"I am deeply sorry," says Shadow Chancellor

Ed Balls

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Shadow Chancellor Ed Balls has said he is deeply sorry for the Labour government’s part in the banking crisis that struck in 2008.

The apology came as the Chancellor made a statement to MPs on a commissioned report published today by the Independent Commission on Banking, chaired by Sir John Vickers.

It’s the first time that Labour’s new opposition have publicly apologised for their part in the banking crisis.

Although Balls said sorry, he still claimed the government was acting slow on banking reform – with so called “squabbles” going on in the coalition.

He also urged the government to act much earlier when it came to banking reform on competition. He wanted the Competition Commission to report back on progress by 2013, not 2015.

The know-it-all senior opposition finance minister said that on the recommendation to “ring fence” the retail part of the banking sector, it was welcomed, but that taxpayers would end up having to bare the burden, if there wasn’t any reforms on competition within the banking sector.

Balls said that George Osborne, the Chancellor should act now to the recommendations, and strive to legislate for better competition.

The Liberal Democrats, had originally wanted a complete split of the retail banking sector, but have accepted the watered down proposal to keep at arms length the retail banking sector from the investment sector, should greedy investment bankers start to gamble with the nation’s money like they did a couple of years ago or so when the banks had to be bailed out by the taxpayer. The promise at the time was that politicians would work flat out to ensure that the banks made a profit so that the money lent by the taxpayer could be paid back with interest.

Bankers are reported to not be happy with the Vickers report. They claim the reforms will prevent banks from lending money.

But Sir John Vickers claimed in the report, that the recommendations will be good for the economy.

On competition, the main recommendation was to try to reduce the power of the major banks such as Lloyds TSB, and HBOS, with one view being the government could reverse the merger of the two.

No real solid recommendation has been made on competition in the report, said the shadow Chancellor.

In a statement by the Chancellor George Osborne to MPs, he said he supported the report’s recommendations, in principle, and would legislate within this parliament to implement the recommendations.

On the Balls apology, the Chancellor joked: “I welcome his apology for the last government’s part in the banking crisis, but I think it will take at least anotherfour more years of those.”

Balls shouted back, what about Osborne apologising?

Osborne said that he wasn’t the City finance minister at the time when the crisis struck the banking sector.

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