British coalition gov't, London mayor clash over banking reforms
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London's mayor looks set for collision course with the country's newly-elected coalition government, following disagreements on major policy items, according to London government website on Wednesday.
Mayor Boris Johnson, who is a former schoolfriend of the new Prime Minister David Cameron and also a leading member of Cameron's Conservative party, put himself on collision course with Cameron's new coalition government on Monday when he spoke out strongly against its policy on banks and banking.
London is Europe's financial capital, and is one of the world's leading financial cities. The finance sector accounts for 9 percent of Britain's gross domestic product.
The coalition government said it will hold an inquiry into the future of banking in the country, to report next year.
The inquiry will look at plans to break up banks, in order to separate retail and investment operations. It will also look at ending proprietary trading where banks use clients' funds to make investments.
The new Business Secretary, Dr Vince Cable who is a Liberal Democrat member of the government and is charged with handling the policy, was strongly critical of the banking sector and called for drastic reforms during the general election campaign.
Johnson, speaking at a conference sponsored by Google, said "I think it is completely nuts for people to want, as a matter of public policy, to attack the financial sector.
"We need a great City (the nickname for the finance sector) where business can raise capital in order to expand and I will continue to protect that."
Johnson, who was until Cameron became prime minister just over a week ago the most senior elected Conservative in the country, also looked set for collision with the government over the Crossrail project, an east-west railway line through London, when he said he was unable to report if the project could be finished on time.
Crossrail is a massive engineering project, costing 16 billion pounds (about 25 billion U.S. dollars), a significant part of which comes from central government.
Crossrail will build a new train line, largely underground, from London's Heathrow airport in the west of the city, through the center of the city and out to the south east of London.
Its target completion date is 2017. Johnson told a press conference on Tuesday that he could confirm it would be completed but not when it would be completed. He said he had been in talks with the new government over funding, and added the warning, "Crossrail will go ahead ... but there's no doubt about it, they will come in and kick the tires, they will say 'can we de-scope it, can we change this, can we change that?'"
"We've got to make the case for getting on with that project. I don't want you to go away with the impression that it's all signed, sealed and delivered. That is simply not the case."
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