Labour conference: Miliband threatens to tear apart the banks
Ed Miliband concentrated his fire on the banks rather than the Conservatives on the opening day of the Labour party conference in Manchester, with a threat to split them apart if he made it to Downing Street.
In a conference which is being treated as a make-or-break moment for the Labour leader to show who he is to the country, Miliband will pledge to implement the John Vickers banking reform proposals in full, even though they have reportedly been 'watered down' by the coalition.
"Either they can do it themselves – which frankly is not what has happened over the past year – or the next Labour government will, by law, break up retail and investment banks," he told the Observer.
"The banks and the government can change direction and say they are going to implement the spirit and principle of Vickers to the full. That means the hard ringfence between retail and investment banking. We need real separation, real culture change. Or we will legislate."
Last month Mervyn King, governor of the Bank of England, raised concerns the Vickers report was being watered down after lobbying from banks.
The ringfencing of retail and investment banking will only apply to their UK operations, despite their vast overseas activities. Furthermore, Vickers plans for banks to hold higher grade assets in their reserves to prevent a future collapse have been written off after banks said they would be forced to pass the £1.3 billion cost onto customers.
Legislation for the Vickers reforms is set to be on the statute book by 2015, although it will not come into effect until 2019.