is from the Hendersons. They were diddled. The issue is how do we restore trust in banking for people like that?"
Public appetite for reform of the banking sector extends well beyond Britain's shores, according to an international poll by Ipsos Mori released today.
Its 24-country study, carried out in February, found that 37% of respondents around the world think there has been too little regulation of bankers, compared to 24% who say it has too much.
Feeling runs highest in Britain, however, where 68% say there is too little regulation. That compares to 65% in France and 59% in Germany.
Over half of global consumers said 'operating transparently' was one of the most important issues for the financial service industry to address.
In Britain and the US the number one issue was 'responsible lending practices', however.