In a press conference this morning Liberal Democrat leader Nick Clegg, who is enjoying a huge surge in the polls, said: “At the heart of our plans for economic change is a simple insight: we need to devolve and disperse economic power, particularly in the banking sector.
“We will create a totally different financial system; a completely different ecology of banking. And for the banks: fundamental change. We will break them up and break them down.”
The LibDem’s are still riding high in the polls with the latest Guardian/ICM poll putting them on 30 per cent, three per cent behind the Conservative Party on 33 per cent and two per cent ahead of Labour on 28 per cent. It is the first time Labour has been beaten into third place since the Guardian/ICM poll began in 1984.
The LibDem banking levy would supplement corporation tax but would be payable on 10 per cent of all the year’s profits without the deduction of previous year’s losses.
The party, which has taken the lead in some polls this week, also set out plans to set new, non-negotiable lending targets for both Lloyds Banking Group and RBS. It warns that if these targets are not met, bank chiefs will be dismissed.
Clegg also set out plans to remutualise Northern Rock and will split the Post Office from a newly trust-based Royal Mail. It will also mandate a new mutual bill and create a minister for mutuals.
It would also create Local Enterprise Funds – tax-efficient investment vehicles that will invest in small start-up businesses.
Clegg said: “Most people, except perhaps Gordon Brown, now recognise that too much centralisation in politics has led to wasteful bureaucratic public services and a command-and-control state that leeches power away from people.
“I believe the same analysis can be made of our economy. Power has been too concentrated in a few super-banks and accessing equity investment, so you don’t have to rely on loans to grow your business, can be almost impossible. We will create a totally different financial system.”