Britain's Labour leader vows to break up banks

Britain's opposition Labour leader Ed Miliband vowed on Sunday to break up the country's biggest banks if his party comes to power at the next general election. Miliband, whose party enjoys a 10-point lead in the latest polls, told the Observer newspaper that Labour would force banks to split their "casino" investment arms from their retail operations if they did not do so voluntarily. "Either they can do it themselves, which frankly is not what has happened over the past year, or the next Labour government will, by law, break up retail and investment banks," he told the paper. Speaking ahead of the party's annual conference, which opens in Manchester, northwest England on Sunday, Miliband urged banks to focus less on "playing the international money markets" and more on lending to small businesses. Under plans by Britain's Conservative-led coalition government, banks have until 2019 to ring-fence consumer and small business accounts from their high-risk investment arms. But Labour accuses the coalition of watering down reforms proposed a year ago by a report commissioned by the government in the wake of massive state bailouts of major British banks during the financial crisis. Bank of England chief Mervyn King has also warned that banks are lobbying for a weakening of the proposals. In a later interview with BBC television, Miliband said his party would raise £2 billion ($3.2 billion, 2.5 billion euros) by taxing bankers' bonuses, and would bring back a top tax rate of 50 percent for Britain's highest earners. "If there was an election tomorrow that is what we would do," Miliband told the BBC. The government lowered the top tax rate to 45 percent for incomes over £150,000 ($242,000, 188,000 euros) in the last budget in March. But Miliband admitted that as Britain struggles to reduce its massive deficit, some of the current government's austerity cuts would continue if Labour returns to power after the next election in 2015. "There will be tough decisions that we'll have to make as a government," he said. "Yes, there would be cuts if we were in government. But if you make the pace of those cuts slower, if you take less money out of the economy now, it would be better for the economy, better for growth." Miliband, Labour's leader since 2010, is under pressure to boost his stubbornly poor personal ratings during his party's five-day conference. After 13 years in government under prime ministers Tony Blair and Gordon Brown, Labour was defeated at the last election in 2010 and David Cameron's Conservatives came to power in a coalition with the centrist Liberal Democrats.