LABOUR today publishes its plans to reform Britain's banking system, which, it says, will extend the claw-back on bankers' bonuses, increase competition and get more lending to businesses.
At a firm in Bedford, Ed Balls and his Shadow Treasury colleague Cathy Jamieson will launch the party's reforms paper, which will propose:
*extending the claw-back 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 £1m;
*creating a proper British Investment Bank to provide vital funding for small and medium-sized businesses thanks to an estimated £1bn from increased fees from the mobile phone spectrum;
*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 they will have to take up or lose their benefits;
*establishing at least two new challenger banks to boost competition on the High Street and
*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 Mr Balls.
"Banks are essential to our economy but we need them to work better for the businesses and working people who rely on them," added the Shadow Chancellor.
Ms Jamieson pointed out how bank lending to businesses had fallen year after year under the Coalition and that under Labour's plans more competition would be delivered.
"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," added the Shadow Financial Secretary to the Treasury.
But the Tories said Labour's banking reforms were "a recipe for chaos".
"A banking reform plan written by Ed Balls is like a fireworks safety guide written by Guy Fawkes; nobody will trust a word he says," claimed a party spokesman.
"Since 2010 we have been clearing up the mess left by Ed Balls and Ed Miliband. We've put the Bank of England back in charge of regulation, separated investment banks from people's ordinary savings in High Street banks and - to tackle the issues around bonuses - we've introduced the toughest system of claw-back and deferral of any financial centre in the world."
He added: "If we want a safer and stronger banking system, then we need to stick with this long-term economic plan; putting Ed Miliband and Ed Balls back into Downing Street would risk economic chaos and it's hardworking taxpayers who would pay the price."
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