I can see, if not a long Parliament, an exceptionally interesting one. The theme of the last Parliament that divided us all so greatly was the Common Market. No doubt, that will continue, but it looks very much as though this Parliament is to be dominated by Scotland. I must speak with great caution, as I am married to someone from Glasgow, and at any rate in public continue to regard it as something extremely vital to the nation's welfare.

I feel a certain sense of anti-climax because I want to talk about a much humbler theme. Not only is it humbler, but it does not even appear in the Gracious Speech. In the manifesto on which I fought the election, along with others on this side of the House, it was stated that when we came into office we would set up a Royal Commission on the working of the City institutions.

This is a matter of great importance for a large number of reasons. The Labour movement has always had a slightly schizophrenic attitude towards the City. On the one hand, it has been very critical of the City—and quite rightly—because of the enormous power that the institutions of the City exercise, the tremendous influence they have over policy making and, at times, the enormous wealth that accrues to people who produce nothing but who dabble in services handling money and get far more from it than those who produce goods.

On the other hand, the Labour movement, and even the Labour Government in office, have been afraid. It is understandable because the people who wield this enormous power have a great influence over our lives. The work they do is so mysterious, so esoteric that, apart from one Member, we do not know much about how these things work. Even Ministers in high office succumb to the suggestions of the civil servants that if we do something the heavens will fall on us. We were told this about the £ sterling. We could never have floating rates; we could never have sliding parities; we could never have a crawling peg. If we had, we were told, we should be heading straight for disaster. Probably the civil servants were right in that context. Equally, if we interfered with the City, we were told, we would begin to interfere with the enormous invisible earnings for which the City was responsible.

I believe—as, I think, do many people in this country and, in fact, in the City —that we have reached a stage where the behaviour of the people who run these institutions in the City has been such that their activities should be brought under very careful scrutiny. Hence I welcome the statement that there should be a Royal Commission. The "unacceptable face of British capitalism" was a phrase that applied more forcibly to people in the City than anywhere else in British society.

I think that the present Government, despite all their great problems, should start to look at some of the issues to which the operations of the City give rise. I know that one must be careful. When one begins to talk about the banks, especially the very respectable clearing banks, one might be handling political and financial dynamite. But there is not the slightest doubt that the way in which banks have operated in the last two years is not consistent with the way in which we should conduct our financial operations and institutions in this country. They are totally incapable of deciding whether they are rapacious commercial enterprises or whether they have a more responsible rôle in the economy.

We must look at these powerful banks —even though they handle my overdraft and I should speak with caution—and see precisely what is their rôle. We must decide whether it is right, socially just and acceptable that they should from time to time earn these massive profits, which do not arise because the banks suddenly become productive institutions performing new roles, innovating, and so on, but merely because a prodigal Government have increased the money supply and, at the same time, the interest rates have gone up.

We should go back to the Report of the Prices and Incomes Board and say that, on excess profits of this kind, a tax should be paid because these profits are just a kind of endowment element. There are many other ways. Should banks be associated more with industry? Of course, they have had a lot to do with property through the secondary bank trick. They burned their fingers, but that does not matter when £700 million profit has been made in one year. No doubt, they are getting some knowledge of industry because of the liquidity crisis in which many firms find themselves.

I know that one must not mention the word nationalisation, but I think even here it would be justifiable—and I am a Right-winger on these benches—to have a public sector alternative. We have enough Government financial institutions at the moment, but what we do not have are Government financial institutions with an international aspect. In order to give them that, we need to nationalise, perhaps, take into public possession or ownership, one of the big clearing banks and also, perhaps, one of the very profitable, much more profitable, accepting houses.

That is just one of the great institutions that should be looked into. One could go on. There are the insurance companies. Shall we ever resolve the dilemma of the massive amounts of money that accrue to insurance companies and the £10,000 million at the disposal of pension funds in the context of making their investment socially acceptable and at the same time giving a decent return to the people who pay the premiums? Shall we ever resolve the dilemma of the great insurance companies which invest thousands of millions of pounds in companies in this country and then stand back and say that it is none of their business how the companies conduct themselves? Something must be done about that.

Something must be done about the real nigger in the woodpile, the Stock Exchange. How much longer must we go on with the amateurish approach to Stock Exchange supervision through takeover panels and other gentlemen's agreements? Why can we not set up, as the Americans have done in this field, an exchange and securities commission? Why are we frightened? Why should we on this side be frightened to do the job of policing this casino in a professional manner?

We are just beginning to see what is happening in the commodity markets. They have operated in a sort of backwater, and now we suddenly realise that, on some estimates, at least 30 per cent. of the increase of the price of important grains, metals, gold and so forth, is a consequence of speculative operation by people who are getting away with murder. Something could be done about it.

What about the greatest Cinderella of them all, the poor old building societies? Someone should drag them into the 20th century. They are conducting their business today—I have paid off my mortgage —just as they have for 100 years, though they do it now with a computer and from much more lavish offices. They must be made to accept some sort of State interference or control—I do not speak of nationalisation, because I do not think that is the right word in this context—so that the problem could be resolved.

Unless we reach a stage in relation to our great financial institutions where it can be seen that they are accepting such control in a socially responsible manner, we shall have to say—Private enterprise, perhaps, but, if not, the Government must take a closer look at the problem. That is why I believe that the Government should forthwith set up a Royal Commission.

I do not, however, think that that in itself would go far enough, because one must appreciate that the Government operate financially in the market on an enormous scale. Their action has tremendous influence on all sorts of indicators about which we read so often in the Press. I should like to see this Government not only set up a Royal Commission to look into the financial institutions of the City but set up a Select Committee to study the whole question of financial administration and the Government's monetary policies.

That is the one main area which is not subject to scrutiny by a Select Committee. The Treasury, of course, is frightened of it. When the Select Committee on Nationalised Industries under the Labour Government asked whether it could look at that great nationalised industry, the Bank of England, the Chancellor of the day said that it could take a peep but it could not look at this, that or the other and that such matters were felt by his advisers to be too confidential to be exposed to the common view of Members of Parliament. In my view, that scrutiny is essential.

When we talk about finance in this House, we talk about the Budget, but when talking about the Budget what do we discuss? We talk about important practical issues of taxation. We spend hours—often nights—in Committee going through all the minutiae of what tax should be altered and why. Monetary policy has just a brief mention. The whole question of the level of demand in the economy has just a brief mention.

There are many issues relating to Government borrowing at home and abroad. What about all the borrowing that we shall have to do? How much should we borrow? Where should we borrow? Should we go cap in hand to the Eurodollar market or to the International Monetary Fund?—which is cheapest?—and so on.

Should we lower the interest rate now? I believe that we should. But where does one discuss this? The rate of interest cannot be discussed in the House any more than the foreign exchange of sterling can. These are matters only for the Chancellor and his advisers. They should be subject to Select Committee scrutiny.

There are many great issues in the monetary affairs and policies of the nation that we should examine. My hope is that at some time—these are not necessarily matters of legislation—the House will set up a Royal Commission on the working of the City institutions, and a Select Committee on the Government's financial administration.