MPs back splitting up the banks

We reported in this morning’s FT on the results of a poll carried out by Ipsos Mori of nearly 100 MPs from across all the Westminster parties on what they think of a range of economical questions.

The poll is done every year, but this is the first time a newspaper has got its hands on it. The results are revealing.

The most interesting finding is that the vast majority of MPs back separating investment and retail banks. Such a move, seen by many as an answer to preventing the high-risk activities of casino banks from posing a risk to ordinary borrowers, would go much further than the “ring-fence” being proposed by George Osborne.

Osborne is already under pressure to “electrify” that ring-fence by giving the banking regulator powers to force banks to break up if the ring-fence does not work. But the results of the poll show that most MPs – even including a majority of Tories – want the chancellor to go further still, and back a full Glass-Steagall-style split.

There is one proviso to this finding. The question asks “Should there be a separation between banks’ retail and investment activities?” The Treasury claims that the ring-fence represents such a separation, but the claim is somewhat disingenuous – the current proposals are better characterised as tighter regulation for one type of banking, but not full separation. Besides, Ipsos Mori insists the question was intended to refer to a full split.

There are several other interesting findings too. One is the overwhelming pessimism of Tory MPs about the future of the single currency. Some 64 per cent believe it will not survive the current crisis – an incredibly high number given European policy makers have been increasingly clear about their determination to ensure the euro survives.

Another is that 9 per cent of Tory MPs believe the government’s immigration controls risk harming UK business.

But by far the most extraordinary finding is that there is somewhere a Labour MP who agrees with the statement: “In the long term, this Government’s policies will improve the state of the British economy.” Unsurprisingly, all respondents were anonymous.

Here are the full results: