Labour leader Ed Miliband was accused of wiping £1billion from the value of Britain’s banks yesterday after pledging a “reckoning” for lenders if he is the next prime minister.
Shares in the predominantly state-owned Royal Bank of Scotland and Lloyds came under pressure as Mr Miliband unveiled his plans to break up the country’s “big five” lenders.
Labour hope the move could prove as popular as Mr Miliband’s promise in September to bring in a freeze on energy bills.
The party did acknowledge, however, that the two nationalised banks would take a short-term “hit” – but insisted reform was necessary to inject competition into a “broken” banking system and increase the flow of credit to small firms.
But Treasury Minister David Gauke said the Labour leader’s intervention was not “helpful” – amid reports that it could delay their planned return to the private sector.
Shares in RBS and Lloyds were each down around 1% on the FTSE 100 Index following Mr Miliband’s keynote speech at the University of London.
Mr Gauke said: “I notice that a lot has been wiped off the value of the shares of those banks this morning so I don’t know how helpful that is in terms of that national interest because that’s UK taxpayers who have lost out.
“We’ll see over the longer term but I think it is something like £1billion this morning.”
Earlier, Shadow Business Secretary Chuka Umunna said: “I’m not denying in the short-term that you may see a hit on the share price of these banks – it’s probably happening as we speak now.
“But the reason we are doing this is so that we can grow our small businesses.”
In his heavily-trailed address, Mr Miliband said: “We need a reckoning with our banks, not for retribution but for reform.
“In this country, over decades we have seen greater and greater concentration in our banking system.
“I am determined that the next Labour government turns that tide.”