Britain's opposition leader Miliband warns Labour will break up banks

PUBLISHED : Monday, 01 October, 2012, 12:00am
UPDATED : Monday, 01 October, 2012, 4:43am


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Britain's opposition Labour leader Ed Miliband has vowed to break up the country's biggest banks if his party wins power at the next general election.

Miliband, whose party enjoys a 10-point lead in the latest polls, told The Observer he would split the banks' "casino" investment operations from their high street branches.

"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 warned.

Speaking ahead of the party's annual conference, which opened in Manchester yesterday, Miliband urged banks to focus less on "playing the international money markets" and more on lending to small businesses.

A government report led by John Vickers advocated a ring-fence between banks' operations, but Bank of England chief Mervyn King warned last month that bank lobbying had "watered down" proposed reforms.

"The banks and the government can change direction and say they are going to implement the spirit and principle of Vickers to the full," said Miliband.

"That means the hard ring-fence between retail and investment banking. We need real separation, real culture change, or we will legislate."

Miliband also outlined his support for young people, giving his backing for the voting age to be brought down to 16.