EXCL Tory MP and Treasury aide suggests bankers should have been jailed after crash

Posted On: 
22nd February 2018

A Tory rising star and aide to Chancellor Philip Hammond has suggested some bankers should have gone to jail in the wake of the financial crash.

Kwasi Kwarteng is a financial services expert
Credit: 
PA Images

Kwasi Kwarteng said it was "striking" that none of them had been imprisoned and it was understandable that the public were angry about it.

He said the Government should "not bail out every financial institution at the drop of a hat" but rather "look at the criminal law" when investors behave badly.

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Gordon Brown's Labour government spent tens of billions of pounds propping up the banking sector a decade ago.

An estimated 1.3 million Brits were made redundant between 2007 and 2010 as a result of the biggest global downturn since the Second World War.

Although five financiers were convicted of wrongdoing in the UK, none have been sent to prison while a further 15 cases are yet to be decided.

Mr Kwarteng - who serves as a Parliamentary Private Secretary to Mr Hammond in the Treasury - said the public was angry about the idea bankers had not "paid for their recklessness".

"I’m speaking off piste, I’m not speaking as a Conservative MP - it’s striking that nobody has actually gone to jail throughout this whole process," he told an Intelligence Squared event in Westminster last night.

"People were hugely bailed out, their recklessness was kind of rewarded and I think the public generally feel there is a real issue about fairness and people actually being responsible and being held to account for amassing wealth in sometimes nefarious ways."

The former financial services analyst said the debate around “crony capitalism” was a “ very live issue” and added: “We need to not bail out every financial institution at the drop of a hat.”

Since being elected MP for Spelthorne in 2010, Mr Kwarteng has sat on the Finance Committee and the Public Accounts Committee.

A Labour spokesman said: "Kwasi Kwateng is right to say that since 2010 this Conservative government have not done enough to ensure that those responsible for the banking crisis were held to account.

"But he should have a word with his boss, the Chancellor, who instead is giving bankers a tax giveaway with his cut in the Bank Levy this week, while at the same time pushing through in-work benefit cuts for millions of hard working families"

'PERNICIOUS' FINANCIAL SECTOR

Earlier this week, Labour leader Jeremy Corbyn blasted the UK financial sector and vowed to rein it in if he wins power.

He said under a Labour government financial services would become “the servant of industry, not the masters of all” as part of a “fundamental rethink”.

And he added: "There can be no rebalancing of our distorted, sluggish and unequal economy without taking on the power of finance.

"For 40 years, deregulated finance has progressively become more powerful.

"Its dominance over industry, obvious and destructive; its control of politics, pernicious and undemocratic."