Financial Services Bill

I certainly accept that point on the Banking Act. We all recognise that, but it is against a background where the Government were being constructive in their response to the nature of the problem. I give credit to the Opposition on the Banking Act: there was considerable assistance there. Yet no opportunity was lost to suggest a failure of government, when in fact Northern Rock presaged what we then saw of the great difficulties with American banks and subsequently with the British banking system. I emphasise that it will not do for the Opposition to suggest that what went wrong at that time was something different, separate and unique—the result of the institutional structure operating in Britain at that time. That will not hold, even with the point about Canada. I doubt the extent to which the noble Baroness can stretch that example. The institutional structure in Canada is somewhat closer to the system that the Government are proposing in this Bill than it is to the noble Baroness’s proposals and her party’s position on the situation. I am not prepared to accept that challenge either. The issue here is learning from the past and being in a position to make the right judgments, not merely changing the institutional structures. It will not do to move specific responsibilities from one body to another, as the noble Baroness suggests—thereby suggesting, in passing, her criticism of the Government because blame attached to the FSA indicates that the structure was at fault. We will not see a significant improvement in the position by just moving the furniture of the institutional structures. The Government are concerned that we learn the lessons of the past with regard to the institutional structure and how it functioned, but guarantee that we have a framework in which its judgments are more effective and accurate in the future. After all, the main institutional functions—those of a central bank, a financial regulator, and a financial and economic ministry or Treasury—are central to the maintenance of financial stability in every major economy. They may reach different positions on the nature of their institutions but they all have those three concepts to underpin their approach to financial stability. The United Kingdom position is no different from that.