LONDON (Alliance News) - Ed Miliband, leader of the UK's opposition Labour party, Friday followed up his recent attack on the big energy companies in the UK by calling for a breakup of the country's biggest banks, saying they were still failing to serve the real economy and small businesses.
In a speech at a university, Miliband said Labour would break the power of HSBC Holdings PLC, Barclays PLC, Royal Bank of Scotland Group PLC, Spain's Santander and Lloyds Banking Group PLC by creating two new challenger banks from branches the big five would be forced to sell.
He directly compared the UK's banking system to the country's energy market, saying too much power lay in the hands of too few providers.
He said that if Labour wins the next election, scheduled for May next year, he would instruct the UK's competition authorities to report within six months on what limit should be imposed on a bank's market share and provide a timetable for a branch sale that would be completed by 2020.
His comments were widely flagged before the speech, and have already drawn apparent criticism from Bank of England Governor Mark Carney who said earlier this week that he didn't think a cap on the individual market share of a bank would substantially improve competition in the sector.
The Conservatives, the senior partners in the ruling coalition, said Labour's plans were all over the place and Labour, which had been in power when the financial crisis started, had caused many of the problems in the banking sector.
In the autumn, Labour had attacked the big energy companies, accusing them of profiteering at the expense of customers.
Lloyds Banking Group and Royal Bank of Scotland have already been forced to spin-off some branches by the EU, a condition of state bailouts they received from the Labour government during the financial crisis. However, both currently retain stakes in the new entities.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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Barclays (BARC)