The global financial crisis of 2008 and since has revealed serious imbalances in our financial services. With the coalition government prioritising a cut in the top rate of tax and failing to tackle bankers’ bonuses and stimulate lending to business, it is clear that the Conservatives have not learned the lessons.
Under the Conservatives, we have experienced the slowest recovery for over 100 years. Britain has suffered downgrades from ratings agencies Fitch and Moody’s – humiliating for George Osborne given that the 2010 Conservative manifesto said “safeguarding Britain’s credit rating” was the first benchmark test against which they should be judged.
A key position to emerge from the debate on these matters in recent years has been to draw attention to the distinction between the high street function of the banks dealing with their current account and small business customers and the ‘casino’ gambling trading arms – where huge risks were taken by people receiving massive rewards irrespective of success, ultimately risking the destruction not only of those banks but possibly of the entire financial system.
That distinction has merit but it should not be forgotten how the ‘high street’ function has behaved. As your MP, I raised the issue of bank overcharging years before the credit crunch. In fact, I was warning about the banks’ incorrect practices as early as 2000. Read my speech in Hansard.
Not enough was done about this issue by the then Labour Government. And there is a danger now, with the focus from the Coalition upon a much delayed separation of the ‘high street’ versus ‘casino traders’ issue, that the well established practice of overcharging in mainstream banking services will be again overlooked.
We need innovative, effective, ethical financial services creating jobs and serving the country. We do not need greedy exploitative operations operating at high risk without concern for the consequences. That has to apply to the bread and butter ‘high street’ services as well as everything else.