Banking regulators, including ministers in the last Labour government, should be prosecuted for allowing criminal activity to occur in the banking sector under their watch, a Tory MP has said.
Speaking in the House of Commons on Monday night, Richard Fuller questioned why those in charge of banking regulation are “allowed to get off scot-free”.
“Why is there no criminal sanction for those who set the regulations?
“For others, it seems that the last Labour government, idled by and doled out knighthoods, but never thought about jail. Where on earth was the thought for the people that were suffering from scandals of that time?
“It's quite clear whose fingers are all over the crime. You don't an Inspector Luther or Miss Marple to know that there were people involved in government who were responsible for setting the framework under which criminal activity was allowed to run rife.”
The fact that no bankers have yet to be jailed in the UK as a result of the financial scandals that have hit the City of London was “not good enough” and “failing the people”, Fuller said.
“If you want to change their behaviour, you have to show that people are going to go to jail and lose their liberty.
Fuller’s speech came after London Mayor Boris Johnson playfully suggested that members of the Labour government, including Gordon Brown, could face prosecution for their role overseeing the banking sector.
Speaking last month on Question Time, he said: "You could probably frame a law for bankers, but what about the Labour government who were in power in the period leading up to the crisis?
"There they were sitting there deregulating. Gordon Brown went to the City of London in June 2007 and said we are entering a golden age of banking in the City of London. What kind of signal did that send? Now, should Gordon Brown be send to prison?" he said, being met by shouts of "yes!" from the studio audience.
Meanwhile, other Tory MPs alongside Fuller poured scorn on the viability of banking reforms backed by Chancellor George Osborne, including jail sentences for reckless bankers.
Senior Tory MP Andrew Tyrie, chair of the Parliamentary Cmmission on Baaking Standards, said the legislation needed to “electrify” the planned ringfencing of a bank’s retail and investment operations was “so weak as to be virtually useless”.
Tyrie also derided the government’s plan to break up banks if they breached the ringfence as something that would “barely give [them] pause for thought”.
Tory MP Stephen Barclay warned that the requirements for proving an individual bankers’ guilt in cases of reckless management would be so high that criminal prosecutions would be “rarely” brought.
“The rhetoric of jail time is unlikely to be matched by reality”, he concluded.