Earlier this month, a Parliamentary debate gave Labour & Co-operative MPs the chance to raise their concerns with the current banking culture and structure. Sharon Hou reviews their ideas for a better banking system based on co-operative values.

As our Parliamentary Group Chair, Cathy Jamieson MP declared during the debate, ‘the culture of banking must shift so that it is about productive behaviour and considering how we encourage people to save and how to use those savings productively for local communities and small businesses instead of predatory behaviour and trying to make the extra buck.’

Drawing on his past experiences of working in the financial sector, Labour & Co-operative Chris Evans MP appealed for greater transparency into the activities and transactions of banks. This was the theme of his Banking Disclosure, Responsibility and Education Bill, which he introduced earlier in the year. Mr Evans also called for an increased development of the mutual sector in banking as ‘conventional banks used £60 billion when they were bailed out, but the mutual sector did not use any.’ Therefore, he argued, the government should ‘do more to encourage mutuality in the banking sector, starting with an expansion of the roles of community banks and credit unions.’

Our Party Chair, Gareth Thomas MP emphasised the need for further diversity in banking and observed that the government recently missed the chance to encourage such diversity when an amendment to the Financial Services Bill that would have ‘required new regulators to have regard to promoting diversity in the financial markets’ was rejected.

Tory MP Andrea Leadsom responded that she was ‘not aware of the specific amendment,’ but that the Government did favour promoting greater diversity. However, Mrs Leadsom was on the list of those who voted against it.

There was also support for Gareth Thomas’ proposal of a requirement on banks to reveal what they lend and where they lend on a postcode basis so that better competition and resources could be introduced to unbanked areas. The Minister, however, rejected the idea on the basis that such an endeavour would ‘be a very considerable undertaking for banks and create a significant regulatory burden.’

Cathy Jamieson returned that ‘mutuality and co-operation must not be just for a time of crisis or to fill a gap when the private sector has failed or stalled. Since they offer a successful alternative business model, they should at least have a level playing field.’

The ideas raised by Co-operative MPs during this debate run very much along the aims and objectives of our The Feeling’s Mutual Campaign. The government should do more to promote the ‘safer business model of financial mutuals’ and ‘encourage safe banking.’

It is time to force banks to face actual competition and be transparent and for customers to have real choices so that the country can once again have a banking system that works in the interest of the people and communities.