Balls accuses Osborne of dragging his feet

The UK needs tougher financial services regulation and the Conservative chancellor should act more swiftly, shadow chancellor Ed Balls has said.

Mr Osborne has yet to state whether he backs plans to raise standards in the City proposed by a cross-party group of MPs and peers.

Reforms proposed by the 570-page report from the Commission on Banking Standards include senior bankers facing jail and the loss of millions of pounds in bonuses if they are involved in a future banking collapse.

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In his keynote speech to the Association of British Insurers biennial conference this afternoon (9 July), Mr Balls said: “I think George Osborne is dragging his feet at the moment. He could move more quickly on professional standards and accountability.

“It is very important that we take a balanced and careful approach. If regulation is too heavy handed the danger is we ignore the needs of businesses large and small.

“We have supported the committee’s recommendations on professional standards. We need to do this in a way that is sensible.

“Criminal penalties need to be last resort, which is probably why the government is taking its time. If there is a case for widening these recommendations.”