More joined-up thinking needed

With the domestic news increasingly dominated by the "cost of living" debate, it`s disappointing to see that both current solutions, albeit, in the right direction, appear to have involved so little joined-up thinking. 

      Even if the size of the mainstream banks was successfully capped, would the  new so-called "challenger" banks offer higher rates of interest for savers, or cheaper loans to SMEs; privately owned banks have one aim, and one aim only, to maximise profits for shareholders, and it doesn`t matter whether they are achieved by avoiding tax or mis-selling to the public! Does anyone really believe Richard Branson has set up Virgin Money so that customers can get a fairer deal, or that Tesco`s bank doesn`t aim to make as much money as possible? Will new banks change the culture of banking so that "ethics come before profits", as the CEO of Barclays laughingly said, back in February,2012, before his bank started interfering with monetary exchange rates?  

        A far better response from Labour would be to pledge to increase the bank levy, to impose a massive bonus tax, and to propose RBS be transformed into a proper nationalised bank, in which people can actually trust. This would have the additional electoral benefit for Labour of dissociating itself from the City, and would make the necessary statement that Labour is fundamentally different from the Tories. It would also not only provide a real "competitor" bank the high street needs,but also the branches where regional banks, so admired by Labour leaders, could do business. By attracting customers away from the established banks, it would force them to mend their ways, change their culture of greed, and to start employing people to run their businesses and investments with decent values and principles, rather than with appetites for obscene wealth.

Opposition to the sale of any fraction of RBS should begin immediately; failure to do so will inevitably lead to a similar fiasco as the one witnessed recently over the under-selling of Royal Mail and a £2bn loss to the taxpayer. 

     Even the other proposal, the idea of raising the minimum wage to £7 an hour, is insufficient on its own; rent and price rises will inevitably follow, more employees will see their work become part-time, or be placed on zero-hours contracts, and companies` determination to maintain profit margins will ensure they seek more ways of avoiding tax. The Tories probably realise this, hence their suggestion, but whether Labour have is more debateable. Miliband is wise to focus on cashing in on the public`s outrage, but he needs to remind voters, too, that taxes will have to rise, but also that tax is the price most people willingly pay for a civilised society; if the rich have to pay their fair share, so be it!