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Politics blog: Vickers report on banking reform – live

Rolling coverage of all the day’s political developments as they happen including publication of Independent Commission on Banking report and the TUC conference

10.00am: The full text of David Cameron’s speech in Moscow is on the Number 10 website.

9.56am: Lord Hanningfield, the Tory peer given a nine-month sentence for fiddling his parliamentary expenses, has been released after serving just nine weeks, according to his local paper.

9.50am: Here’s some more reaction to the Vickers report.

From Neil Bentley, the CBI‘s deputy director general

The UK is going it alone on ring-fencing, so the government must rigorously examine how and when to implement these proposals, otherwise it risks damaging businesses and threatening growth.

The commission is right to recommend a flexible approach to ring-fencing and suggest a reasonable time frame for implementation. However some of the services that might be prohibited within the ring-fence, such as exchange rate hedging and other risk management products, could increase costs for firms to access critically important financial services.

The proposals on capital requirements are out of step with internationally agreed measures underway so will increase the cost of lending for UK businesses, putting them at a disadvantage to their overseas competitors.

Companies want greater competition in banking so it’s positive that the commission has set out measures on making switching much easier and improving price transparency.

The UK needs a stable and resilient banking system, but it is critical that the government implements these reforms in a way that supports lending to businesses and helps growth.

From the British Bankers’ Association (BBA)

Any further reform measures adopted by the UK authorities need to be carefully analysed and compared with those agreed internationally. It is vital that the full impact any further reforms will have on the economy, the recovery and banks’ ability to support their customers in the UK is understood.

From Andrew Tyrie, the chairman of the Commons Treasury committee

It is clear that Sir John Vickers and his team are going down quite a radical road with these reforms. They are proposing what they call an increase in loss-absorbing capacity, that’s the phrase they use to describe the overall effect on equity and debt, to be of the order of 17 to 20%, way, way, way up on what we’ve had before.

From David Fleming, a national officer for the Unite union dealing with workers in the financial services industry.

The glaring omissions on workforce engagement and meaningful changes to remuneration systems within banking means that this report is another missed opportunity in preventing a repeat of the financial crisis in the future. Simply creating a firewall is, at best, a weak gesture and, at worst, a pointless act which will not in any material way impact the behaviour or culture at the top of the banks where this crisis was born.

9.30am: As my colleague Jill Treanor reports in today’s Guardian, a key argument in the coalition is about how quickly to pass the legislation implementing the Vickers plan to restructure the banks. George Osborne has said that the government will pass a bill before 2015 (see 9.26am), although the bill would not have to be implemented before 2019, the deadline set by Vickers for the new arrangements to come into place. But some Liberal Democrats want the government to legislate more quickly. Lord Oakeshott, a Lib Dem peer and a close ally of Vince Cable, the business secretary, told BBC News a few minutes ago that the timing of legislation was still “very much for discussion” in government circles. Oakeshott said it would be a “nonsense” not to legislate now.

What we’ve got to do is get on with legislation now, passing the law now. We have a perfect opportunity to do that with the financial services bill which is currently having its initial stages of scrutiny under a very expert committee. It would be nonsense to do financial services reform without the banks. It would be like a disarmement treaty without nuclear weapons. You must include it.

9.26am: George Osborne, the chancellor, has responding to the Vickers report. Here are the key points he made. I’ve taken the quotes from PoliticsHome.

• Osborne backed the report. “It’s a very impressive report,” he said. “I think when people read it in detail, they will see that this commission has tackled that big question that we face in Britain which is how can we be a home to successful banks that compete around the world, that lend to British families and British businesses, while at the same time protecting us as taxpayers from the cost of them going wrong and not ending up with a multi-billion pound bill when the bank collapses.”

• He said that he would stick to the timetable set out by Vickers. That would mean giving the banks until 2019 to implement the structural changes proposed in the report.

• He said that he would legislate for this during this parliament. That means before 2015.

Let’s get the legislation through in this Parliament and we have a commitment now to legislate, to get the rules in place while this government and this parliament is sitting and then it will take some time for the full rules to come into effect.

8.57am: “Вместе мы сильнее,” David Cameron said this morning. “We are stronger together”. It wasn’t a comment on the coalition, of course. (Have you noticed that ministers seem to have given up claiming that policies are somehow better as a result of being the product of coalition government?) He is in Russia, where he gave a speech this morning saying that he wants to “rebuild” Britain’s relationship with the country. My colleague Allegra Stratton is travelling with him and she has filed a story. As she reports, a “modest rapprochement” is all he seems to have in mind.

Meanwhile, back in the UK, Sir John Vickers has published the final report from his Independent Commission on Banking and its motto seems to be “stronger apart”. It wants banks to restructure themselves so that their high street banking divisions are protected from their investment banking operations – but not until 2019, which is further away than expected. George Osborne has already said that it’s a “very impressive” report and that he will adopt Vickers’s timetable.

Here’s a full list of what’s coming up today.

10am: Brendan Barber, the TUC general secretary, opens the TUC’s annual conference with a keynote speech. As Dan Milmo reports, he will say trade unions should build a movement for an “economic alternative”. There will then be debates on the economy and employment rights.

10.30am: Sir John Vickers holds a press conference to discuss his banking report.

2.15pm: Delegates at the TUC conference debate public services and equal rights.

2.30pm: Theresa May, the home secretary, answers questions in the Commons.

3.30pm: George Osborne, the chancellor, is expected to make a statement in the Commons on the Vickers report.

3.30pm: Norman Lamb, Nick Clegg’s parliamentary private secretary, holds a briefing on the Lib Dem conference.

At some point we may also get an announcement about the next commissioner of the Metropolitan police.

As usual, I’ll be covering all the breaking political news, as well as looking at the papers and bringing you the best politics from the web. I’ll post a lunchtime summary at around 1pm, and an afternoon one at about 4pm. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds