Banking Bill

I refer the House to my entry in the Register of Members' Interests. As people are inclined to make mischief in that area, I should probably also mention that I am a shareholder in most of the banks that have been mentioned in the course of the debate, although I am happy to say that the modesty of my shareholdings is such that they threaten neither my financial stability nor that of the banking system. It does mean that my interests are aligned with those of the taxpayer who has made a deal to take a substantial stake in various banks. En passant, I notice that on the first day's trading the taxpayer lost £2 billion on the value of that investment. Given that I have heard, in various speeches in the past day or two, the cheery assumption that the taxpayer is bound to make a profit when withdrawing from the deal—so we should not be concerned by the staggering impact that the borrowing will have on the public finances—we should all note that shareholdings are capable of going down as well as up. It is completely uncertain as to whether we will eventually take any profit. The Bill is obviously necessary in the current circumstances, and I shall support it in the unlikely event that anyone chooses to vote against it. The current powers that the Government have will lapse in February if we do not make progress from the Banking (Special Provisions) Act 2008, and those powers are needed to enable the Government to intervene in the manner in which they have. It is not a perfect Bill, as it does not address some of the problems with the regulatory system in this country. Once we get past the worst of the present crisis, the most important need will be to contemplate how we avoid getting into a similar crisis for many years ahead. I anticipate that a new Government will have to return to the subject and readdress, in particular, the position of the so-called tripartite regulatory arrangement and the relationship between the Treasury, the Bank and the FSA. The Bill has been a long time coming. Like most of the Government's actions in the present financial crisis, it should have come sooner. The Government started consulting on this a long time ago. Such a Bill was obviously necessary at the time of Northern Rock, but only now—when the crisis is enormously worse than it was then—do the Government come forward with it, and most of the provisions still have to be left to a code of practice. I intend to ask questions about how the Bill is supposed to operate, and the Government should be in a position to answer them—although they do not seem able to do so. That is, of course, of a piece with their whole approach to the financial crisis and the background to it. The Government have been astonishingly complacent and negligent in taking no action whatever until the crisis began to hit us. Ministers, especially the Prime Minister and—as far as one can see—the Chancellor when he first took office, were more oblivious than most other people to the likely threats to the financial system, and hence the economy. We are committed to a bipartisan approach to the Bill, but I shall be very irritated if Ministers criticise us every time that we are critical of anything that they say. I agree with my hon. Friend the Member for Tatton (Mr. Osborne) that we must return in time to the extraordinary negligence that led to Britain being one of the worst placed countries in the developed world when the tsunami—as the hon. Member for Twickenham (Dr. Cable) described it—actually hit us.