Vickers “was asked the wrong question”

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date: 9 September 2011

embargo: 00:01 hours Sunday 11 September

TUC General Secretary Brendan Barberwill tell the opening day of the TUC Congress, which meets in London tomorrow (Monday), that while the Vickers recommendations should be defended against attacks by the banks, the limited remit of the review means that it cannot deal with the challenge of making the finance sector serve the real economy.

In a speech to the Congress Brendan Barber will say: 'The Vickers team have been asked how to make the banks safe, but the real question is how we make them useful.

'Tougher capital requirements and ring-fencing will be bitterly opposed by the banks, who will now lobby hard to water them down. They should be resisted.

'But while we need to avoid another finance-driven crash, safer banking on its own will not help drive the investment and create the jobs we need. Indeed, unless we take other action tougher capital controls could even limit credit at a time when businesses complain they cannot get affordable loans.

'Real reform of banking would start with setting out what we need our banks to do. Banking should be a utility just like energy and water - supplying credit and the other services that our productive industries and services need.

'The spectre of a double dip is raising its head. We desperately need an economic stimulus. Unless we move to a low-carbon economy, we face climate chaos. The real challenge therefore is how to raise investment - not just by companies but in infrastructure and the public works that can provide jobs, restore confidence and kick start growth.

'And while the political classes seem rather embarrassed and can't wait to get rid of them, the public has big stakes in two major banks. It's time we put them to work on behalf of the public.

'So let's talk about a proper Green Investment Bank set free from Treasury restriction. Other countries have them, so why shouldn't we set up a national investment bank with the long-term horizons that can meet the investment gap? What about regional banks who don't have remote head offices to say no?

'I regularly meet business people who are as critical of our short-termist speculation driven banks as we are. Let us say today that we should campaign together for a banking system that works for us, rather than one that has everybody working for the banks.'

NOTES TO EDITORS:

- All TUC press releases can be found at www.tuc.org.uk

- Congress 2011 will be held at the TUC's Congress House in central London this year. The event runs over three days from Monday 12 to Wednesday 14 September. The deadline for free media accreditation has now passed. Media passes may still be processed but may to be subject to delay. ALL applications for media passes now cost £50. You can apply online by visiting www.tuc.org.uk/the_tuc/tuc-19831-f0.cfm Wi-fi will be available free of charge throughout Congress House during the conference.

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk

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