The Economy

My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) has already reminded us exactly what he said from the Front Bench at that time. It was a huge mistake to take banking supervision away from the Bank of England and give it to a supervisory authority that employs 2,500 people and will cost us £415 million a year from 1 April, but which assigned only three of those 2,500 people to look after Northern Rock, which allowed the Royal Bank of Scotland to expand and expand without lifting a finger to stop it, and which allowed HBOS to put 40 per cent. of its lending into property and construction alone and then to take equity stakes in the very businesses that it was banking. Above all that, there was a tripartite group that hardly ever met. Those were British mistakes of regulation, made by British banks and British supervisors, under a system set up by the British Government. It is for us to put that right—to put the Bank back in charge of banking supervision, not just financial stability, as the lender of last resort and the institution that will sort out failing banks, and then to establish counter-cyclical rules for capital, tougher requirements for liquidity and a much better understanding of the risks that such institutions are taking on.