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Brown promises banking clean-up Brown promises banking clean-up
(about 5 hours later)
Gordon Brown has reiterated his call for a clean-up of the financial system to ensure what he called "banking responsibility" in the UK and abroad.Gordon Brown has reiterated his call for a clean-up of the financial system to ensure what he called "banking responsibility" in the UK and abroad.
In a speech to Labour activists in Bristol, the prime minister said banks had lost sight of basic moral values.In a speech to Labour activists in Bristol, the prime minister said banks had lost sight of basic moral values.
He also repeated his promise of legal action to recover pension pay-outs negotiated by bosses of failed banks.He also repeated his promise of legal action to recover pension pay-outs negotiated by bosses of failed banks.
But the Tories said Mr Brown "was part of the problem" because the banking crisis had happened on his watch.But the Tories said Mr Brown "was part of the problem" because the banking crisis had happened on his watch.
The British Banking Association insisted that the bulk of the industry was performing well.
'Ordinary values'
The prime minister told members of Labour's National Policy Forum that there had been "the biggest collapse in the banking system that the world had ever seen".The prime minister told members of Labour's National Policy Forum that there had been "the biggest collapse in the banking system that the world had ever seen".
We are exploring all the legal action necessary to recover pension payments from people who received too much Gordon Brown
He said: "Our task must be nothing less than to rebuild a financial system where it has failed, and then to create an economy in which banks are no longer serving themselves but are serving the public of this country."He said: "Our task must be nothing less than to rebuild a financial system where it has failed, and then to create an economy in which banks are no longer serving themselves but are serving the public of this country."
Mr Brown said that "somehow" the financial world had lost sight of ordinary people's values, such as fairness and hard work. Mr Brown said that "somehow" the financial world had lost sight of ordinary people's values, such as fairness and hard work. It would be wrong to condemn an entire industry because judgements made by some have been incorrect Angela KnightBritish Bankers Association
"Some came to believe that we should sacrifice the value of being fair to that of laissez-faire," he said."Some came to believe that we should sacrifice the value of being fair to that of laissez-faire," he said.
"Some acted as though free markets could be value-free markets.""Some acted as though free markets could be value-free markets."
He said that "nudging and deregulating" banks towards better behaviour had not worked.He said that "nudging and deregulating" banks towards better behaviour had not worked.
"You need fair rules, rules that reward those that play by them and punish those who don't.""You need fair rules, rules that reward those that play by them and punish those who don't."
The prime minister also promised to help reform global banking practices, calling for banks to come under "international supervision" and pledging "no hiding place" for banks and firms who sought to evade the law.The prime minister also promised to help reform global banking practices, calling for banks to come under "international supervision" and pledging "no hiding place" for banks and firms who sought to evade the law.
'Unacceptable practices' And he repeated his condemnation of bank chiefs like Royal Bank of Scotland (RBS) boss Sir Fred Goodwin, who despite being widely blamed for leading their organisations to disaster, then retired with huge taxpayer-funded pensions.
Mr Brown repeated his condemnation of bank chiefs like Royal Bank of Scotland (RBS) boss Sir Fred Goodwin, who despite being widely blamed for leading their organisations to disaster, then retired with huge taxpayer-funded pensions.
But he made no mention of Tory accusations that his City minister Lord Myners should have known about Sir Fred's pension terms last year when RBS was being rescued.But he made no mention of Tory accusations that his City minister Lord Myners should have known about Sir Fred's pension terms last year when RBS was being rescued.
He said: "Some of the practices now being discovered in our banks are not only unacceptable, they are indefensible and they have got to be cleaned up now.He said: "Some of the practices now being discovered in our banks are not only unacceptable, they are indefensible and they have got to be cleaned up now.
"We are exploring all the legal action necessary to recover pension payments from people who received too much.""We are exploring all the legal action necessary to recover pension payments from people who received too much."
But shadow chancellor George Osborne said no-one would believe what he termed Mr Brown's "synthetic outrage."But shadow chancellor George Osborne said no-one would believe what he termed Mr Brown's "synthetic outrage."
He said: "This all happened on Gordon Brown's watch as a result of his polices. That makes him part of the problem, not the solution."He said: "This all happened on Gordon Brown's watch as a result of his polices. That makes him part of the problem, not the solution."
Sir Fred Goodwin is the target of mounting government fury More mortgages
With a large proportion of Britain's banks now under the control of the government, Mr Brown outlined his vision for the UK's reformed banking system.With a large proportion of Britain's banks now under the control of the government, Mr Brown outlined his vision for the UK's reformed banking system.
He said to create the investment and jobs Britain needed "highly valued" mortgage banks, industry banks, small business banks and industrial banks. He said to create the investment and jobs Britain needed "highly valued" mortgage banks, industry banks, small business banks and industrial banks.Sir Fred Goodwin is the target of mounting government fury
He said Northern Rock would be a bank for home buyers and home owners and would this year and next year offer £14bn-worth of additional mortgages.He said Northern Rock would be a bank for home buyers and home owners and would this year and next year offer £14bn-worth of additional mortgages.
RBS-Natwest was to focus on small business banking and he said the government was looking at creating an industrial bank, to fund inventions and innovations.RBS-Natwest was to focus on small business banking and he said the government was looking at creating an industrial bank, to fund inventions and innovations.
He also confirmed that the government was thinking about creating a publicly-owned savings bank, using the post office network and funds from National Savings.He also confirmed that the government was thinking about creating a publicly-owned savings bank, using the post office network and funds from National Savings.
Angela Knight, chief executive of the British Bankers Association, said that while some banks had run into trouble, the "overwhelming majority" were performing well in "a very difficult environment".
"There have been some judgements that have been made which have proven to be wrong," she said. "But it would also be wrong to condemn an entire industry because judgements made by some have been incorrect."
Mrs Knight said Mr Brown appeared to want struggling banks to "play to their strengths" and return to what they were once good at.
But she added: "There is obviously a difficult and a different relationship that the government is going to have with some of those banks for whom there is a large stakeholding from the taxpayer."