Ed Miliband has threatened to forcibly break up big banks if voted into power, but faces signs of unrest from the unions that brought him Labour leadership.
Mr Miliband, speaking at the start of the Labour Party conference in Manchester, set out his stall as a champion of the consumer in the face of big business – and said he would forcibly separate investment and retail banking operation if the banks didn’t do enough to separate themselves.
The Labour Party will use its conference to unveil a number of policies aimed at protecting consumers. One policy announced so far is the replacement of Ofgem with a new energy regulator with tougher powers.
Speaking about the banks, Mr Miliband (pictured, left) said: “Either they can do it themselves – which frankly is not what has happened over the past year – or the next Labour government will, by law, break up retail and investment banks.
“The banks and the Government can change direction and say that they are going to implement the spirit and principle of Vickers to the full. That means the hard ring-fence between retail and investment banking.
“We need real separation, real culture change. Or we will legislate. If they don’t do it voluntarily, embrace the change Britain needs, then we are going to have to do it by law.”
The strong position on banks follows a pro-youth message delivered by Mr Miliband yesterday at the East Manchester academy. In the speech he hinted that a Labour government would go further than its current pledge to cut student fees by a third.
Read Gary Gibbon's blog on Ed Miliband's "need for change".
However, Miliband was criticised ahead of the conference by the unions over the party’s backing of a public sector pay freeze.
Len McCluskey, general secretary of Labour’s largest union donor, Unite, said: “I am deeply disappointed because they have got it wrong.
“They have found themselves trapped as they try to demonstrate to the media and the chattering classes that they have intellectual credibility in their economic thinking.”
Paul Kenny, general secretary of the GMB union, also criticised Labour, and shadow chancellor Ed Balls in particular. Speaking to the BBC, Mr Kenny said: “Ed Balls, he would give an aspirin a headache, wouldn’t he?
“Being truthful about it, he comes here and he’s not really in touch with the argument. He really needs to get closer to what’s happening on the ground.”