Gordon Brown: Not jailing guilty bankers over 2008 financial crisis gives 'green light' to further gambling with public money

Gordon Brown has said the failure to put guilty bankers in prison after the financial crash has paved the way for further gambling with public money.

The former Prime Minister said rogue executives should have been jailed, lost their bonuses and had their assets confiscated and warned that “little has changed” since the global financial crisis in 2008.

In new extracts from his memoir, My Life, Our Times, Mr Brown also revealed that he was planning to resign if his government’s multibillion-pound bank bailout had failed at the height of the crisis.

It comes after Mr Brown admitted he struggled to communicate with voters in the “touchy-feely” era of modern politics and expressed disappointment that he failed to win people over to his progressive vision after the financial crash.

He said: “Little has changed since the promise in 2009 that we bring finance to heel. The banks that were deemed ‘too big to fail’ are now even bigger than they were.

“Similarly, with inadequate oversight of shadow banking, with exotic new financial instruments such as collateralised loan obligations and without, as yet, a proper early warning system, some regulators freely confess that risks have morphed and migrated out of the formal banking system and if the next crisis came they would still not know what is owed and by whom and to whom.

“2009 has proved to be the turning point at which history failed to turn.

“Dividends and bankers’ pay today represent almost exactly the same share of banks’ revenues as before the crisis hit.”

Mr Brown, who was Chancellor for a decade, added: “If bankers who act fraudulently are not put in jail with their bonuses returned, assets confiscated and banned from future practice, we will only give a green light to similar risk-laden behaviour in new forms.”

Disgraced former Royal Bank of Scotland boss Fred Goodwin never expressed “real contrition” for his role in the bank’s collapse, Mr Brown said, adding that “it cannot be right” that Mr Goodwin “walked away with all of his past bonuses untouched”.

Under his leadership, “millions of pounds were simply wasted” by RBS, including a £200m annual sponsorship budget and payments to sports stars such as Andy Murray to act as ambassadors for the bank.

Mr Brown suggested using fraud legislation to tackle bankers who abuse their positions, make false representations or fail to disclose information.

He also described how close he came to resigning at the peak of the crisis, saying he warned his wife Sarah to “pack our things for a sudden move out of Downing Street” if the planned bailout failed.

The former Labour leader added: “If what I was about to do failed, with markets collapsing further and confidence ebbing from Britain, I would have no choice but to resign.”