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Labour wants £1bn FCA forex fines to go to NHS

Shadow Chancellor Ed Balls is calling on the Treasury to invest £1bn worth of FCA fines relating to foreign exchange manipulation into the National Health Service.

Since last year FCA fines have gone to the Treasury, less the regulator’s enforcement costs. The Government has previously given some of the Libor fines to military charities.

Earlier this month, the FCA handed out its largest ever fines totalling £1.1bn over forex rigging. Citibank was fined £226m, HSBC was fined £216m, JP Morgan £222m, Royal Bank of Scotland £217m and UBS £234m.

Balls says Chancellor George Osborne should use the Autumn Statement to pour the fine money into the NHS.

He says: “The fines levied on banks for foreign exchange manipulation should now be used for a wider good.

“And I believe an immediate boost to our NHS, which is going backwards under the Tories, must be a priority.

“Under David Cameron it’s getting harder to see a GP, A&E is in crisis and waiting lists are going up again. £3bn has been wasted on a top-down re-organisation while nurses and frontline staff have been lost. And cancer treatment targets have now been missed for three quarters in a row.”

Labour leader Ed Miliband has promised higher taxes on tobacco companies, hedge funds and homes worth more than £2m to pay for a £2bn injection into the NHS.


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. I actually don’t disagree with this. It has always been a bit opaque as to where the money from these fines end up. The Treasury no doubt – so in effect they are less like fines and more like tax.

  2. This may sound somewhat naive but shouldn’t fine revenue be used to reduce the burden for the good guys and provide a compensation fund for the wronged?

    The way it is it seems that the financial services industry is being taxed twice or three times without any representation whatsoever. We all know what happened at the Boston Tea Party.

  3. Stinks of populous political point scoring… but at the same time I’m with Harry Katz, I’ve always wondered where these massive fines end up!

    Would be good to see them being put into good rather than buying more flowers for the FCA’s Canary Warf offices or their lavish Christmas parties

  4. Here here David, surely those who have effectively lost their money due to fraudulent behavior of the banks should be recompensed as with interest rate rigging and PPI.

  5. E L Wisty (an only twin) 24th November 2014 at 4:12 pm

    In my opinion, the FCA would be conflicted from benefitting. However, by using the money to relieve the regulatory burden on other firms, thus creating a good behaviour dividend.

    To suggest that the money should go to a non-hypothecated recipient is dubious at best (on what grounds should the NHS benefit in favour of other equally worthy causes?) and shabby politics at worst.

    This is the sort of low pre-electioneering idea that we have come to expect from Labour, and not surprisingly it’s all Balls.

  6. This is an incredibly dangerous path to follow. It doesn’t take much for such a stance to become a custom and then we have all sorts of contingent issues.

    Personally i would like Ed Balls to have suggested this for the fines the MPs had to pay. It would at least have potentially had the air of sincerity and contrition rather than ego and poliitics

  7. These politicians do get paid to run the country, come up with intelligent proposals other than just the first idea that comes into their head of where to spend it. They don’t do anything else, this is their full time job, it’s pretty poor this is the most sophisticated idea they can come up with.

  8. As a steer, fines generally, whatever industry, should have a policy of what those monies are used for. This is just a goverNance issue. What ever industry it may be in, we do not want a situation where by there is an expectation the predicted fines will pay for a certain public service. With so many policy and regulatory duties delegated across industries, those who set them and collect them are not subject to the electorate.

    Equally we would not want a Minister to end up targeting an income derived from fines such as local councils have done with traffic fines. They build it into their budget and when income reduces through better behaviour they get pedantic in order to get the same revenue.

    With so much disbursed to quangos don’t we want a more sensible principle on how fines generally are used and spent?

  9. I mean prior to the big banking fines (the regulator seemed to be the only one that didn’t see a problem with the UK having 19% of global debt in the early naughties) I was suspicious of the high fines being dished out for misdemeanors. I remember £1m for a building society for a laptop lost but which did not contain the relevant information for an unscrupulous criminal. We learned later that the worst culprits are the DWP, HMRC and FSA as they were then. If the big banking feast of fines dries up where will they go for the same feast. Those banking fines are fine by me for the sheer lack of oversight by the companies and their criminality. Where are these fines going? Who benefits? and are they paying for things that require future fines at the same level?

  10. Do members of the investing public not realise that this indirect taxation of their money is going on?

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