U.K. bankers involved in activities such as Libor-rigging should face the threat of prison to help restore public confidence in the finance industry, the opposition Labour Party’s business spokesman said.
It “cannot be right” that people are jailed for fiddling state-funded welfare payments while financial workers can rig banking systems to make hundreds of thousands of pounds and escape punishment, Chuka Umunna said in a speech at Canary Wharf in London’s Docklands financial district today.
“Politicians are not in a position to lecture on trust -- we are less popular than you and we learnt the hard way after the expenses scandal, when we had to get our house in order,” Umunna said. “But at least the people saw politicians brought to book -- with some of our number serving time in jail for their wrongdoing.”
Umunna said Labour is “pro-City,” though his party will be “unapologetically critical” when necessary. Labour is set a new course on policy toward banks two years before the next general election after being forced to bail out lenders during the financial crisis.
“Particularly in respect of the Libor-rigging scandal, it seems to me that we will not rebuild trust with the public or affect a culture change in finance until custodial sentences are imposed on those guilty of criminal wrongdoing in your sector,” Umunna said.
“For us, the future of financial services -- the City -- is incredibly important,” he said. “Any potential government hoping to take office and any current party of opposition charged with scrutinizing what the government does, should want to see the City thrive.”
Umunna singled out Barclays Plc for criticism, saying its timing last month over its announcement of bonuses worth 40 million pounds ($61 million) just as Chancellor of the Exchequer George Osborne announced further austerity measures in its budget sent “all the wrong messages.”