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Labour's plan to fix broken banking system

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Today Ed Miliband revealed Labour’s plan to fix our banking system so that it works for people and businesses.

Residents often tell me how the cost of living crisis is making it increasingly difficult for them to make ends meet. Our local businesses are also struggling to access the finance they need to grow and create jobs. As a small business owner myself I know how frustrating this can be. 

The Tory-led Government has failed to solve this crisis and to make the long-term changes needed to build a new economy that works for everyone and not just a few at the top. They think low wages, low skills and insecure work is the way to take Britain forward in the hope that some of the wealth will trickle down from the top. David Cameron continues to defend business as usual, demonstrating how out of touch he is with millions of families struggling with rising living costs.

Labour has set out firm plans to help people struggling with the cost of living, such as our pledge to freeze energy bills until 2017. This will make a big difference to families and businesses in Stockton South. But we also need to address the symptoms of our current economic state.

To deal with the cost of living crisis and to compete with other countries we need to build a new economy that works for everyone. That means dealing with Britain’s broken banking system which only works for the banks and not struggling businesses and families. 

Just four banks control 85% of small business lending. This lack of competition has led to poor service, a breakdown of trust and a massive drop of £56bn in lending to business since May 2010. Part of the reason we rely too much on low paid, insecure work is that the small firms cannot get the finance they need to create good, high paying jobs. Having run a small business forum for several years I am only too familiar with the difficulties SMEs have with accessing finance.

We need to support small and medium sized businesses so that they can grow themselves and our economy and that means promoting a wider range of banks that have to compete harder with each other for customers.

That’s why Ed announced today that the next Labour Government will introduce a cap on market share so that no bank can get too big and that the market remains competitive. We will improve the amount of lending to small businesses, improve the service to all customers and create new banks that will work for the communities they serve.

With a Labour Government, small businesses in Stockton will have a better chance of getting the support they need to grow, employ more people at decent wages and help Britain earn its way to better living standards for everyone.

You can read the transcript of Ed’s speech here.

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