Vince Cable criticises banks for "ripping off" consumers

Posted on: 19 July 2010 by Gareth Hargreaves

Business Secretary Vince Cable accuses banks of "ripping off" customers but can he force them to climb down on charges?

Very often election promises are forgotten once a party is in power. There’s a lovely story about one of the old ‘gangster’ Mayors of Chicago in the 1930s. An aide came in to his office and said that a crowd of voters were outside demanding to know what had happened to all the promises he had made prior to his election? Tell them I lied was the response from the Mayor!

Well in the case of Vince Cable this is unlikely to be the case (an honorable man in politics you ask?). This morning, Cable announced there would be sweeping reform of the banking sector to stop them ‘ripping the public off’! Now that’s extraordinary language from a Secretary of State of any government, let alone one that in essence supports the City and financial sector (well, the Tory bit of the coalition does).

The BBC followed this up with a trailer for Monday night’s Panorama highlighting the case of a bank that charged a rate of interest that equated to 3,500% for a small unauthorized overdraft. This makes the moneylenders in the temple seem like angels! Banks have always ripped their customers off! They do it when times are good and when times are bad – they appear to do it with even greater vigour.

If we look back on the past three years we have seen the near collapse of the world banking sector; with major institutions going bust or having to be bailed out by national governments. The taxpayer’s money that was used to prop up these organisations came from your salary and your future earning when the loans get paid back. The true cost is still unqualified – but more likely than not, it will be the figure that the bankers tell us it is – we'll just pick up the bill, again.

If you now take a look at these suffering corporates in 2010 they are all reporting massive profits and equally massive bonuses for their staff. What happened to give them such a turnaround? Simply put, they screwed the government and they screwed us - the windfall bestowed on them by the Brown government increased their cash flow and enabled them to rebuild their profits and balance sheets at our expense.

Vince Cable is determined to take the financial sector to task on charges and value for money. For PR purposes it looks good for the Coalition in the press and Cable may very well believe he can do some good, but I’m afraid his bluster will come to nothing!

The City and its global equivalents have had centuries of experience in handling governments and getting the result of any negotiation to go their way. Will Vince Cable succeed where others have failed so miserably in the past? I for one doubt it but it’s nice to know he is at least trying on our behalf. What will annoy me most will be the ‘pleasing platitudes’ that will slip easily from the mouths of the mendacious bankers as another Minister is hoodwinked! Sad but so very true!

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