Labour’s bank reform plans, including bonus clawback and a British Investment Bank
Remember this? Labour wants to claw back unwarranted bonuses.
Labour is today (Friday) publishing its plans to reform the banking sector so that it better supports growing businesses, economic growth and rising living standards.
Ed Balls MP, Labour’s Shadow Chancellor, and Cathy Jamieson, Labour’s Shadow Financial Secretary to the Treasury, will publish Labour’s banking reform paper after a visit to a business in Bedford.
The banking reform paper is part of Labour’s economic plan and sets out a series of measures the next Labour government will take, including:
· Extending clawback of bank bonuses that have already been paid in cases of inappropriate behaviour to at least 10 years and enacting legislation, passed by the last Labour government, to require banks to publish the number of employees earning more than £1 million.
· Creating a proper British Investment Bank to provide vital funding for small and medium-sized businesses. All funds raised from the planned increase in the licence fees for the mobile phone spectrum – estimated to be up to £1 billion in the next Parliament, subject to Ofcom consultation – will be allocated to the British Investment Bank.
· Introducing a one-off tax on bankers’ bonuses to help pay for Labour’s Compulsory Jobs Guarantee – a paid starter job for all young people out of work for 12 months or more, which people will have to take up or lose their benefits.
· Addressing the lack of competition in the sector. We welcome the Competition and Markets Authority inquiry which we called for and want to see at least two new challenger banks and a market share test to ensure the market stays competitive for the long term.
· Extending the levy on the profits of payday lenders to raise funding for alternative credit providers.
“Too often in recent years our banks have fallen far short of the standards expected of them. After so many scandals we need major reforms and long-term cultural change to restore trust and ensure our banks start working for consumers and businesses again,” said shadow chancellor Ed Balls.
“Banks are essential to our economy, but we need them to work better for the businesses and working people who rely on them.
“We need much more action than this government has been prepared to take. So Labour’s banking reform paper sets out how we will change rules on bonuses, increase competition and get more lending to small and medium-sized businesses.
“We will extend to at least ten years the period bank bonuses can be clawed back in cases of misconduct. As we have seen in recent days, wrong doing can take years to uncover. The current proposals to claw back bonuses are too weak and do not cover a long enough period of time. We will ensure people involved in misbehaviour and misconduct would have to give back their bonuses for at least a decade after they have been paid out.
“And we will establish a proper British Investment Bank to help growing businesses get the funding they need to expand and create jobs. Because it’s only when working people and businesses succeed that Britain succeeds too.”
Cathy Jamieson, shadow financial secretary to the Treasury, added: “Bank lending to businesses has fallen year after year under this government. This just isn’t good enough. Without access to finance, SMEs cannot grow and create the high quality, well paid jobs we need to increase living standards. That’s why our plans will deliver more competition in our banking sector and a proper British Investment Bank too.
“We will also change the rules around bonuses and our tax on bankers’ bonuses will help fund a jobs programme for young people in every part of our country.
“We need our banks to better serve the economy and our reforms will ensure that they do.”
This has just been announced; what do readers think?
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It doesn’t address the problem of our money supply being owned and controlled by the private banking sector. It doesn’t stop the banks earning interest on money they’ve just made up when they ‘loan’ it, which would be a big help. It doesn’t recognise that we’re the descendants of the peasantry who were forced from their self-sufficient livelihoods on the Commons so they (and in turn, we) could be exploited and make any attempt to restore our self-sufficiency. Mind you, with a name like Labour, what would you expect?
It’s better than anything else on offer, though, isn’t it?
Hum disnt we once have that bank the trustys saving bank
TSB – Trustee Savings Bank. Recently re-privatised and there are adverts for it all over the place.
About time too! Well done Labour for having the guts to challenge the Banks.
Take a job or lose their benefits…. Just what? Workfare under another name.
I like the idea of a BiB, as long as it is done along the lines of the Canadian soveriegn wealth fund.
See my response to BookmanWales.
Can you point the rest of us to a good source of information about this Canadian scheme?
It’s a step in the right direction.
The Money Creation and Society Debate that Positive Money set up had MP’s from all parties debating what Bill mentioned. It was interesting that the Tories backbenchers mentioned that the bankers caused the economic crisis and they need some sort of reform. As soon as the City Minister banker suckup joined, she appeared to whip them back in line.