Financial Crisis

Part of the debate – in the House of Commons at 4:22 pm on 20th January 2009.

Alert me about debates like this

Photo of Michael Connarty Michael Connarty Chair, European Scrutiny Committee 4:22 pm, 20th January 2009

I am not giving way so early in my speech.

The UK acting alone would, quite frankly, not be able to deal with the blows coming from the banking credit implosion—that is what it is throughout the world. I do not use pejorative terms such as "Johnny Foreigner"; I understand the banking system and its international nature. Decisions were taken by some of our so-called great banks—those are the ones that made the greatest errors—so we have the Royal Bank of Scotland with£2 trillion of debt, based on very dubious assets. I studied economics and know what my economics professor would have thought. The Conservative Government took away the rules and we then further loosened them, and he would have been horrified at the leverage on such worthless assets as mortgage debt bundles. This needs to be dealt with on a big scale, and I believe the EU is the best mechanism for doing that.

I thoroughly endorse the Government's approach. I would have preferred it if they had not only "noted" the documents, but actually agreed with them as well. I often wonder whether people ever take the trouble to read the documents that our European Scrutiny Committee endeavours to read from cover to cover. I shall refer to some that have not been referred to in any detail today. They may not have been read yet, as they were put before our Committee only at its most recent meeting, on 12 January.

I welcome the increasing flexibility that—notwithstanding the picture painted by Opposition Front Benchers—is a feature of communications from the European Union on how the crisis should be dealt with. The early papers that were before the Committee in December on the framework document and the document on recovery from the financial crisis were a little rigid and cautious. The very good officers of the House who advised the Committee, for example, said:

"At first blush, some of this"— that is, the proposal on reinforcing competitiveness—

"seems to include acceleration or resurrection of pre-existing Commission ambitions, for example revision of the European Globalisation Adjustment Fund rules or stepping up investment in Trans-European Networks."

However, the situation has moved on quite a bit since then. I think that Opposition Front Benchers should note the frameworks and endorse them, and also note later documents showing both the Government's willingness to be flexible and—again, contrary to the picture painted by the Opposition—to resist policies of which they were not yet convinced. I shall give examples of that later.

Embed this video

Copy and paste this code on your website