Banking Bill

Part of Orders of the Day – in the House of Commons at 5:09 pm on 14th October 2008.

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Photo of George Osborne George Osborne Shadow Chancellor of the Exchequer 5:09 pm, 14th October 2008

Yesterday, of course, we discussed the massive bail-out needed to deal with the near-collapse of the banking system. Today, we will debate how to prevent such a near-collapse from happening again, and how to make sure that such a bail-out is never again required. Let us be clear: when a house is on fire, it is right that all hands go to the pump, which is why we offered our constructive support. However, when the smoke has cleared and we see the debris around us, we are entitled to ask who built the house, who let it catch fire, and how we rebuild it so that it never catches fire again.

The Bill goes some way towards making the changes to our banking laws that are needed to give the Government the power that they need to deal with a bank failure. That is why we support it, and why I made an offer of support to help get the legislation through by the time that the Northern Rock powers expire. However, we believe that the Bill could go further, and I shall go on to explain why.

Giving the Government the power to deal with a banking crisis is one thing, but preventing such a crisis is quite another. The legislation is mainly about dealing with a bank once it has failed. I would have liked to see more far-reaching changes to the management of overall debt levels in the economy, and a strengthening of the Bank of England's role in that process. However, as I say, the measures in the Bill are welcome, as far as they go. Indeed, we on the Conservative Benches proposed quite a few of them.

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