by Samuel Dale
Without the shackles of the Liberal Democrats, George Osborne has been set free in his relationship with the City of London. In Mansion House speech in June, he called for a “new settlement” with banks.
The new settlement effectively means less regulation, less supervision and less tax. Big banks and hedge funds have received a rush of goodies from the Chancellor and we have not heard a peep from the Labour front bench about any of it. Not a single moment of pressure.
Here are five key ways Osborne has appeased banks since May:
- Sacking FCA chief executive Martin Wheatley
Over the summer Osborne sacked tough-talking Financial Conduct Authority chief executive Martin Wheatley for being too harsh on banks.
He is now on the hunt for someone who will be less aggressive and more agreeable to bank chiefs. This is a major, under-appreciated shift. Banks now know they can just call up Number 11, complain about the FCA and the chief regulator will be out on his ear. The next chief exec will know if they talk too tough then they will lose their job.
- Reforming the bank levy
Osborne has shifted the burden of the bank levy from large banks with global balance sheets such as HSBC and Standard Chartered, who can easily get up and leave, and on to smaller banks and building societies, who can’t leave.
From next April, smaller banks will pay more tax, larger banks will pay less, This stifles new entrants and reduces competition and yet the Treasury is standing firm.
- Scrapping bank regulation
The parliamentary commission on banking standards was set up in the wake of the Libor rigging scandal in 2013 to fix banking culture. It was led by free market Tory MP Andrew Tyrie and Nigel Lawson was a key member. No socialist firebrands in sight.
