openDemocracyUK

Balls sets out "three tests" on banking reform for Coalition

Shadow Chancellor Ed Balls has proposed "three tests" that the banking commission and Chancellor George Osborne "need to pass" in order to protect the UK from another financial crisis.
Niki Seth-Smith
10 April 2011

Shadow Chancellor Ed Balls has proposed "three tests" that the banking commission and Chancellor George Osborne "need to pass" in order to protect Britain from another financial crisis. 

In the blog post, published last night, Balls concedes that Labour should have seen the crash coming and been tougher in regulating the banks. 

Every government in the world got that wrong – and that’s why a fortnight ago I said sorry for the part I and the last Labour government played in that. When the City and the Tories called for lighter regulation, we should have ignored them and been tougher still.

The issue for the future, he says, is to make sure that this does not happen again. 

Balls sets out three tests that the Chancellor and the independent banking commission must pass in order to meet that challenge - on stability and consumer protection, international agreement to protect jobs in Britain and supporting long-term investment.

1. Structural reforms to protect customers and avoid bank bailouts.

That means tough accountability and transparency and clear, workable and robust firewalls. The devil will be in the detail of the commission’s final proposals but we must get this right.

And we need tough action to promote greater competition too, including making it easier for customers to move their main bank account. As few as three per cent of customers switch accounts each year, partly because it is so complicated. So I hope the commission will look at ways of making current accounts portable like mobile phone numbers in order to increase switching and so encourage competition.

2. International agreement on reforms to protect jobs dependent on financial services here in Britain.

Real banking reform cannot be accomplished alone in the UK. If George Osborne fails to secure international consensus and we see those jobs move abroad, whilst we nevertheless fail to tackle the international weaknesses that caused the crisis, he will be letting Britain down.

3. A banking system that supports investment to drive growth and jobs.

As Ed Miliband said at the British Chambers of Commerce this week we need to move from call centre banking to relationship banking and we need to ensure there is proper funding in place for businesses at every stage of their growth – from bank loans, to export finance, to equity. This was not an issue within the commission’s remit, but it is one George Osborne needs to urgently address if we are to get sustainable long term growth.

It's good to see that Balls is finally putting flesh on the bones of his approach to banking reform, but is he going far enough?

Stop the secrecy: Publish the NHS COVID data deals


To: Matt Hancock, Secretary of State for Health and Social Care

We’re calling on you to immediately release details of the secret NHS data deals struck with private companies, to deliver the NHS COVID-19 datastore.

We, the public, deserve to know exactly how our personal information has been traded in this ‘unprecedented’ deal with US tech giants like Google, and firms linked to Donald Trump (Palantir) and Vote Leave (Faculty AI).

The COVID-19 datastore will hold private, personal information about every single one of us who relies on the NHS. We don’t want our personal data falling into the wrong hands.

And we don’t want private companies – many with poor reputations for protecting privacy – using it for their own commercial purposes, or to undermine the NHS.

The datastore could be an important tool in tackling the pandemic. But for it to be a success, the public has to be able to trust it.

Today, we urgently call on you to publish all the data-sharing agreements, data-impact assessments, and details of how the private companies stand to profit from their involvement.

The NHS is a precious public institution. Any involvement from private companies should be open to public scrutiny and debate. We need more transparency during this pandemic – not less.


By adding my name to this campaign, I authorise openDemocracy and Foxglove to keep me updated about their important work.

Who is bankrolling Britain's democracy? Which groups shape the stories we see in the press; which voices are silenced, and why? Sign up here to find out.

Comments

We encourage anyone to comment, please consult the oD commenting guidelines if you have any questions.
Audio available Bookmark Check Language Close Comments Download Facebook Link Email Newsletter Newsletter Play Print Share Twitter Youtube Search Instagram WhatsApp yourData