I want to make some progress, as there is not much time.
For the longer term, we must recalibrate the contribution of financial services to society. Of course, we must nurture a revival and restoration of the City of London’s primacy as the most trusted and professional place for financial transactions, but we cannot ignore the fact that most other jurisdictions are revisiting how banking and finance pays into society and what sort of responsibility we seek.
We have heard already from my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger)about the IMF report after the G20 in 2009, which sought to think through new ways for the financial services sector to make a fair and substantial contribution to meeting the costs associated with Government interventions to repair it. In this country the interventions, in one form or another, cost near £1 trillion.
When in government, we started with the bank bonus tax, a payroll tax implemented by my right hon. Friend the Member for Edinburgh South West (Mr Darling), the former Chancellor. We thought that was a good idea then and we still think it is a good idea today. The Government then came along with the bank levy; we think that it is a good idea, but it has been poorly enforced. Ministers promised £2.5 billion in every year, but two years ago it raised just £1.8 billion and last year just £1.6 billion. Ministers keep coming back to the House and saying, “Don’t worry, we’ll deal with this shortfall.” The Minister has said that on numerous occasions, but we will believe it when we see it.
A bank levy and a bank bonus tax can only be part of the bigger picture. We must recognise that there is an ongoing systemic risk from financial services innovation and trading beyond the mainstream banks.