Welby: jury is still out on banking reform

The archbishop – who sat on the parliamentary banking standards commission which drew up proposals to reform the industry – told Jon Snow of the resistance to plans to ringfence retail banking to protect it from the activities of more risky investment banking:

“There is a lot of push-back coming on that, and a lot of difficulty in analysis of how you do that, and I think the jury’s still out whether we’re going to get there.”

But he warned of work still to do to change the potential impact of any future financial crisis on the economy:

“Even if the push-back does not win, we have not dealt with the ‘too big to fail’ or ‘too big to manage’, and there’s a danger of not dealing with ‘too big to rescue’.”

‘Massive struggle’ on inequality

Archbishop Welby was keen to emphasise his belief that growth in the UK economy was a good thing. But he said the challenge was to ensure that the benefits flowing from that growth were evenly spread:

“Part of the problem we’re facing is that where there are inequities, people don’t really know how to deal with them. Politicians can’t say that, but the reality is that a lot of people don’t know the answer.

“I don’t think we’ve found the answer, and you look across Europe or north America – Detroit would be a very good example – and it’s clear it’s not for lack of effort, it’s perhaps for lack of understanding of how to change things.”

Speaking of his experiences in Liverpool and the north of England, where he was previously bishop of Durham, Archbishop Welby said it was a “massive struggle” to overcome generational deprivation.

Payday lenders

Having caused a stir in July by pledging to put payday lender Wonga out of business by expanding credit unions, Archbishop Welby said he had been surprised by the wave of support for the idea.

He admitted that far from being a careful strategy, the pledge was “something of an accident”. Despite that, he said: “We are getting a huge amount of offers of help, as are the credit union sector generally.”

However, he said that making payday lenders’ work illegal overnight, when there was nothing to take their place, would just drive people into the arms of illegal loan sharks who are “much, much worse”, adding: “We need to recreate community finance, and that’s a 10-15 year process.”

Buddhist king?

On Wednesday Archbishop Welby presided over the christening of third in line to the throne, Prince George. But what if the prince, destined one day to be monarch and head of the Church of England, wanted instead to become a Buddhist?

“He’s perfectly entitled to be that and we’ll cross that bridge if we ever get to it, who knows?” said the archbishop.

The row between opposition leader Ed Miliband and the Daily Mail newspaper, over an article describing his father as “the man who hated Britain”, raised issues of public responsibility. Describing the coverage as “out of order” and “the wrong thing to do”, Archbishop Welby warned against what he termed a “bully pulpit”.

“A number of us… have the capacity to make comments, or structure interviews, or preach from a pulpit… We have to be very cautious about the use of that responsibility.”