Wednesday 15 January 2014

How to go about rebanking the UK

Never in the field of human politics has one political speech been leaked so often by so few. Or so you might think about Ed Miliband’s economics speech, due for delivery on Friday.

Yesterday, it was about the middle classes – which just happened to coincide with the publication of my new improved, updated and ‘affordable’ book Broke: How to Survive the Middle Class Crisis.

Today, it was competition in the banking sector where they flagged the idea of a market cap, an important idea – if it can get over the horror of that kind of thing in the Treasury.

It is hugely important that Miliband has committed to building the diversity of UK banking, but there are two problems with this:

First, his colleague Ed Balls has been opposed to this agenda practically since the womb, so it would be strange if he had suddenly undergone some kind of Pauline conversion.  The fear is that it will be read as a piece of Labour positioning, part of an internal power struggle, rather than a serious contribution to policy.

Second, there are other ways of achieving the same objective.  A market cap would be vulnerable to legal challenge and it would be fought through the courts by the big banks.  There are European dimensions to the whole thing.

If this was the centrepiece of Labour’s strategy, there would need to be something else in reserve – if we are going to see real diversity in the local banking market in the UK, as other countries have, and to their huge economic benefit.

It so happens that, with the help of the Joseph Rowntree Reform Trust, I was working with Lib Dems in the Lords to develop implementable approaches to creating a new local banking infrastructure in the UK.

It is far-reaching and, what’s more, it can be done – and relatively quickly.  You can read the results here, published today.

The irony is that the Lib Dems were the only party to commit to baking diversity in their 2010 manifesto.  It would be ironic if they were outflanked on their own issue by Miliband.

But I don’t think they will be.  The commitment to diversity by the Lib Dems is far deeper than it is in Labour.  In any case, coalition or no coalition, it will require at least two parties to push through anything remotely like this.

1 comment:

Rob Parsons said...

Re your penultimate paragraph, I missed the LibDem commitment to baking diversity, but it's a thoroughly LibDem policy that ought to be in our 2015 manifesto. Baking is going the way of all activities, the province of largely male chefs and celebrity programmes. The Great British Bake Off is destroying some of our national treasures, and it behoves us as LibDems to promote and celebrate participation in top level baking by women, minorities and regional people with a programme of positive encouragement to them all to break through the creme brulée ceiling and reach the top levels in the baking industry. I salute your efforts to bring this national issue to our attention.