Ed Miliband’s speech on cost of living and banking reform: full text

“Under a Labour government, instead of you serving the banks, the banks will serve you.”

Today I want to tell you what the next election is about for Labour.

It is about those families who work all the hours that God sends and don’t feel they get anything back.

It is about the people who go to bed anxious about how they’re going to pay their bills.

It is about the parents who turn to each other each night and ask what life their sons and daughters are going to have in the future.

It is about those just starting out who can’t imagine they will ever afford a home of their own.

It is about the most vulnerable in our country who feel they are just being tossed aside.

And it is about all those who are doing OK but still feel Britain should be doing a lot better.

It is about who we are as a country.

And who we want to recover to be.

It is about all those who believe that we’re Britain and we should never settle for second best.

All those millions of people who believe, like I do, like you do: We’re Britain, we’re better than this.

But we can only do better if the conversation in politics catches up with our country.

For too long politicians acted as if when something wasn’t talked about in politics or wasn’t big on our television screens, somehow it wasn’t happening.

The banking crisis.

The problems in the eurozone.

Ups and downs on the stock market.

They are the daily stuff of politics.

But all the while something just as important, something even deeper, has been going on.

And we have been far too silent about it.

That is the cost-of-living crisis.

Some people in Westminster still ask me: is the cost-of-living crisis really such a big deal?

Isn’t it just a short-term problem?

This shows they just don’t understand.

The cost-of-living crisis is the single greatest challenge our country faces.

Not since the century before last have we seen such a sustained fall in living standards.

What is the cost-of-living crisis?

On my very first day as leader of the Labour Party, I talked about the squeezed middle.

I realise now that back then I didn’t grasp the full scale of the problem.

It only really came home to me later.

And since then we’ve had three more years of that squeeze.

It is why I focused on it in my Labour Party conference speech this year.

And today, I think about the fragments of the conversations I have had since then, about the problems people face.

“My wages are stuck but all the bills carry on going up.

I just can’t get the hours I need so everything is a struggle.

The weekly food shop.

Gas and electricity.

Petrol for the car.

I just can’t afford this government.

I don’t know how much I am going to earn from one week to the next.

Work sixty hours a week.

I have to do two jobs.

I don’t have time to see my kids.”

“Of course, life’s going to be hard,” people say, “but surely it doesn’t need to be this hard?”

“And what’s going to happen to my kids when they grow up?

Will they get a regular job?

What about when they want to start a family?”

“They tell me on the news the economy is fixed.

And the people at the top they certainly seem to be doing OK.

But why isn’t that happening for my family?”

It is used to be that this country worked for ordinary people.

It just doesn’t seem to any more.

You see, this cost-of-living crisis is about the pound in people’s pocket today.

But it is not just about that.

It reaches deeply into people’s lives.

Deeply into the way our country is run.

Deeply into who our country is run for.

And because the problems are deep, the solutions need to be too.

That is the task for the next Labour government.

What is going to happen?

At least, politicians are finally talking about the cost-of-living crisis.

But talking about it isn’t enough.

People need to know that we’re going to do anything about it.

This government think it is all going to be OK.

Because this year the forecasts say that average wages will finally overtake prices.

Let’s hope that happens.

But I really warn this government:

If they think a few months of better statistics will solve this crisis, they are just demonstrating again that they have absolutely no idea about the scale of the problem or the solutions required.

This cost-of-living crisis is about who gets the rewards, not just the averages: ordinary people or just those at the top?

It is about the nature of work and whether it is secure or insecure.

It is about the prospects for people’s kids and the quality of jobs.

It is about decent homes at affordable prices.

It is about a strong sense that this cost-of-living crisis has been coming for a long time.

And that there are some big things need to change if we’re going to sort it out.

This government says: “the job is not even half done.”

You might think that’s a good sign.

But when they say that, they are not talking about your living standards.

The work you do.

The prospects for your kids.

They are just talking about the deficit.

Of course, we need to reduce the deficit.

That’s why Labour won’t borrow more for day to day spending in 2015/16.

But deficit reduction alone can’t fix our economy.

Deficit reduction alone can’t make hard work pay.

Deficit reduction alone isn’t a vision for the country.

And why does their vision fall so short?

It is not an accident.

Because they think low wages, insecure work, the hope of a bit of wealth trickling down from the top, is the way Britain succeeds.

Their economic policy is not the solution to the cost-of-living crisis.

It’s part of the problem.

They believe in a race to the bottom.

Low wages, low skills.

Not the race to the top Britain needs to tackle the cost-of-living crisis.

High skills and high wages.

The symptoms of their failure to make the long-term changes that Britain needs are there for all to see.

Personal debt for ordinary families rising again, as wages are squeezed and productivity remains low.

The largest deficit in traded goods since records began back in 1955, because there’s no proper industrial policy and no plan for growth in every region.

Investment 159th in the world because reforms haven’t been made so firms can take the long-term view.

Over-reliance on insecure, low paid jobs, not enough of the secure, high paying ones that used to keep our middle class strong.

Millions of people unable to afford to buy or rent a home, because the homes just aren’t being built.

Broken markets, from gas and electricity to transport, which are not being reformed.

And a banking system that still doesn’t serve Britain’s firms.

Higher personal debt.

Uneven growth.

Low investment.

Insecure jobs.

House prices out of reach.

Bills still too high.

Banks not serving the wealth-creators.

And David Cameron and George Osborne want congratulation.

This is not a recipe for building the new economy that can tackle the cost-of-living crisis.

It is a recipe for clinging on to the old economy.

I say: Britain can do better than this.

How we earn our way to a higher standard of living

Over the coming months, Labour will be setting out the long-term changes we need.

So we earn and grow our way to a higher standard of living.

A One Nation industrial policy serving every region of Britain.

An end to the fast buck with a new culture of long-termism, from our infrastructure to our takeover rules to the stock market.

An education policy to help provide skills, training and a career to all of our young people, not just the 50% who go to university.

A plan to build 200,000 homes a year by the end of the next Parliament, so we can tackle the housing crisis.

Taking on the vested interests in every broken market to get a fairer deal to help consumers.

And building a banking system that serves the real economy.

At our party conference in September, I talked about how we will reform Britain’s broken energy market.

As you may remember, the big energy firms didn’t like it.

But it is broken.

And only Labour will put it right.

Today, I want to talk about another broken market.

Britain’s banking system.

Because there can be no bigger test of whether we are serious about building a new economy and tackling the cost-of-living crisis.

Part of the reason as a country we rely too much on low paid, insecure work is that the small and medium sized firms that could create the good, high paying jobs of the future can’t get the finance they need.

Of course, financial services is an important industry in itself.

But for an industry that calls itself a “service”, it has been a poor servant of the real economy.

And it has been an incredibly poor servant.

Not just since 2010.

Or 2008.

But for decades in this country.

We need a reckoning with our banking system not for retribution but for reform.

Labour has already laid out important plans to change our banking system.

A Green Investment Bank, with proper powers to invest.

A new British Business Investment Bank, supported by a network of regional banks in every region of the country.

And we’ve said very clearly if the big banks can’t demonstrate real culture change by the time of the next election they will see their high street and casino arms broken up.

But to really change our banking system, we have to tackle a decades long problem in British banking: too much power concentrated in too few hands.

Britain has one of the most concentrated banking systems in the world.

Just 4 banks control 85% of small business lending.

Not lending to firms.

Poor customer service.

High charges.

The old economy.

The next Labour government will act.

On day one of the next Labour government, we will ask the Competition and Markets Authority to report within six months on how to create at least two new sizeable and competitive banks to challenge the existing high street banks.

I want to be clear about the difference this will mean:

This is not about whether we should have new banks.

The question this government is still asking.

But about how.

It is not about creating new banks that control some tiny proportion of the market.

But new banks that have a substantial proportion and can compete properly with existing banks.

And we are not asking whether existing banks might have to divest themselves of significant number of branches.

We are asking how we make that happen.

And we will go further too.

In America, by law, they have a test so that no bank can get too big and dominate the market.

We will follow the same principle for Britain.

And so under the next Labour government we will establish for the first time a threshold for the market share any one bank can have of personal accounts and small business lending.

Preventing mergers and acquisitions over this threshold.

After decades of banking becoming more and more concentrated, Labour will turn the tide.

I want to send a message to our small and medium sized businesses: Under a Labour government, you will no longer be serving the banks.

The banks will be serving you.

You will have a better chance of getting the support you need to grow your business, employ more people, at decent wages, making profits and helping Britain succeed.

Only if we take on powerful vested interests, from energy to banking, and reform broken markets, can we make the long-term changes Britain needs.

And tackle the cost-of-living crisis.

Conclusion

All of us face a choice about how we want to fight the next election.

Optimistic about Britain and its future.

Or pessimistic.

Giving people a sense of hope.

Or trying to win by fear.

In the next 16 months, I want you to tell people:

About our belief that Britain can do better than this.

About how we believe we can tip the balance away from struggle and towards hope.

And tell them exactly what we will do to tackle the cost-of-living crisis.

An energy price freeze.

Strengthening the minimum wage.

Tackling the payday lenders.

Better childcare.

Abolishing the bedroom tax.

Alongside the long-term changes our country needs:

New banks on our high street.

Skills for all our young people.

A new culture for long-termism.

An industrial policy for every region.

Building homes again in Britain.

I say Britain can do better than this.

To build the new economy.

And leave the old economy behind.

To tackle the cost-of-living crisis.

That’s what the next Labour government will do.

Ed Miliband delivers his speech on banking reform at Senate House at the University of London. Photograph: Getty Images.
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Emily Thornberry heckled by Labour MPs as tensions over Trident erupt

Shadow defence secretary's performance at PLP meeting described as "risible" and "cringeworthy". 

"There's no point trying to shout me down" shadow defence secretary Emily Thornberry declared midway through tonight's Parliamentary Labour Party meeting. Even by recent standards, the 70-minute gathering was remarkably fractious (with PLP chair John Cryer at one point threatening to halt it). Addressing MPs and peers for the first time since replacing Maria Eagle, Thornberry's performance did nothing to reassure Trident supporters. 

The Islington South MP, who voted against renewal in 2007, said that the defence review would be "wide-ranging" and did not take a position on the nuclear question (though she emphasised it was right to "question" renewal). She vowed to listen to colleagues as well as taking "expert advice" and promised to soon visit the Barrow construction site. But MPs' anger was remorseless. Former shadow defence minister Kevan Jones was one of the first to emerge from Committee Room 14. "Waffly and incoherent, cringeworthy" was his verdict. Another Labour MP told me: "Risible. Appalling. She compared Trident to patrolling the skies with spitfires ... It was embarrassing." A party source said afterwards that Thornberry's "spitfire" remark was merely an observation on changing technology. 

"She was talking originally in that whole section about drones. She'd been talking to some people about drones and it was apparent that it was absolutely possible, with improving technology, that large submarines could easily be tracked, detected and attacked by drones. She said it is a question of keeping your eye on new technology ... We don't have the spitfires of the 21st century but we do have some quite old planes, Tornadoes, but they've been updated with modern technology and modern weaponry." 

Former first sea lord and security minister Alan West complained, however, that she had failed to understand how nuclear submarines worked. "Physics, basic physics!" he cried as he left. Asked how the meeting went, Neil Kinnock, who as leader reversed Labour's unilateralist position in 1989, simply let out a belly laugh. Thornberry herself stoically insisted that it went "alright". But a shadow minister told me: "Emily just evidently hadn't put in the work required to be able to credibly address the PLP - totally humiliated. Not by the noise of the hecklers but by the silence of any defenders, no one speaking up for her." 

Labour has long awaited the Europe split currently unfolding among the Tories. But its divide on Trident is far worse. The majority of its MPs are opposed to unilateral disarmament and just seven of the shadow cabinet's 31 members share Jeremy Corbyn's position. While Labour MPs will be given a free vote when the Commons votes on Trident renewal later this year (a fait accompli), the real battle is to determine the party's manifesto stance. 

Thornberry will tomorrow address the shadow cabinet and, for the first time this year, Corbyn will attend the next PLP meeting on 22 February. Both will have to contend with a divide which appears unbridgeable. 

George Eaton is political editor of the New Statesman.