The Secretary of State has just confirmed that the Royal Bank of Scotland's lending commitment is legally binding. Will he confirm that the astonishingly generous pension settlement of its former chief executive, Sir Fred Goodwin, is also legally binding? Will he therefore apologise for the soundbite from his Cabinet colleague who has postured on this issue but not been prepared to apologise for it?
These decisions were taken by the Royal Bank of Scotland's board. I find it distasteful that one individual can be rewarded in such a remarkable way for failure and for the undoubted banking vandalism that has put at risk the well-being of so many families and business in Scotland and across the UK. It is important, as we try to re-stabilise the banking sector, that there should be no reward for failure. We find it extraordinarily distasteful that the Royal Bank of Scotland board made that decision.
Given the Government's assistance to the banks and my right hon. Friend's discussions with them, particularly those with a Scottish input, is he able to assure us that banks are indeed looking to develop a strategy to provide lending facilities for small businesses and home owners as the Government intended?
My right hon. Friend has raised this matter on a number of occasions and he will rightly continue to do so. I happily give him the commitment that we are doing everything we can in that respect. We are also trying to ensure that, where there are specific difficulties in certain business sectors or certain parts of the country, we take additional action. My right hon. Friend, as a Lanarkshire MP, will share my concern that Lanarkshire might be the epicentre of the recession in Scotland. That is why I shall shortly bring together business organisations, politicians, trade unions and others to see if we can find a way through the situation, particularly in Lanarkshire, where a proud and determined people who have come through previous recessions will need additional support now to get through the present recession.
Will the Secretary of State support the establishment of a post bank, publicly owned, operating in local communities and taking decisions about granting credit to small businesses based on local knowledge rather than a nationwide formula? I believe that that would give many viable small businesses throughout Scotland access to the credit that the larger banks are denying them.
The Government are always looking for additional ways to support small businesses in communities, and we particularly like to support the community and voluntary sectors and social enterprises. I would be happy to discuss that with the hon. Gentleman. It is important, however, to focus on some of the community facilities and support that are already in place, particularly for families rather than for businesses. I believe that we should all celebrate the remarkable success and important role of credit unions throughout Scotland. They will play an important part in the recession.
Thousands of my constituents work in the banks and financial services sector, and the vast majority certainly do not receive big bonuses and multi-million-pound pensions. Some are losing their jobs and many more are worried about their future. Does my right hon. Friend agree that Government at all levels—UK, Scottish and local—should work together to find a long-term strategy to get out of a common situation? What is he doing to get such a strategy agreed among all the players in the field?
My hon. Friend raises an important point, which I know is particularly relevant in his constituency, as it includes a large number of financial services sector workers. What has happened has, unfortunately, led to the portrayal of all those in the banking sector as greedy and in receipt of enormous bonuses. As he knows and as we all know, a large number of people working in banks in the back office or as bank tellers, for example, are on very average wages and they work very hard. Some of them may have had share options, which are now more difficult. It is important that we stop demonising all bank workers simply because of the irresponsible behaviour of a tiny minority of those who previously had leading and well paid positions in these organisations.
Does the Secretary of State agree that today's publication of Adair Turner's proposals for a new regulatory system for the banking sector is an illustration of the extent to which the previous regulatory system put in place by the Prime Minister failed? What does he say today to the thousands of Scots who face losing their jobs in the financial sector as a consequence of the Prime Minister's previous failure?
The fact is that the international regulatory regime did not keep pace with a remarkable change in the global movement of finance—a fact now well acknowledged across the world. That is why we need, as part of the G20 process, a new architecture for regulation. Banking will never be and should never be the same again. As for the hon. Gentleman's point on unemployment, we will do everything we possibly can to ameliorate the consequences of this international recession. Many Scottish families have people who have lost their jobs over the past few weeks, as has been confirmed today. As I say, we will do everything we possibly can to stop the newly unemployed becoming the long-term unemployed by giving people additional skills and retraining in order to retain their confidence and an attachment to the labour market. Of course things are more difficult. Not everyone can walk straight into a job, but we should not ignore anyone, and we should try to support people to keep their skills and confidence fresh.