The Economy

I am not going to give way at the moment. Just 18 months ago, the Tory economic competitiveness policy group produced a 200 page report, "Freeing Britain to compete". Its attitude to financial services regulation is interesting, and it is well summed-up in section 6.1, "Do We Need All This Regulation?":""Government claims that this regulation is all necessary. They seem to believe that without it banks could steal our money"." Well indeed, Mr Speaker. At the Tory party conference, the shadow Chancellor hailed the prescription in this report, to "cut government regulation" in order to "liberate our economy"—and, let us remember, this was after the collapse of Northern Rock. They were still saying that we should scrap regulation. The same report included the now notorious call for the abolition of mortgage regulation. I say to my hon. Friends that that report is still on the Tory party website and it repays study. If we had gone down that road—as the Opposition have consistently urged over the past 12 years—things would be a great deal worse than they are today. The mortgage code of business rules that we introduced with mortgage regulation prevented the deep discounting of mortgage charges that have been so damaging in the US. If regulation had been abolished, there would have been no such rules. With that cornerstone of the Tories' ideology turned to dust by the events of the past two years, and with nothing to put in its place, they have nothing substantial to offer in this debate. Financial services regulation does not need to be cut, it needs to be strengthened. Nobody will dissent from that at the G20 on Thursday. The US Treasury Secretary said, in an interview in the Financial Times today, that the United States is ambitious for regulatory change. Tory party ideology has been found wanting. There has been no sign at all in this debate of anything to put in its place. The hon. Member for Twickenham (Dr. Cable) asked where we stand on the asset protection scheme and the code of conduct for banks. My right hon. Friend the Chancellor has called for a voluntary code of practice for the whole banking sector in relation to tax avoidance, to ensure that it abides by the spirit as well as the letter of the law. We are talking to the sector about that ahead of the Budget and will announce further details then. The hon. Gentleman asked why tax avoidance should be dealt with by the G20. I suggest he examine the remarkable series of announcements made leading up to the G20, culminating in the announcement by the Swiss Government that they would abandon decades of commitment to very strong banking secrecy. That announcement was made the day before the G20 Finance Ministers met, which shows clearly why it is right to deal with that issue at the G20 and welcome the progress there has been. A number of Members mentioned the G20, including my right hon. Friends the Members for Airdrie and Shotts (John Reid) and for Holborn and St. Pancras (Frank Dobson) and my hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt). I can tell the House that there has been very strong support in the other 19 countries for UK leadership at the G20 and very strong personal support for the Prime Minister's leadership. Our goal is for leaders to agree immediate action to stimulate the world economy, substantial additional resources for the IMF, support for trade finance, action to protect the poorest around the world, measures to encourage credit to flow to people and businesses, firmer financial sector regulation to rebuild confidence now and prevent crises in future, and commitment to a green recovery.