Mehdi's Morning Memo: Break Up The Big Banks

EDINBURGH, SCOTLAND - NOVEMBER 07: Leader of the Labour Party Ed Miliband speaks as he visits Standard Life on November, 11, 2013 in Edinburgh, Scotland. The Labour leader was attending a Q&A session in Scotland, where he has recently come under pressure to have a inquiry into allegations of vote rigging by the Unite union in Falkirk. (Photo by Jeff J Mitchell/Getty Images)
EDINBURGH, SCOTLAND - NOVEMBER 07: Leader of the Labour Party Ed Miliband speaks as he visits Standard Life on November, 11, 2013 in Edinburgh, Scotland. The Labour leader was attending a Q&A session in Scotland, where he has recently come under pressure to have a inquiry into allegations of vote rigging by the Unite union in Falkirk. (Photo by Jeff J Mitchell/Getty Images)
Jeff J Mitchell via Getty Images

Here are the five things you need to know on Thursday 16 January 2013...


"Labour will refer the high street banks to the competition authorities immediately if it is elected in 2015, Ed Miliband is expected to say in a centrepiece speech on banking reform on Friday. The party leader wants the proposed review by the Competition and Markets Authority (CMA) to complete within a year of the election, and anticipates it could lead to a breakup of the larger high street banks, such as RBS or Lloyds... One proposal is a cap on market share on the largest banks, but the party would not indicate whether it had a specific cap in mind. Labour officials would only say that a market share cap of 25% – as had been suggested in a leak on Tuesday night – was wide of the mark."

Miliband's comments and proposals on the banks might win over public opinion - but he's struggling to win over elite opinion. The FT splash headline suggests an intervention by Bank of England boss (and former Goldman Sachs executive!) Mark Carney in this debate is a "blow to Miliband on bonuses":

"Mark Carney, Bank of England governor, said yesterday that he opposed the idea of a 'crude bonus cap' and of reducing retail banks' market share, dealing a blow to Ed Miliband's proposals to shake up the sector... Mr Carney's comments to MPs threatened to undermine Mr Miliband's latest policy initiative even before its details were formally unveiled. The governor was not questioned specifically about Labour's proposals, but Conservatives seized on his remarks to argue the Labour leader's plans were unravelling. Asked whether the EU's decision last year to push through a 'crude' bonus cap of 200 per cent of base salary was the wrong approach, Mr Carney told the Treasury select committee: 'absolutely'. He also warned that breaking up large banks did not always lead to a more competitive industry."



Bush and Obama's former defence secretary Bob Gates has been attracting headlines in the US for his attacks on Joe Biden and other senior members of the US government - but now he is garnering headlines in the UK for his attacks on the coalition's cuts to the UK defence budget - from the BBC:

"Cuts to the UK's armed forces will limit the country's ability to be a major player on the world stage, a former US defence secretary has warned. Robert Gates said the spending squeeze would mean the UK could no longer be a full military partner of the US. Under the government's plans, by 2020 the Army will lose 20,000 personnel, the Royal Navy 6,000 and the RAF 5,000... Interviewed by BBC Radio 4's Today programme, he noted that - for the first time since World War One - Britain did not have an operational aircraft carrier."

Oh dear.


"Nick Clegg was last night accused of a 'cover–up' after the Liberal Democrats allowed a senior figure in the party to return to his role despite 'credible' evidence of inappropriate behaviour towards female activists.

"Lord Rennard, who oversees the party's policy, was alleged to have repeatedly harassed women by sexually touching and propositioning them.

"Last night an investigation commissioned by the Lib Dems and headed by a barrister found that it could not prove 'beyond reasonable doubt' that the peer had "intended to act in an indecent or sexually inappropriate way".

"But it said that there was 'credible evidence' that Lord Rennard, the former party chief executive, had 'violated the personal space' of female activists.

"It recommended that he apologise to the alleged victims and 'reflect upon' the 'distress' he caused them."

Rennard, however, hasn't apologised (so far!) and says he wants to "resume" his role in the Lib Dems - he is a member of the Lib Dem grouping in the Lords and an elected member of the party's Federal Policy Committee, which writes the election manifesto - and his chum Lord Carlisle was on the Today programme this morning making the case for the controversial peer.


Watch this parody video of Baywatch, involving dogs instead of David Hasselhoff.


They should have sent it via recorded delivery. From the Times:

"A letter to David Cameron from Tory MPs that blew apart the party's unity on Europe was never received by Downing Street, it can be revealed.

"The note, masterminded by a senior Tory backbencher, called on the Prime Minister to back the idea of handing Parliament the power to veto new laws passed by the EU. However, after The Times asked for a copy of the letter under the Freedom of Information Act, No 10 said it had never received it.

"'A search of our records has not identified that we have received the letter to which you refer,' a Downing Street official said. 'We do not therefore hold information that falls within the scope of your request.'"

The best line of the piece? "Last night, [letter writer Bernard] Jenkin confirmed that 'the Government has not received this letter'. However, he explained that this did not mean it did not exist."

Speaking on the Today programme this morning, former defence secretary Liam Fox would not confirm or deny that he was one of the 95 Tory backbenchers believed to have signed the letter.

Meanwhile, the Sun reports that a new YouGov poll commissioned by the paper shows the Tories finishing third in May's Europen elections, behind Ukip and Labour.

5) PAXO 1, GOVE 0

The beard comes off - and so too do the gloves. Outside the Newsnight studio. From the Daily Mail:

"Mr Gove accused Cambridge historian professor Sir Richard Evans of being a left-wing academic who was happy to ‘feed the myth’ [of World War I] perpetuated by programmes such as Blackadder.

"Speaking at a preview of his new BBC1 series, Britain’s Great War, Mr Paxman said he had no problem with the Rowan Atkinson show being used to encourage schoolchildren to talk about the war, ‘as long as it was not taught as fact. It’s not fact. It was a brilliant comedy.’

"On Mr Gove, he added: ‘I think he wilfully misquoted Richard Evans, the Cambridge historian, and rather unfairly I think.’"

His comments will send those right-wingers who are obsessed with right-wing bias up the wall...


From the Sun/YouGov poll:

Labour 39

Conservatives 33

Ukip 12

Lib Dems 10

That would give Labour a majority of 78.


@timfarron @cblackburnsport @nick_clegg I've not swept it under the carpet. I've tried to do the total opposite. But we must do more...

@paulwaugh V good Q by @Sarah_Montague. Is Rennard case really about a view of what is acceptable behvr? Carlile: "That may be a legitimate debate"

‏@chhcalling A local school has become an academy; it's sponsored by IKEA. I'm told exam results are massively improved, but morning assembly takes ages.


Martin Kettle, writing in the Guardian, says: "On Europe, Cameron chose party over country – a potential tragedy for Britain."

Peter Oborne, writing in the Telegraph, says: "One question for the Tory rebels – whatever happened to loyalty?"

Alex Brummer, writing in the Daily Mail, says: "Don't dither, Mr Osborne. You must veto these bonuses at the Royal Bank of Shambles."

Got something you want to share? Please send any stories/tips/quotes/pix/plugs/gossip to Mehdi Hasan (mehdi.hasan@huffingtonpost.com) or Ned Simons (ned.simons@huffingtonpost.com). You can also follow us on Twitter: @mehdirhasan, @nedsimons and @huffpostukpol

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