Chris Leslie MP, Labour's Shadow Treasury Minister, speaking ahead of an expected George Osborne speech responding to the Tyrie Report on banking said:
"Last year both Labour and The Parliamentary Commission on Banking Standards called for legislation for a backstop power keeping open the option to fully separate retail banking from investment banking - but the Government refused to commit to that.
"If the Chancellor is now being dragged towards a partial climb down, this is a step in the right direction - but unless he legislates for a strong reserve power with the option for full separation of banks across the board, and not just for one or two banks, then this will be of little use.
"The Commission's report before Christmas shared our concerns that the Chancellor is watering down the ring fence.
"The Government must implement both the letter and spirit of Vickers recommendations and we must see fundamental cultural change in our banks. If this does not happen then banks will need to be split up completely, as we made clear in the autumn.
"If the reports are correct and the Chancellor is planning to stop short on both the backstop powers and legislation for the leverage ratio, then there will be a very real sense in the country that despite all the rhetoric the Chancellor hasn't got the appetite for the radical banking reform we need."