Labour will set legal limit on the size of banks, says Miliband

In what was being billed by Labour as a major speech on the economy, the Opposition leader will this morning unveil proposals for a legal limit on the size to which any high-street bank can grow, in an move designed to boost competition in the sector.

However, Mr Miliband’s speech risked being overshadowed by a carefully-timed intervention from George Osborne, who signalled last night it was time for a significant hike in the national minimum wage. Following months of pressure from Labour over what it calls Britain’s “cost of living crisis”, Mr Osborne said he is now contemplating a rise in the £6.31-an-hour minimum wage to £7.

“I think Britain can afford a higher minimum wage,” Mr Osborne said. “We have worked hard to get to this point, and we can start to enjoy the fruits of all that hard work.”

Labour immediately accused the Chancellor of “flailing around under pressure”, stressing he had made “no concrete announcement” on a wage level.

In his speech in London today Mr Miliband will pledge the sweeping industrial policy he believes this Government has failed to deliver, insisting it will support “every region” in the country.

The Doncaster MP has already promised a return to regional banking, with a UK investment bank funding regional arms which back businesses in their area.

Today he will go further, promising wholesale reform of the banking sector to reduce the size of existing high-street banks – forcing them to sell-off branches – and bring new banks into the market.

“After decades of banking becoming more and more concentrated, Labour will turn the tide,” Mr Miliband will say.

“I want to send a message to our small and medium-sized businesses: Under a Labour Government, you will no longer be serving the banks. Instead, the banks will be serving you.”