Bankers under fire at Labour conference
Labour delegates are not holding back in attacking the bankers at the party’s first autumn conference in opposition for 14 years.
Uncertainty about the party’s future direction following the election of Ed Miliband as the party’s leader is constraining senior figures in the party from speaking out.
But frustration at the role of the City manifested itself at fringe events today as business secretary Pat McFadden attacked bankers in his keynote speech to the conference floor.
“We have been through an era when first, finance dominated. Then, finance collapsed,” he said.
“And we never again want the country to be held to ransom by the banking system.
“The huge rewards at the top of banking are totally out of line with anyone’s sense of fairness or worth. That’s why Labour acted to introduce the levy on bankers’ bonuses.”
He quickly moved on to address issues relating to the economic recovery, however, emphasising the need to get banks lending again.
Other figures were less tactful. George Mudie, an MP on the Commons’ influential Treasury select committee, said he was angered by the “stupidity and lack of remorse from the banks” over their bonuses.
“A lot of ordinary people are losing their jobs, losing their houses and have a lower standard of living because of the irresponsible giddy acts of bankers,” he told a fringe event hosted by the centre-right thinktank Policy Exchange.
“They don’t even have a sense of how it’s affecting people to actually do anything about salaries and remuneration.
“I think it’s bad… it’s just unacceptable. I find they’re just on a different planet.”
Mr Mudie said he was prepared to look favourably on Liberal Democrat proposals from the general election favouring a straightforward split between banks’ retail and investment arms as a result.
Labour’s shadow business secretary did not comment on the proposed banking split now being considered by a coalition government-initiated review, instead focusing on what he suggested were more practical concerns.
“The real test in politics isn’t a rhetorical auction of who can bash the banks most,” Mr McFadden added.
“The real test – the issue that matters – is how to get banks lending again to good businesses so that we get the growth and jobs that Britain needs in the future.”
Steve Matthews of RBS, which provides finance for one million small and medium sized businesses, told an event hosted by the British Chambers of Commerce that banks were prepared to lend to “viable businesses,” a point picked up on by Peter Box, Labour’s leader of Wakefield council.
“The truth is that many businesses aren’t viable when they set out,” he said, pointing out they need the initial capital to become viable.
Mr Matthews acknowledged that a problem existed in reply.
“I’m not going to sit here and say there aren’t some businesses out there who aren’t saying they haven’t had a raw deal,” he conceded.
Mr Matthews pointed out all banks had to “reassess their risk dimensions” and said RBS approved 85% of requests for finance from businesses, however.
Mr Mudie’s solution, speaking at the Policy Exchange event, was to ensure banking compliance on bonuses and other issues through greater oversight.
“Where there is not regulation and where there is not supervision, I’ve always found in public life if you don’t regulate the private sector funny things happen,” he said.
