Peers vote through Labour amendment to introduce tough licensing regime for senior bankers by 222 votes to 217

This article is more than 6 years old

This article is more than 6 years old

The government suffered a defeat over its banking reform bill in the House of Lords on Tuesday night after peers backed a Labour move to introduce a tough licensing regime for senior bankers.

Ministers have been criticised for not going far enough with a bill designed to overhaul Britain's banks after the financial crisis and the Libor rate-fixing scandal. The Labour amendment capitalised on those concerns and was voted through by 222 votes to 217. Labour said the government plans did not go far enough.

Demands for higher professional standards were supported by Justin Welby, the Archbishop of Canterbury, who is also member of the Parliamentary Commission on Banking Standards.

Labour described the vote as a further defeat for George Osborne, the chancellor, in the week that he changed tack over payday loans and asked the Bank of England to curb risk-taking by banks.

Chris Leslie MP, Labour's shadow chief secretary to the Treasury, said: "This is turning out to be a good week for banking reform, but a disastrous week for George Osborne.

"Labour's successful amendment, which the government has resisted three times, calls for a tough licensing regime for senior bankers which would have to be renewed each year.

"As the revelations of the last week show, an annual health check like this could help to spot problems and ring alarm bells."