Banking: Financial Stability

My Lords, I am grateful to the noble Lord for his constructive response to the Statement. I hear what he says about the nature of the shares. I did not say that the shares carry no risk. The reason the taxpayer has the right to a return is that of course there is risk attached to lending. I was merely indicating that the Government are concerned to minimise the risk—hence the choice for the preference shares. I hear him when he says that the Government should strike a harder bargain in order to bring additional returns to the taxpayer. That is an important consideration, but he will appreciate that at present it is equally important, if not more so, for us to be able to restore confidence in the banking system. That is why we will be concentrating on that matter. On small businesses, the noble Lord will recognise that that is exactly why the Government, having produced proposals that will reassure depositors, recognise that there is more to deal with than just small depositors. That is why the other proposals for the banking system are included in the Statement. I hear what he says about the mass exodus of resources. It is possibly the case that if everything had been left to ““devil take the hindmost””, the effects could have been quite calamitous in terms of transfers across the exchanges. The noble Lord will appreciate, though, that the Statement represents a response that is reflected in other countries, too, particularly in the European Community. It is that general response that will guarantee that we do not have the calamitous consequences that he suggests might have followed from one state acting in a particular way—even one with relatively modest resources.