Shadow Treasury economic secretary Cathy Jamieson says ethics in financial services is high on the party’s agenda as it gathers in Manchester for its autumn conference.
Speaking at a Smith Institute fringe event on financial services yesterday, Jamieson says the party is revisiting a proposals to impose a fiduciary duty on firms towards their customers.
A fiduciary duty places a legal obligation to act for another’s benefit.
In April shadow Treasury financial secretary Chris Leslie and Jamieson proposed an amendment to the Financial Services bill to impose the duty where appropriate.
Jamieson said: “We are beginning to talk again about the issue of fiduciary duties. Who has the responsibility? What is the reponsibility of the financial services sector to protect consumers and those putting their money in, rather than simply making the most profit in the shortest period of time? It is the whole issue of sustainability and looking over the long-term.”
Jamieson said the issue of ethics in financial services is high on Labour’s agenda and a fiduciary duty is a way of rebuilding trust and confidence in the sector.
She said: “People think their high street services, whether it is banks or insurance services or anything else, have somehow lost touch with their needs. The banks forgot that it was people’s money they were gambling with.
“For insurance firms people believe that many of those companies, not all, forgot that their primary purpose was to offer the consumer some protection and support in difficult times rather than simply making a profit. One of the issues we have to discuss is the ethics of financial services. What are the banks and financial services sector there to provide?”
She also said that Labour would offer the industry a chance to “sort out its problems” but then be ready to respond with legislation.
Yesterday, Labour leader Ed MIliband gave an ultimatum to the banking sector to implement the banking reforms in full or face the prospect of a total separation of their retail and investment arms under a future Labour Government.